LHBS Inventory

[VirginiaHops1]

Actually, the LHBS could just as easily charge normal pricing on say the first 40 lbs and then adjust the pricing on the remaining 15 lbs. That way, they receive and benefit with full retail pricing in case someone did not want to go through with buying all 55lbs.

However, it is easier for the LHBS to probably take the discounted money up front and keep track of the account and amounts used. Either way, there is extra bookkeeping to perform. In essence under the "pay up front virtual" plan, the LHBS is acting like a storage facility. This may be a good thing since the inventory is probably turning over at a faster pace at the LHBS as compared with the home brewer.

The LHBS could do that, but again what's the benefit to them? If they're going to do the customer a big favor by basically storing their grain they would make the customer pony up the money upfront. Of course they wouldn't have to, but I'd bet most stores running that program would. I surely would

 

[Blazinlow86]

Fwiw one of the lhbs here sells full sacks at the normal bulk pricing in advance and then stores them free of charge. Cheers

 

[CodeSection]

The LHBS could do that, but again what's the benefit to them? If they're going to do the customer a big favor by basically storing their grain they would make the customer pony up the money upfront. Of course they wouldn't have to, but I'd bet most stores running that program would. I surely would

I'm not sure the point or points you are trying to make. Obviously, any type of program where the LHBS has a "virtual bulk sale program" regardless how it is accounted for, involves the LHBS storing the grain.

In regards to the LHBS protecting themselves, they can collect their money either all at a discounted price upfront or some fraction like full retail pricing on the first 75% or whatever percentage or figure they feel is necessary. By not requiring the full payment upfront on the 55lbs, some customers may benefit that otherwise would be prohibited from participating. Either way or combination thereof, the LHBS is protected from individuals that may not fulfill their intentions of buying 55lbs. It is that simple...and each LHBS can decide what works best for them and their clientele.

Anytime a business can provide value and great service, is a good thing. You know...goodwill.

 

[mashpaddled]

The benefit to your LHBS to store your bulk grain for you is that you keep coming back to the shop. The more you come to the store the more likely you are to buy something from them when you are there. If you are in the shop or know you have to go to the shop for grain you are more likely to order your hops and yeast at the same time versus another shop or online. You are also more likely to make impulse purchases. Comparably if you buy a full sack and take it home then who knows when you might come back. People who buy bulk tend to shop the best deals and buy infrequently. This turns infrequent and potentially single purchase customers into repeat customers.

Taking your money up front helps them out but regardless of when they charge you they are not really keeping a bag in the back just for you. They are selling you increments out of their general supply at bulk prices. The minor cost of maintaining a spreadsheet with your name and remaining inventory is far, far less than the financial value of your repeat business opportunities.

 

[VirginiaHops1]

Anytime a business can provide value and great service, is a good thing. You know...goodwill.

Storing grain for a customer at bulk price is providing value e.g........goodwill. If they don't want to collect the money upfront good for them but they certainly could and they'd still be doing the customer a favor. And depending on their cash flow situation they may NEED to. So maybe some don't do it that way but I'll bet a lot do. The point is pretty clear and simple but I don't really care to argue about it.

 

[CodeSection]

...The point is pretty clear and simple but I don't really care to argue about it.

But you just did....lol

 

[bucketnative]

Fwiw one of the lhbs here sells full sacks at the normal bulk pricing in advance and then stores them free of charge. Cheers

One the LHBS in Philly sells "virtual grain sacks." Basically, you pre-buy 55 lbs of base malt at the discounted sack price, but the LHBS would just take it out of their inventory for you when you needed it; rather than holding an actual sack with your name on it. The other cool thing about it was that the "virtual sack: was not limited to one grain type; if you bought the virtual premium sack you could get any of the premium base malts (Weyermann Floor Malted, Chateau Belgian Pils, Maris Otter, etc...) versus the cheaper virtual domestic sack. For a city like Philly, where space in a small row home/apartment is at a premium, it worked well for me.

 

[kh54s10]

One the LHBS in Philly sells "virtual grain sacks." Basically, you pre-buy 55 lbs of base malt at the discounted sack price, but the LHBS would just take it out of their inventory for you when you needed it; rather than holding an actual sack with your name on it.

I would expect that most if not all LHBSs that have a grain buy program like this do not store multiple open sacks for individual buyers. That would require too much storage space. Lengthy time for the use would allow the grain to go stale, or loss if never finished. Neither would be a good service to the customer.

If I was the LHBS, it would be discounted price up front for the 50 or 55 pounds. Trying to keep track and get paid each time would be to cumbersome. That would be more like just discounting for all.

I might add an additional discount once a customer goes through x number of virtual bags.

 

[Tony_nc]

Just found this thread today. I'll definitely follow this progress. I'm in SW Littleton. It was sad to see a couple LHBS close earlier this year.

Ideally I would like to see selections from local maltsters and yeast shops, and hops in the .5 and 1lb packaging sizes.

Good luck!

Edit: I'm a bozo! I just realized you are in Denver, NC. Too far for me for a Local HBS. Good luck!

I totally understand mistertinkle,
We have a Littleton in NC also.
The quality of products and customer service may have you thinking different. Maybe check out the website when it goes live and decide then.

By the way its only a mere 24 hour drive or so. Home before the weekend is over lol

 

[CodeSection]

I totally understand mistertinkle,
We have a Littleton in NC also.
The quality of products and customer service may have you thinking different. Maybe check out the website when it goes live and decide then.

By the way its only a mere 24 hour drive or so. Home before the weekend is over lol

I made the same. Here I thought a 14-15 hour drive from AZ to CO in one day was long....

 

[Tony_nc]

Fun fact:
Up until about 1873 we were known as Dry Pond not Denver. With all the expansion going on in Colorado they decided to change the name to Denver in hopes that it would bring new growth to the area.

 

[CascadesBrewer]

The other cool thing about it was that the "virtual sack: was not limited to one grain type; if you bought the virtual premium sack you could get any of the premium base malts (Weyermann Floor Malted, Chateau Belgian Pils, Maris Otter, etc...) versus the cheaper virtual domestic sack.

That is actually a pretty cool feature. I have been trying to figure out a strategy for having multiple base grains, without having to have 3 or 4 large sacks of grain around. I have a few shops that I can drive to and the options are 50/55 lb bags, per lb for over $2/lb, or a limited supply of grains in 10 lb bags.

 

[mashpaddled]

Fun fact:
Up until about 1873 we were known as Dry Pond not Denver. With all the expansion going on in Colorado they decided to change the name to Denver in hopes that it would bring new growth to the area.

This was not a fun fact

 

[Tony_nc]

OK so things are going along well. Ive enjoyed the critique from ever one especially CodeSection, positive and negative. We are shooting for the beginning of 2020. There are many things you have to think about but a good location might be the toughest.

 

[CodeSection]

OK so things are going along well. Ive enjoyed the critique from ever one especially CodeSection, positive and negative. We are shooting for the beginning of 2020. There are many things you have to think about but a good location might be the toughest.

I'm glad you are moving forward! I would encourage you to make sure you have plenty of working capital (over and beyond the purchases of inventory) that you will need for perhaps the first two years.

It is complete nonsense and doomed for failure to setup a virtual bulk sale program and collect all the money up front because you may NEED the cash flow. That is a poor strategy and very poor advice. At best it would raise maybe $3,000-$5,000 as a one shot increase in cash flow while raising your obligation to your customers. If you need the cash flow from such a program, you have bigger problems or issues and maybe you should not open up or stay in business.

As you are aware, the true purpose if you decide to establish some type of virtual bulk sale program is to engage the customers to keep coming back and buying from your LHBS. Thus, increasing sales and generating customer goodwill.

It sounds like you have a great business model of trying to attract customers by providing added value through educational events at the store. I wish you great success and only wish you were in Denver, CO so as I could one day be a customer! Please keep us posted on your progress.

 

[user 263363]

As a somewhat local to you home brewer, I’d love to see a more inviting store front than what’s currently offered in the area. I don’t know if I need to do any name dropping, but the store closest to me is more of a dank warehouse. Also, the help is very inconsistent. One day you might go in and find someone very helpful and friendly, and the next day the complete opposite is there.

Having said that, their inventory is quite good. Especially on a ‘need it right now’ basis.

 

[kh54s10]

I haven't kept up with all the replies, but early on it was suggested that you would keep on hand a good selection of equipment that advanced brewers would use but you would not sell a lot of. I think it is important that you can source these things and maybe in time have some on hand. But, don't tie up your inventory with items that you will sell very few of.

I would rather be assured that you will have the grain I need or the yeast I want, caps, corks, airlocks etc, than the $1000 brew controller sitting on the shelf for a couple years waiting for the right buyer.

But I am sure you have thought of this.

 

[mistertinkle]

OK so things are going along well. Ive enjoyed the critique from ever one especially CodeSection, positive and negative. We are shooting for the beginning of 2020. There are many things you have to think about but a good location might be the toughest.

Good luck and keep us updated!

I too wish you were local to me.

 

[Tony_nc]

As a somewhat local to you home brewer, I’d love to see a more inviting store front than what’s currently offered in the area. I don’t know if I need to do any name dropping, but the store closest to me is more of a dank warehouse. Also, the help is very inconsistent. One day you might go in and find someone very helpful and friendly, and the next day the complete opposite is there.

Having said that, their inventory is quite good. Especially on a ‘need it right now’ basis.

I know what you are talking about and I feel you. I have the same mental picture, I could tell you 100 stories just not in an open forum.

 

[Tony_nc]

I haven't kept up with all the replies, but early on it was suggested that you would keep on hand a good selection of equipment that advanced brewers would use but you would not sell a lot of. I think it is important that you can source these things and maybe in time have some on hand. But, don't tie up your inventory with items that you will sell very few of.

I would rather be assured that you will have the grain I need or the yeast I want, caps, corks, airlocks etc, than the $1000 brew controller sitting on the shelf for a couple years waiting for the right buyer.

But I am sure you have thought of this.

I appreciate it
I have thought about it and I think, in the beginning, my plan is to stick to the 80/20 rule or better known as Pareto's Principle. I demand high standards and I expect to deliver the same to all my customers.

 

[AzOr]

+27 on the virtual grain sacks. I've been buying virtual grain for several years and I love it. Every time I pick up 10lbs of grain, guess what else I get? Yup, all my hops, yeast, specialty malts and other smaller items. It's a win win.

Not sure this has been mentioned, but-- CO2 refills would be great. I'm not a fan of the exchanges. Often I fill up when Im down to 25% or so. If I wait till I'm out, it's usually at a time that's not convenient. Kinda like waiting to fill up my truck when I'm empty. Not good.

Best of Luck to you. It's cool to see a lhbs run by someone with lots of passion.

Ps- Convenient store hours are a great thing as well. Because I have little ones around the house, often I'm cramming in a brew day early on the weekends or late weeknights. One of my lhbs opens at 8a on Saturdays which is fantastic.

 

[kh54s10]

Ps- Convenient store hours are a great thing as well. Because I have little ones around the house, often I'm cramming in a brew day early on the weekends or late weeknights. One of my lhbs opens at 8a on Saturdays which is fantastic.

Yes, hours.... When I started there were two LHBSs in my area, they were only open about 4 or 5 hours a day and only 4 days a week. And more than once I went and they were not open when they were supposed to be. One is long defunct. And 3 more were added to the area during the next 6 years.

 

[AzOr]

^^^Yes consistent store hours are a good thing. I live in Portland and we have a crap ton of food carts here (I actually think if you added the # of food carts + weed shops, it would be more than the amount of people living here).
If the food carts listed their actual hours, it would say; "Meh, when we feel like waking up and cooking for your unworthy ass."

As far as store hours go, it's not reasonable to be open 24/7 like Wally World. However, for those of us who have to work for a living, staying open until 7ish would be great.

 

[brewbama]

This is the corner of the health food store that is dedicated to ingredients. There is a shelf not pictured with dry yeast and hops. And there’s a small selection of minerals and additives.

If you can open a store with this + an order form for whatever a customer wants within a week’s delivery you can make it.

 

[day_trippr]

[...]If you can open a store with this + an order form for whatever a customer wants within a week’s delivery you can make it.

Based on what - a health food store with a corner dedicated to home brewing?
Your store's contribution to home brewing is clearly supported by their core business.

Take that shelving (and hopefully a fridge for their hops - and not just a shelf) and make a business out of that.
Much more challenging these days...

Cheers!

 

[Hoppy2bmerry]

It would be nicer if they’d get a small fridge for the yeast and hops.

 

[brewbama]

True they don’t have much. What can I say. That’s what they have. They will order what they don’t have. Good folks.

I just picked up a sack of 2-row for less than the list price of any major online retailers I’ve checked and I didn’t have to pay shipping cost the online retailers charge. And they gave me a 10% vet discount on top.

 

[Dave Sarber]

True they don’t have much. What can I say. That’s what they have. They will order what they don’t have. Good folks.

I just picked up a sack of 2-row for less than the list price of any major online retailers I’ve checked and I didn’t have to pay shipping cost the online retailers charge. And they gave me a 10% vet discount on top.

Gotta love that 10% vets discount. Pays the state and local sales tax, and gives you back some change besides!

 

[Tony_nc]

Love it, brewbama

Since this is my thread I should add we are making great progress and I will post soon.

 

[day_trippr]

True they don’t have much. What can I say. That’s what they have. They will order what they don’t have. Good folks.[...]

Don't get me wrong - my point was only that it would be a tougher lift to make a go of a dedicated home brew store than to set aside a corner of some other type of retail establishment for a modest supply of home brewing needs.

I've seen a few home brew stores vanish over the last five years, haven't seen a single new one open. What was the largest lhbs in New England is almost full-ghost these days. Very sad, I may end up in the clutches of the e-tailers...

Cheers!

 

[Hoppy2bmerry]

There’s a hardware store (not exactly local to me) I needed something on a Sunday and I was in the area, they had less than half of what is in the image. So nice selection for a “side” interest, and even the larger LHBS don’t carry everything.

 

[Tony_nc]

Quick Update,
We are aggresively looking for a site (a little more difficult than I thought)
Secured money through personal and investors
My wife is handling the social media side and has FB and all the other forms set up.
I have all my vendor accounts linked and just placed my first order. House will be full of great brewing ingredients and equipment before the end of the year.
We are officially "The Brew Store of the Carolinas"........website will be up soon


I hope everyone has the best Christmas ever!

 

[user 263363]

Quick Update,
We are aggresively looking for a site (a little more difficult than I thought)
Secured money through personal and investors
My wife is handling the social media side and has FB and all the other forms set up.
I have all my vendor accounts linked and just placed my first order. House will be full of great brewing ingredients and equipment before the end of the year.
We are officially "The Brew Store of the Carolinas"........website will be up soon


I hope everyone has the best Christmas ever!

Congrats! What area are you looking at for a location? Closer to the Charlotte area or up around Denver? You'll definitely be close enough for me either way. Looking forward to stopping by!

 

[Tony_nc]

Thanks CaddyWampus
We are looking at Cornelius/Huntersville area. We have looked at a few places in Denver but we are a small town, I feel we need to be closer to the crowd.
Im excited to see everyone. If I can't find a good place soon we will be offering deliveries or my-house pickups. Our pricing beats anyone close to me. If I don't find a place before February I will be offering Brew classes at my house. DME and All Grain using my equipment. I'll have my wife bake cookies

Where are you in NC?

 

[user 263363]

Thanks CaddyWampus
We are looking at Cornelius/Huntersville area. We have looked at a few places in Denver but we are a small town, I feel we need to be closer to the crowd.
Im excited to see everyone. If I can't find a good place soon we will be offering deliveries or my-house pickups. Our pricing beats anyone close to me. If I don't find a place before February I will be offering Brew classes at my house. DME and All Grain using my equipment. I'll have my wife bake cookies

Where are you in NC?

I am in Kings Mountain, so Huntersville area would not be bad at all. Not much worse than driving all the way to Belmont as I do now for my brewing needs.

 

[CodeSection]

Quick Update,
We are aggresively looking for a site (a little more difficult than I thought)....We are officially "The Brew Store of the Carolinas"........website will be up soon


I hope everyone has the best Christmas ever!

I sense you may be feeling some anxiety when finding a location. Based upon experience as a tenant and building owner, I have been there. We recently renewed a lease on one of our offices and we started renegotiating a new lease six months prior to when our lease terminated. After slightly over three months of negotiation, we signed a new lease. With a market analysis in hand, plus our history with the owner, we were able to get a very favorable lease.

Don't be surprised if the landlord/owner you eventually deal with require personal guarantees with the lease. On our office building that we own, regardless of the entity type, we require personal guarantees. If individuals do not want to give the personal guarantees, we simply don't lease to them. In over 25 years, we have never had a problem with any of our buildings.

I know you probably already know this and a lot more. But a few items are worth repeating...

First, location, location and location. The better centrally located in your region to where the largest population is, the better. Needs to be in a safe location with adequate lighting....Cheap rent in a bad area of town won't cut it.

Secondly, access. You may have found the best location only to learn access is a nightmare. Maybe it involves only making a right turn....maybe only a left turn when exiting. Maybe it is hard just getting in and out of the business since traffic is heavy during rush hours which effectively closes the business for those hours.

Thirdly, security. Many businesses find places to rent like in a strip mall or large nesting of businesses. If you happen to have your space tucked away in the back away from the front of the road, not only may it be hard to find (mouse in a maze), but it probably would be a lot easier to break in. Yes, alarms help. But smash and grab happens in seconds to minutes well before police arrive. Try finding something that can be seen from the road. Being located in front provides visibility that can help deter robberies as well.

Remember the old days of Circle K and 7/11 stores plastering posters on the storefront windows. They have learned reducing those posters have lowered robberies....people can see in. Same thing applies to you since you are retail.

Fourth, lease term. Don't get into a long lease regardless of lowering costs with one. At this point, you want flexibility in moving in case you find you made a miscalculation in picking the location; you discover you need more space; or you find out your business endeavor is not profitable or requires way too much of your time with very little reward.

Good luck and don't rush in finding a location. Take your time.

Happy holidays to you too!

 

[Tony_nc]

Code I love ya, I don't know you but I love ya. Im sorry you had to type so much for me.

Ive thought about all those things and I see the issues. I would like to hire you as my negotiator or my attorney.

I see walls everywhere and intend to break them down

Hope you and your family the best holidays

 

[mongoose33]

Great advice by @CodeSection!

Let me add a couple things too, though you seem to be thinking this through pretty well so may have already considered them.

Being in a strip mall or similar has this advantage depending on the other stores: people love to do more than one thing when they make a trip to shop, so if they can not only visit your brew store but also pick up something else at the same location, it's a plus. Back in its heyday, strip malls loved to have a Blockbuster in the strip because they drove traffic to the strip mall, both when people selected tapes but when they returned them. So any place that has good traffic to other stores is a plus.

Can't recall, are you doing the wine thing? My LHBS has a section with wine kits, other ingredients, equipment, and so on. Driving additional traffic with something like that is a plus--though if you don't know about winemaking (I don't), advice for winemakers may be hard to offer. Some of this depends on space and so on. The more people who know about your place the better, and winemakers may be a good word-of-mouth resource.

Don't know if you're planning on doing CO2 tank swaps, but if not, you may want to consider that.

Good idea above about the lease term. If you find a place you like with a really attractive long-term lease rate, see if you can negotiate a buyout of the lease, say after 24 months you can buy out the lease for something like $1000 or $2000, something that would let you end operations there if the business isn't working or you find a much better or larger location. Not sure if that would be possible, but it may give you the safety of avoiding a long-term commitment like @CodeSection says, but with the lower costs that may be the difference between success and failure.

Good luck!

 

[Carolina_Matt]

One thing about Huntersville/Cornelius is that there's already a shop in Cornelius (Alternative Beverage, part of ebrew.com). I think they're going out of business though. It's good in the sense that you'd be losing competition, but bad in the sense that the location might not be able to sustain a full-time shop. It's also possible that they just don't run the shop well enough. If you haven't been there before, I'd recommend stopping in just to get a sense for how they're running the shop and how you can do better.

 

[CodeSection]

Both @mongoose33 and @CarolinaMatt make good points. Strip malls have their advantages.

When I researched Alternative Beverage, the Cornelius location appears to be located in a warehouse away from retail shops. If they are indeed closing that location, the lack of retail business may be a part of that decision. Cheap warehouse rentals are not the solution for retail. https://www.google.com/search?client=firefox-b-1-d&q=Alternative+Beverage+huntersville+nc show pictures at that location.

Here is Alternative Beverage's Charlotte strip mall location. https://www.google.com/search?clien...&ved=0ahUKEwjv69mShrjmAhUZFjQIHS1rBTIQ4dUDCAo Great signage with other businesses in the strip mall. Though, the name on the signage "Alternative Beverage" doesn't necessarily tell the reader what type of business it is. To me, I would have thought it was something like Wine & More. Imagine the foot traffic just having a Pizza Hut next door. That location appears to be on a regular street....not one with 50 MPH post. So traffic is not speeding by....

Alternative Beverage's Belmont's location is located in a warehouse. It has a lot of space and is not designed for retail. https://www.google.com/search?client=firefox-b-1-d&q=alternative+beverage+1500+river+dr+belmont+nc. I suspect it handles all of their online ordering. They have been in business since 1977 and appears to have a decent business model that has worked for them. Without question, their buying power is enormous and with that volume, I'm sure they are receiving excellent pricing on their inventory.

@Tony_nc, you are definitely located in a rural area. While Hwy 16 may be a good artery to your house, I'm not sure how far your customers would be required to drive. Working out of your home has advantages and disadvantages. If you are focusing on retail and trying to bring in new brewers through education, I believe the disadvantages far out way the advantages.

Just a few immediate disadvantages come to mind. You have no marketing/advertising benefits that a strip mall could provide. No one is going to drive by your house and say "let's stop by and see what they have to offer". You have effectively stopped all retail traffic. Personally, I would not go to your house. My perception (whether if it is true or not) is my reality. Working out of the house in a residential neighborhood sends the wrong message for retail. Sounds like a hobby trying to make it a business around your schedule. Lastly, security. I would never invite or allow strangers in my house or portion thereof. While strangers may not actually steal or break in at a later date, they may tell their friends about your house's layout. Crime travels and bad guys talk to other bad guys....

It sounds like your business model may be changing which could have a major impact on your success. You may want to contact a commercial real estate agent about what is available to lease in your area. They have lists of available properties. They are paid a commission by the owner of the property when a lease is signed. Many people believe they will be paying more by using an agent. This is not true. Market conditions control the lease pricing, not commissions. An owner will not be able to increase rents above market conditions to cover any commissions paid out. The benefit of a commercial real estate agent is they can run market analysis reports for you, they can find and show you properties and they can negotiate the lease deal. No deal is too small...check it out.

Again, take your time. Changing your business model may be a bad or good thing. I'm a believer when there are a lot of obstacles or walls that keep getting in the way, that is a major signal to reassess the situation. Many times new business owners are so focused on the tree that they fail to see the forest....they fail to see when the business venture really isn't as viable as they thought. I'm not trying to discourage you, but I would hate for you to lose your investment and that of others.

IMHO, your house location is only good for online orders....not for retail business.

Again, I wish you the best.