Is Northern Brewer Selling 1 gal Kits at a Loss

[scientifics]

I was looking at the recipe for a Northern Brewer 1 gal kit, and pricing it out, it looks like it would cost me more than $14.99 to gather all the ingredients. Do you agree?

http://www.northernbrewer.com/documentation/beerkits/BavarianHefe_ONEGALLON.pdf

 

[Gameface]

$4.50 for 1lb DME
$4.50 yeast (only using half a pack though)
$2 for 1oz of perle hops (only using 3.5g)
$0.66 for 10 fizz drops

I think they're making money.

 

[clone63]

Of course it would cost less to buy the kit. Why buy the kit if it's the same/cheaper to buy everything individually.

Although quite a small one, a recipe kit is still a 'bulk sale' in that they're selling several things where they may not necessarily if it was not available, especially when recipe formulation is a more advanced element of homebrewing. These are also food stuffs with a shelf life so a faster turn over is always better, sometimes at the expense of profit margins.

Aand just because a kit is cheaper than the individual components doesn't mean they're losing money.. That would assume they're not making ANY money on the items independently. They're making less when selling the kit vs. independent ingredients, but they may not have sold anything at all if the discount was enough to sway a sale. It also allows for continued sales if buyers enjoy the recipe.

 

[1977Brewer]

Of course it would cost less to buy the kit. Why buy the kit if it's the same/cheaper to buy everything individually.

Although quite a small one, a recipe kit is still a 'bulk sale' in that they're selling several things where they may not necessarily if it was not available, especially when recipe formulation is a more advanced element of homebrewing. These are also food stuffs with a shelf life so a faster turn over is always better, sometimes at the expense of profit margins.

Aand just because a kit is cheaper than the individual components doesn't mean they're losing money.. That would assume they're not making ANY money on the items independently. They're making less when selling the kit vs. independent ingredients, but they may not have sold anything at all if the discount was enough to sway a sale. It also allows for continued sales if buyers enjoy the recipe.

Kits are more expensive, across the board, every time though.

 

[scientifics]

$4.50 for 1lb DME
$4.50 yeast (only using half a pack though)
$2 for 1oz of perle hops (only using 3.5g)
$0.66 for 10 fizz drops

I think they're making money.

:smack: I read 3.5 g as 3.5 oz...that makes a big difference!!

 

[cyberbrew]

First off, they buy in bulk, probably wholesale prices. So, they can sell at a lower price and make plenty of money off their kits. I personally don't find their prices all that great (terrible in some cases) and tend to prefer to either jump in on a group buy in my area or hit up my LHBS and help out the little guy!!

 

[clone63]

Kits are more expensive, across the board, every time though.

Hm, never priced it out since I refuse to pay shipping, I was only justifying it from a retail perspective to suit the OP's observations.
I guess they think they've got some hot recipes

 

[kegtoe]

I'm sure they aren't paying those prices anyway. They aren't losing money.

 

[Calder]

I could make 5 gallons for about $15. They are not making a loss.

 

[sandyeggoxj]

I've seen the wholesale price sheets. Most lhbs are marking all ingredients up at least 50%. The same could be assumed of northern brewer.

 

[nymtber]

1-gal bavarian hefeweizen kit: $14.99

5-gal bavarian hefeweizen kit: $31.99 (with priming sugar and same yeast as above).

They are making money.