Running a wine shop....

[DovertheRoad]

Anyone on here have experience of running a wine shop? Just interested in how they mark stuff up from wholesale. A quick visit to a few round here suggests that some bottles are priced fairly but scarcer yet still cheap bottles can have massive mark ups. One local store has several bottles at 100%+ mark ups on what you can buy it at online. Is that how it's done? And if so is it fair?

Discuss.

[Loz]

As with anything, different shops will have different margins on different products - after all, you need to take business costs such as rent into account. But there are a few basic rules that most follow.

First, it depends a little where you source your wines. From most distributors you buy them 'duty paid' but, if not, you have to add ?2.16 per 750ml bottle.

After that, most usually work on about a 30-40% margin. But then you have to add VAT as well. So, if you work at, say, a 35% margin, then a bottle of wine you buy from the wholesaler at ?3.50 (duty paid, so ?1.34 before duty) will be ?5.38 after margin and ?6.46 after VAT. So, of your ?6.46 bottle of wine, ?3.24 is tax!

Also, when looking online, beware the words "in bond" as that will mean either no VAT has been applied and possibly no duty as well. But those will need to be paid before you get you hands on them. So, a wine that would be ?6.46 on the shop shelf could be advertised as "?3.00 in bond, duty not paid". It's not a scam - it's the way the wholesale and investment side of industry runs.

For older bottles, then market price is more of an indicator.