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Old 12-19-2009, 05:15 PM   #1
zanemoseley
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Default Online hop prices..

Ok I've ordered from several online vendors for recipe kits or just ingredients and it seems lately the more I learn about ingredients the more I feel some of the vendors are overpricing the hops. I mean we all can buy hops and malt in bulk, grain for like $.70 a lb and hops for like $.65-$.80 per ounce. So shouldn't a lb of grain cost about as much as a oz of hops? Not the case, grains seems to run $1-$1.20 a lb and hops average at $2.99 a oz, sure there are specials but this seems to be the average for the most part. I think I'm going to get a hopsdirect order for some Cascade and Saaz at least.

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Old 12-19-2009, 05:28 PM   #2
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A question to ask is how much grain and how much hops does your LHBS buy? Where will his greater discount be? Next, packaging in small quantities like an ounce vs. a pound just costs more in materials, labor, and merchandising. When you factor in all the variables, the markup is likely fairly close. It's something of the nature of retail.

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Old 12-19-2009, 05:32 PM   #3
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You are surprised that retailers are charging higher than wholesale prices?

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Old 12-19-2009, 09:41 PM   #4
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I realize that they're going to be higher than wholesale but take this into account.

A retailer should be able to get base malt for $35 or so for 50lb if they get a decent sized shipment. Say they sell it for $1.10 a lb for a 57% markup.

I also averaged the hopsdirect.com prices for pellet hops which is about $14.00 including 25% shipping. So that's a $.87 per oz average. Which means that your typical store or online site that sells them for $2.99 an oz is marking them up 243%. Like I said its seems a bit excessive.

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Old 12-19-2009, 09:50 PM   #5
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Quote:
Originally Posted by zanemoseley View Post
I realize that they're going to be higher than wholesale but take this into account.

A retailer should be able to get base malt for $35 or so for 50lb if they get a decent sized shipment. Say they sell it for $1.10 a lb for a 57% markup.

I also averaged the hopsdirect.com prices for pellet hops which is about $14.00 including 25% shipping. So that's a $.87 per oz average. Which means that your typical store or online site that sells them for $2.99 an oz is marking them up 243%. Like I said its seems a bit excessive.
I actually agree.... its a bit excessive in some cases, and I actually believe that those sites (not nessecarily stores) that markup hops to 3$ an ounce are just simply not serious enough about their business for my money. This signals to me that they are lazy, and are waiting for the next 'sucker' who thinks they need to buy their hops from them. These hops are probably not even very fresh. My 2cents only, of course.

I will give my money to more serious businesses, like hopsdirect among others.
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Old 12-19-2009, 10:02 PM   #6
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Are you factoring in the cost of mylar bags and the work associated with divvying up/sealing all the individual portions from that bulk pack? Thats gotta eat up a decent amount of margin on its on, I bought regular vacuum bags a week or two ago and almost crapped when I saw the price.

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Old 12-19-2009, 10:11 PM   #7
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Quote:
Originally Posted by zanemoseley View Post
I realize that they're going to be higher than wholesale but take this into account.

A retailer should be able to get base malt for $35 or so for 50lb if they get a decent sized shipment. Say they sell it for $1.10 a lb for a 57% markup.

I also averaged the hopsdirect.com prices for pellet hops which is about $14.00 including 25% shipping. So that's a $.87 per oz average. Which means that your typical store or online site that sells them for $2.99 an oz is marking them up 243%. Like I said its seems a bit excessive.
You do not know the situation. You are incorrect. You can buy hops for significantly less than the stores paid for the hops they have now.

Most stores are way overstocked on hops that were purchased when the hops were a lot more expensive. No one is gouging, trust me.

Buy your hops where you get the best price. Refrain from speculation on what any store paid for anything.

Most stores also signed contracts for hops for years to come at those higher prices. You just don't know the situation.

I currently have 5,500 pounds of hops I paid too much for.

The prices you want to see at homebrew stores right now would be below their cost.

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Old 12-19-2009, 10:12 PM   #8
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Its true that there is labor and material involved in repackaging hops into 1oz bags. I guarantee that if you get a wholesale supplier for you packaging products you can get the bags at a better price.

You could also argue that most recipes use an average of like 10lb of grain where most recipes average only about 2oz of hops so they are trying to make more off the hops to compensate for the lower quantity. The flip side to this is that I think a certain percent markup or margin should be used across the board not a strategy saying I want to make 33% off the grain 33% off the hops and 33% off the yeast.

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Old 12-19-2009, 10:15 PM   #9
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Thanks for the insight Forrest, my error in gauging off of current prices instead of those bought during the shortage. I can see where moving 5500lb of hops takes some time. A lot of the lower hop "sale" prices are on Cascades and other quick moving hops that you guys have probably flushed old inventory.

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Old 12-19-2009, 10:16 PM   #10
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No one in the homebrew industy is getting rich. Not even the big dogs. The big dogs are big dogs because they make far less margin and that is why you shop there.

Forrest

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