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    After working in several bottleshops in Melbourne for over 5 years I think I can help with a few of your questions.
    Markup on alcohol really depends on product:
    -carton of beer markup was usually around 5-7% where I worked, so for a $40slab the place was only making a few dollars. This was usually combated by selling singles and offering them in a drive-thru on ice (in summer) for convenience. Obviously when most singles are selling at $2.50 this would make (24cans x $2.50 per can = $60 per slab).
    -pre-mix markup would probably be towards the 15-20% mark and single pre-mix units markup was incredible. This changed with the alcopop tax and the chain I was working for still adds this tax on (despite apparantly not being passed through the senate).
    -wine has a fairly high markup, it varies from product to product but for “in-house” branded wines the markup could be 200-300%. An example of this was a box of cleanskins that the place was selling for $16 was normally purchased for under $5. Obviously the more wider variety and well known brands have a much smaller markup (ie some could be as low as 5-10%)
    -spirits had a very low markup BUT the key was to always sell bottles of coke with the spirits which had a huge markup (somewhere near 200%). So whilst a few dollars is made on the spirit, the main area is on the “extra” items bought.

    When beers slabs were on special there was a rebate given to the hotel from what I believed to be the supplier which was dependant on the amount of product sold during the promotional period. Basically, specials get customers in the door and it was the staff’s focus to upsell and/or further sell. This is where smokes, beef jerkey, nuts, chips etc all come in very handy.

    I could go on all day but I hope this helps you out somewhat.

    • Total posts: 392

    Now Mat thats the sort of excellent useful advice that will help – nice one.

    I was reading the inner-Melb rent price conversation and had some thoughts. Now if it is so expensive to buy alcohol in inner melb, and the rent is high, is there a way of getting around the rent/space issue but still having a frontdoor in inner Melb? Is there some sort of tiny shopfront that you can sell from, but have your stock stored elsewhere, or mobile or something?


    • Total posts: 11

    Hi LKC.

    First up – congratulations on your decision!

    I would take all the information you have garnered here and DEFINITELY put it towards building a business plan. It’ll be hard to get finance without a track record if you don’t have a well thought out plan: make sure you have financials supporting the plan, as this is what a banker (or read: credit department) will look at closely. I have reviewed numerous plans where the financials don’t stack up and it undermines the credibility of the plan.

    You can get professional advice on how to write a plan (and what should be incorporated into it) or get someone to put your thoughts into one and write it for you. A good business consultant can do this for you (and whilst this can be an incredibly valuable exercise – for helping avoid future financial heartache – make sure you don’t over spend on this phase, either).

    A plan is important for not only assisting you in securing finance, but also for holding yourself accountable to achieving your own targets and being successful.

    If you attend a good business course, this will assist you in understanding what is required and you may well have to write a plan as an assignment – you could use your current aspirations as a practical application of the theory you will learn.

    Hope this doesn’t all sound too negative! I just think you should appreciate how difficult it can, in fact, be to secure finance if you haven’t established your capital requirements in a credible fashion in the first instance. Unless, of course, tyou can secvure vendor finance – but that’s another discussion altogether and can be difficult to get a transaction put together (and sometimes not the most favourable to you, the purchaser).

    Hope this helps a bit! Good luck!!!

    Sean Dunne
    Dominium Capital

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