Should I open a Supply Shop?

[farmbrewernw]

I worked for a home brew shop for a little while and I don't think they had a population base of more than 60k to tap from. What the owner did that was different than many of the shops I had been to is that he sold specialty beers and wine. He also tied this with tastings and special events to get the community involved. From my short stent of time working there I could tell that the shop made more money selling wine and beer than anything else but because of getting people in for the bottle shop end of things it got more people into homebrewing. If I was to have a homebrew shop I would definitely have a bottle shop attached as I don't think you could make enough money to support the operations on homebrew sales alone.

 

[CGengo]

If the area has decent traffic after work hours, I would recommend opening a beer bar instead. 800 sq ft seems a bit small to me to have room for stocking a decent amount of grains, yeasts, hops, etc plus the big stuff like fermenters, pots, etc. We have this place in Tampa located in a nice residential area and they absolutely kill. On your average Friday or Saturday evening they are shoulder to shoulder selling quality beers on tap for $5 - 8 a pop. They are doing so well, in fact, that they will be building another 6 locations in the next 3 years. They have about 30 taps, 4 on nitrogen, serve all the beers in appropriate glassware, and have another 500 or so varieties available in bottles for immediate consumption or to take home. I know it's not exactly homebrew, but could allow to you make inroads with the local beer appreciating crowd, generate interest in homebrewing, and possibly even serve your own creations on tap (not sure of laws surrounding this). If I were going to get into the beer business, this is what I'd be looking to do. Check it out...Tampa Beer Bar - World of Beer - Westchase

Good luck,
Chris

 

[DeathBrewer]

my LHBS offers services for converting kegs into keggles. they will help people with their wines, even store them for a small amount of time for a fee, they have an amazing crusher (i'd definitely get a quality crusher) and they have the best service out there.

the owner works 16 hour days, easy. i heard he gets up at 3 AM to grab grapes during wine season. he has just-in-time ordering so all the stock is very fresh (it's amazing what they can fit in that little place anyway.)

i'd think it's a business where you have to work VERY hard and it will be a long time before you get any payback.

i would probably go with the tasting bar myself.

 

[joejaz]

you better re-read Forest's post, you are trying to create a market that doesn't exist in your area. And another thing, with the economy the way it is, now isn't the time to invest in a risky business venture.

 

[wolf08gang]

you better re-read Forest's post, you are trying to create a market that doesn't exist in your area. And another thing, with the economy the way it is, now isn't the time to invest in a risky business venture.

Likely you are correct. But a fella can dream can't he.

 

[DeathBrewer]

i'd also agree that that $100/year average is kinda off. i sometimes spend that in a week, just on ingredients.

 

[intoran]

Don't mean to hijack, but it seems like this is going in the right direction already. A friend of mine already has a storefront and agreed to let me use his store to setup. I would mainly be pursuing the online store option as I have a background in web development so the cost would be minimal in terms of actual dollars. Can anyone point me to some good distributors/wholesalers?

Thanks.

 

[foppa78]

Wolfgang I have no advice as to whether or not it is a good idea. I am one of the officers for the ZZHops homebrew club here on the Missouri side. To my knowledge we are the largest Kansas City area based club on the Missouri side. If you do decide to go through with this let me know and I will get you invited to one of our meetings so that you can meet the club and try to gain some customers.

 

[IndyPABrewGuy]

So, I'm sort of in the same situation as Wolfgang . . . I was recently offered to buy my LHBS for what seems to be a rather low start up cost, which I would move from its current location. From talking to the shop owner, he's more wine-heavy (70-30) and currently has people driving in from 40-50 miles away to purchase supplies. Being in an area of little and scattered population, providing a service more than a "store front" would be imperative to my success, and I would say the same to you, wolf. Anyone can go online and will always be able to beat your prices, but if you sell the knowledge that you've gained in your homebrewing experiences in a (previously mentioned, and +1) professional way through classes, events, and homebrew club meetings, you have a chance to survive.

Some other thoughts:

+1 on part time. Unless you're in a HUGELY populated area and are the only show in town, you're going to be hard pressed to make a ton of money.

+1 on homebrew clubs. Join every one you can find locally. I helped start our local one, and have gained some serious insight into how big my market would be.

+1 on selling HB supplies in conjunction with something else

-1 on "this damned economy" posts. People will be looking to save money, yes, but what better way than making a product you love rather than purchasing it. In tough times, people stop going out to eat. . . they also stop going to bars, but still want their drink, and you can make it (wine and beer) for cheap. Just a marketing idea.

+1 on knowing wine - I don't - but I sure as hell will learn if I pull the trigger.

+1 on forming a LLC or incorporating. Protect yourself and family.

Oh, and good luck. There's no guarantees in life, so no matter what you're taking a risk. Just do your homework and make your own decisions. It takes a lot of moxie to go into business for yourself.

Cheers,

 

[drunkendog]

If you do decide to open it, ill sign up to be the first customer! I live only a few miles from Excelsior Springs. It would be nice to have a store closer than EC Kraus in Independence (Wine Making Supplies: E C Kraus), although they do most of their sales on the internet.

Where exactly in downtown are you looking to put it in?

 

[Pivzavod]

you can always advertise online and if you purchase advertising on this site and offer good prices / good support i am sure there will be lots of people who will support you.

online business is your best bet and you can try to build up local customer base in the mean time.

 

[thataintchicken]

Having spent many years in the Promotion/Advertising biz I have two suggestions for ANY new business.

1. Keep the place clean.
2. Do not lie to your customers.

It is too easy to just order online and wait for the brown truck to bring your goodies. If you have a clean, well organized storefront and a civil and helpful staff, you will keep that customer coming back.

As a customer I would add;

3. Do not over extend yourself. If you are busy, find a helper - don't try to run it all yourself. There is nothing more annoying or potentially deal breaking than someone running back and forth between the stock room, the shipping area and taking orders off the phone/online.

Think of the things that make you dislike the competition -- then never repeat their mistakes.

Consider combining advertising with other stores in the area...
maybe create common themes, open houses and sharing resources with your neighboring businesses. They may know brewers, or can loan you a couple of reams of paper when you run out of it printing receipts.

Consider side items, like bread mixes, sourdough starters etc.
Home brewers like to tinker with food... sell them stuff

Good Luck!

 

[Skins_Brew]

3. Do not over extend yourself. If you are busy, find a helper - don't try to run it all yourself. There is nothing more annoying or potentially deal breaking than someone running back and forth between the stock room, the shipping area and taking orders off the phone/online.

I will agree with that. I was on a job interview and there is a LHBS located pretty closed. I stopped in after the interview with my list and the owner said it would be like an hour if I needed the grain crushed because he was expecting a shipment and all he has is a hand powered mill. I told him that was fine, take your time, and I would just hang out at the Dogfish Head Pub/restaurant right :cross:. As I sat there at DFH I felt for the guy because it definitely seemed like he was doing a million things at once.

 

[Jaybird]

This is a great topic. Remember some of the biggest business started in a downturned economy.
Just subscribing

 

[Hokie]

I will agree with that. I was on a job interview and there is a LHBS located pretty closed. I stopped in after the interview with my list and the owner said it would be like an hour if I needed the grain crushed because he was expecting a shipment and all he has is a hand powered mill. I told him that was fine, take your time, and I would just hang out at the Dogfish Head Pub/restaurant right :cross:. As I sat there at DFH I felt for the guy because it definitely seemed like he was doing a million things at once.

I go to said LHBS quite often and I just gave in and got my own mill because of this issue of theirs. When he told me I'd have to call in my order at least a day ahead of time in order to get my grains milled (at $0.10/lb), I knew there was no more hope. He usually does have a couple of helpers, but I think they really only work weekends (well, Saturday since they are closed Sunday...which I think is a mistake as well).
It's amazing what he can fit in that broom closet of his. When I go during the week for odds and ends, I think can tell why he remains in the broom closet...it's a ghost town. Although, on second thought, there is always a pallette of random stuff on his front stoop... someone's buying the stuff besides me.

 

[nowise]

Here in Columbus we have a store that sells pizza, craft/domestic beer, and homebrew supplies. Now that's a good combo, IMHO! Everything you need for a successful brew-day

 

[Pogo]

Hmmm...I'm not an expert on anything, but I would start out part-time, week-ends say, and only expand if/when forced into it by customer demand.

I would begin by ordering only minimal kits and basic pieces of gear, and listing it in the classifieds of the local newspaper, and PennySaver, BuffaloNickel, Shopper'sGuide, type of rags...while setting up display tables at flea markets, festivals, and craft-fair types of events, on week-ends.

Who knows?!!!

Pogo

 

[KayaBrew]

If you open a cyber-store, I'll be a customer!

 

[schneemann]

If you open a cyber-store, I'll be a customer!

The problem with that is most wholesalers of homebrewing stuff (esp. ingredients) want you to have a brick & mortar retail location as well.

 

[david_42]

PS If you want to start a new business, the only thing that sells is sex, pets and kids. If you can figure out how to combine all three you may have a gold mine.

And probably illegal in most states.

 

[mykayel]

I'll give my opinion to try and help you out. I live in South KC, so I've never looked to see if there is a LHBS in the North Lands, but if there isn't, then you might have a good idea. Personally, I buy almost exclusively online for two reasons, its typically cheaper and its more convienient than having to drive to the shop over in Shawnee, KS. The only reason I will buy from them is if I'm brewing and I don't have something, or to buy my base grains as I buy in bulk and its cheaper. Looking at them as an example, they have an internet site, but its a piece of crap, if you plan on doing any business online have a good website. If its not easily navigatable, you won't sell anything.

Now a lot of people do support their local shops so you may very well do good business. What you could do to help yourself out: have decent evening hours, if not every day, at least twice a week. Sell the supplies to make equipment like mash duns and keggles, sell them as "kits" with a pinted piece of paper for the instructions along with already set up pieces. Have a good crush on your grain mill, how many post have you seen on here where people complain about the crush (and efficincy) they get from their LHBS. I'd be another piece of equipment, but maybe even get a second mill with that finer crush and just advise your customers about a possible stuck sparge (the last thing you want is your standard crush to be to fine and all of your customers getting a stuck sparge). Definately do the classes/host clubs to help get new customers. Good luck. And if you have good prices on bulk grains I may even consider driving up there.

 

[Jaybird]

So the OP started this conversation well over a year ago. Since then I opened my store and have had a great time doing so. I have learned more about wine than I ever thought possible. I would very much tend to agree w/ Austin about the numbers. I am right on target in my first year w/ just about everything he posted, spot on. I started my store w/ almost NO MONEY at all and very little help from my EX business partner (now that’s a really long story and one I may tell some day). Although I put a ton of time into my business I have spent really very little money so far. You don't need to spend your life savings on this hobby/business.
I am really just responding here to find out what the OP ended up doing. Did you make a go of it?
Jay

 

[patrck17]

I am also curious after reading the first 20 or so post. Like so many others here I too have the dream of combining work with hobby and making a brewery, brewpub, or LHBS. I am short out of college and in no financial position to start a business, but the dream stays alive. With the big online sites and ease of online ordering, plus this economy I typically dismiss that there is a chance to make it work. I wish everyone else the best and hope the OP is living the dream. Grats on your current success Jaybird.

 

[Jaybird]

Grats on your current success Jaybird.

LMAO! I wouldn't call it a success just yet. I'm just getting started. We have only been open right at 7 months now. But we have a great customer base so far and just started advertising locally. My website is going to go live VERY VERY soon. I have a long ways to go my friend.
But thank you
Jay

 

[rwinzing]

Do it there are two stores close where I live the difference is iventory and knowledge. I pay more for things because I know he'll have it and I enjoy spending time in the shop poking around. Hil location isn't great but he's been doing it for 10 years.

Go luck......

 

[chiaroscuro]

I know this is an old thread....

I have worked in retail management for some time and I'm considering the possibility of opening a supply shop. As I have been reading this thread, I noticed that there are a lot of opinions about shipping cost, LHBS pricing, and online pricing. My question is:

How much mark up is too much?

If you get free shipping or flat rate shipping, the HBS is covering the spread with some of their profit. Someone has to pay the shipping cost...FedEx ain't delivering your Blichmann Top Tier for $7.99.

What gets your LHBS in the ballpark as far as pricing? What would make you buy 90% of your purchases locally?

 

[ReverseApacheMaster]

What gets your LHBS in the ballpark as far as pricing? What would make you buy 90% of your purchases locally?

You really have to decide what market(s) you want to appeal to. If you are trying to snap up the homebrewers that brew a lot you're going to have to have low margins so you can compete with the big vendors and go for volume sales. If you're going to try to get new brewers you can afford to have bigger margins but your salespeople/servicepeople need to know how to get people in the door and have the knowledge to sell the right products and you'll have to pay more in marketing to generate new customers (as your older customers will find cheaper places online and leave you). Are you going to be the slightly more expensive but well informed and well stocked convenient location? Your margins can be in between but you risk having to stock so much stuff that it might go bad on you before you can sell it.

I buy online most of the time because I place orders for several batches at once so with flat rate shipping I can get supplies cheaper than local places. However I do go to the local store when I need small amounts of supplies. I realize I am paying a little more for the convenience.

If you are charging more than the large vendors you need to think about what it is you do for your customers that justifies the mark up. Being local doesn't really cut it anymore in the big box world.

 

[chiaroscuro]

@ReverseApacheMaster

Your last line is the dagger. I'm willing to make a little bit less per sale if I can get most of my local dollars, but you as the consumer have to make a commitment to get most of you supplies locally. If you're not committed, someone will always have something for cheaper and LHBS will continue to struggle.

I'm not sure that there is much value adding that you can do in this business and I can assure you that being knowledgeable only goes so far. I'm not interested in marketing to bring in new customers that eventually end up as somebody else's customer purely on price. And I don't want to be the local last resort for that 1 pound of Crystal 40. No one can rely on this as a business plan.

Do we want to perpetuate the big box world or do we want strong local communities?

 

[TromboneGuy]

What would make me buy mostly locally? Selection. Can I get whatever variety of yeast I want, or hops, on the spur of the moment? Does the store carry unusual specialty grains? These are factors. Getting a 50lb bag of 2-row is easy.

 

[chiaroscuro]

@TromboneGuy

Great answer. Selection is important, what about price? How close does someone have to be for you to say "I know its a a few bucks more, but I like having the selection of stuff locally."