Is your LHBS taking advantage of the Shortage?

[Austinhomebrew]

i'm not hijacking anything...and cool your jets, buddy

i'll start another thread when i do a little test

I'm sorry. I wasn't clear. I didn't mean that you were hijacking the thread.
I was addressing the audience to not hijack the thread so we could continue the discussion we were having.

I can see that I wasn't clear, sorry.

Forrest

 

[EvilTOJ]

And Forrest carpet bombs the thread! Evan! I found a new avatar for you;

Silly hu-mon!

 

[Austinhomebrew]

And Forrest carpet bombs the thread!

Just bored and can't sleep. Just found the thread and caught up with all of the posts.

You now that if you make your own wine using kits you won't have red wine headaches.

Forrest

 

[HarvInSTL]

To be fair, $27 is what it cost to ship 55# of grain just about anywhere.
We just shipped an order to a customer in Vermont that was 130#, mostly grain.

Do you want to guess how much we paid for the shipping charges?
Lets don't include the cost for the boxes, tape and shipping peanuts.

$109!! So, $27 for 55# is pretty cheap. Of course, we only charged the customer $6.99 because that is our deal. So when comparing prices, compare the delivered price to your door, not just the price on the product.

Forrest

To be fair are you saying that as a whole AHS is losing money every quarter?

With all due respect, we all love your shipping prices but I think we all know that you make up for that (when you can) in your every day prices for other items. It is truly great that you offer a flat rate shipping, but the song and dance about how you are always losing money on shipping is getting old. (I did preface this with all due respect)

It seems to me that this is pretty simple, if AHS was losing money on a regular basis with their flat rate shipping they would do do one of two things.

Stop offering the flat rate shipping or go out of business. Do I need to state which I think you would pick?

Now as far as your shipping 130# of grain for $109 I don't understand that one. If it costs $27 to ship a 55# sack, why wouldn't you just split the customers order up into 3 different shipments? It sounds to me like you were saying that it costs more to ship 1 130# package than it does to ship 3 55# packages. And I'm sure the $10 shipping surcharge on bulk grains helps cover some of the shipping.

And on that note is AHS stuck with using UPS? Last month I shipped almost 20 oversized 45# packages across the US with DHL and didn't pay more than $16 each shipped.

 

[scinerd3000]

Seriously, why would you think I am pissed? I never get pissed.
Well I got pissed once when an employee started to pour some dark liquid extract and went to the bathroom and took a magazine with him. He poured about 300 pounds on the ground. I had him clean it all up then fired him. Slacker duuuude.

thats alot of $$ down the tube. Ide be pissed too. In retrospect i guess we all enjoy a rant now and then.

 

[bigben]

Well, I have officially shattered my personal 'Longest Thread' record.

Just have to say to Forrest -- Thanks for the excellent product!! You will be my 'Sorta-Local HBS' for the time being, unless you start ripping me off,

 

[tranceamerica]

my LHBS prides himself on keeping prices low. he charges about $3 for 2 oz of hops (you have to buy hops w/other ingredients) and $1.20 / lb for base malt, and I think $1.60 for specialty. He apologized about raising the grain prices ten cents a pound because his price went up.

If you are in seattle, then check out Market Cellar Winery:

http://www.marketcellarwinery.com/

his prices online are all wrong (ignore online pricing) but drop into his store and enjoy good service and low prices.

EDIT: high shipping prices are killing all sorts of online business, IMHO. EBay for example, has become silly - shipping is often more than the thing you are buying, so I don't even buy stuff from there anymore.

EDIT AGAIN: I also appreciate bob's homebrew here in seattle - prices are higher, but store is clean, I can mix & match my own grains, and he's well stocked. Although I wish he'd put prices on the yeast and hops, been suprised how high they were several times when taking them up to the register.

 

[CBBaron]

To be fair are you saying that as a whole AHS is losing money every quarter?

With all due respect, we all love your shipping prices but I think we all know that you make up for that (when you can) in your every day prices for other items. It is truly great that you offer a flat rate shipping, but the song and dance about how you are always losing money on shipping is getting old. (I did preface this with all due respect)

It seems to me that this is pretty simple, if AHS was losing money on a regular basis with their flat rate shipping they would do do one of two things.

Stop offering the flat rate shipping or go out of business. Do I need to state which I think you would pick?

Now as far as your shipping 130# of grain for $109 I don't understand that one. If it costs $27 to ship a 55# sack, why wouldn't you just split the customers order up into 3 different shipments? It sounds to me like you were saying that it costs more to ship 1 130# package than it does to ship 3 55# packages. And I'm sure the $10 shipping surcharge on bulk grains helps cover some of the shipping.

And on that note is AHS stuck with using UPS? Last month I shipped almost 20 oversized 45# packages across the US with DHL and didn't pay more than $16 each shipped.

I believe Forrest was referring to it being a minimum of $27 to ship 55# of grain. Shipping from Austin to Vermont would be on the high end of any shipping rates.

I think everyone here realizes that AHS makes up the shipping cost in the base price, however that policy does do several things for the customers. It makes it easier to figure the cost of your order before going to checkout and it encourages big orders to take best advantage of the shipping rate. I'm stil willing to bet the AHS barely breaks even or worse on some of those orders like the guy from Vermont.

As for the OP, I would guess that store has a very slow turn over of inventory and so he needs a better margin to cover overhead. Which ofcourse slows down the turnover even more. I would guess he will either have to reconsider his business plan in the near future or end up closing. The only exception would be if it is a store that makes most of the money from a different source and just sells home brew ingredients as a side. Like several of the local HBSes near me. One is a beer and wine store another is a brew-on-premise.

Yes capitalism does allow a business to charge what it like regardless of cost, however someone who prices themselves well above the competition will usually find themselves losing business that won't come back. This is usually bad for the business in the long run. I'm all for supporting the local business "IF" they are comparable or better than the competition. But I will not pay a significant premium or put up with poor service just to buy local.

Craig

 

[Austinhomebrew]

I believe Forrest was referring to it being a minimum of $27 to ship 55# of grain. Shipping from Austin to Vermont would be on the high end of any shipping rates.

I think everyone here realizes that AHS makes up the shipping cost in the base price, however that policy does do several things for the customers. It makes it easier to figure the cost of your order before going to checkout and it encourages big orders to take best advantage of the shipping rate. I'm stil willing to bet the AHS barely breaks even or worse on some of those orders like the guy from Vermont.

Craig

I am not complaining that I paid $109 to ship the order. Just offering clarity that $27 is not expensive to ship 55 pounds. I have tried DHL and my customers revolted. They suck. It doesn't matter if they are a little less expensive if they suck.

As far as making up the shiping cost on the base price, that is not true. That is assuming that all Homebrew stores make the same amount of profit.
We pay UPS $250,000 over what we collect in shipping charges a year. That is not making it up on the base price. I will say it again, I am not complaining. We should have the best delivered price for your order.
People keep saying we have to make it up somewhere but we don't. We just don't make as much profit. I am not complaining. If people can believe that Walmart doesn't make it up somewhere and they have a lower total bill why can't they believe that we don't take as much margin as other stores. Target makes 4.6% profit and Walmart makes 3.2% they don't make it up somewhere they just take less profit and more people shop there. So much that every 12th dollar is spent at Walmart.

 

[neuron555]

Not to send this thread off in a different direction, but there is also more to a business than just the price. I have two LHBS nearby, and their prices are decent, but they don't always have every specialty ingredient. Those I can find at a place like AHS. The other thing that may make you loyal to your local place, is the the personal service you may or may not get. I'd love the place with the brew on tap, but one of my places has an arrogant b-----d who thinks he knows everthing. On a few occasions, I have gone in and mentioned something I read in this forum, and got treated like I was the village idiot. Guess where I only go when I am desperate? Bought my last order from AHS.

 

[neuron555]

And yes, I started my own business.

 

[Austinhomebrew]

Thanks for the props.

Everyone should shop were they find the best combination of price and service.

Forrest

 

[Hoosierbrewer]

AHS pricing and and shipping should drive good cash flow. Walmart does not make a ton on each order, but they have cash flow and volume ad can have a 2-3% net margin because of it. I have not ordered from AHS in several years, but plan to now. I se what they add to the forum and the responsiveness to questions. I wish my brother was still in Austin so i could stop by.

When I moved to IN, I noticed that the shops were not as stocked as they were in MI. I had many shops I could go to to get supplies. Here I have my LHBS or I can go to Indy or Fort Wayne. It is just as easy for me to order from AHS. In fact, I plan to tell my LHBS about them so they can see what they have to offer.

 

[Hoosierbrewer]

And yes, I started my own business.

I could not agree more. I am in the start-up phase of my business. Service is all that sets people apart in my industry.