?Distributor Margin The gross margin % your distributor takes when selling to retailers. 28–35% is typical. Applied to all SKUs unless overridden per row.
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?Retail Margin The gross margin % a retailer takes on top of their cost. Typically 30–45% depending on format and channel.
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SKUs
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active products
Avg FOB / Case
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supplier → distributor
Avg Dist Sell-In / Case
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distributor → retailer
Avg Dist GP / Case
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gross profit per case
Avg Retail / Pack
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estimated shelf price
Avg Retail / Single
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per individual unit
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Product Configuration
Supplier → Distributor
Distributor → Retailer
Retail Shelf
SKU / Flavor?SKU / Flavor The product name or flavor. Each row is one SKU in your portfolio.
Size?Container Size The size of an individual can or bottle in this product.
Format?Pack Format How the case is structured. A 6×4 means 6 four-packs per case (24 units total). A 2×9 means two 9-packs.
Packs?Packs per Case How many retail packs are in one case. E.g. a 6×4 case has 6 packs.
Units?Units per Pack How many individual cans or bottles are in each retail pack. E.g. a 4-pack has 4 units.
FOB / Case?FOB Price per Case "Free On Board" — the price a supplier charges a distributor for one case, before freight. This is your starting number.
Freight+Tax?Freight & Excise Tax Any per-case costs added on top of FOB — delivery, fuel surcharges, or state excise tax. Increases the distributor's landed cost.
Landed Cost?Distributor Landed Cost FOB + Freight + Tax. This is what the distributor actually paid to get one case in their warehouse.
Margin %?Distributor Margin The gross margin the distributor takes. Defaults to your global setting above. Type here to override for this SKU only.
Sell-In / Case?Distributor Sell-In Price What the distributor charges the retailer per case. Calculated as: Landed Cost ÷ (1 − Margin%).
GP / Case?Distributor Gross Profit per Case Sell-In minus Landed Cost. The distributor's dollar profit on each case sold.
Margin %?Retail Margin The gross margin the retailer takes. Defaults to your global setting above. Type here to override for this SKU only.
Mode?Pricing Mode Fwd: Enter FOB, calculate shelf price. Rev ←: Enter target shelf price, calculate required FOB.
Retail / Pack?Retail Price per Pack Estimated shelf price for one retail pack (e.g. one 4-pack). In Fwd mode this is calculated; in Rev mode you set this as your target.
Retail / Single?Retail Price per Single Unit The per-can or per-bottle shelf price, calculated by dividing the pack price by units per pack.
Learn More
What Is a Beverage Margin Calculator?
A beverage margin calculator is a pricing tool that models how costs and profits flow through the alcohol distribution chain. In the United States, most alcoholic beverages move through a three-tier system: from producer to distributor to retailer. Each tier applies its own margin, and a small change at the top cascades into a much larger change at the shelf. This calculator lets you see that full cascade in real time.
Unlike generic profit margin calculators, this tool is purpose-built for the beverage industry. It handles FOB pricing, freight and duty adjustments, distributor sell-in margins, and retailer shelf margins across multiple SKUs simultaneously. Whether you are launching a new craft beer, importing a wine label, or pricing a line of RTDs, the calculator shows you exactly what every party in the chain earns on each case.
Why Three Tiers?
After Prohibition ended in 1933, the US established the three-tier system to prevent vertical monopolies in the alcohol industry. Today, nearly every state requires producers, distributors, and retailers to operate as independent entities. That regulatory structure makes beverage pricing more complex than most consumer goods. Read the full guide to the three-tier system.
How to Use This Calculator
Forward Pricing (Cost → Shelf)
Start in Forward mode (the default). Enter your SKU details, set an FOB price per case, and add your distributor and retailer margin percentages. The calculator will compute the distributor sell-in price, gross profit per case, and the final retail shelf price automatically. This approach answers the question: given my costs and margin targets, what will consumers pay?
Reverse Pricing (Shelf → Cost)
Switch any SKU row to Reverse mode by clicking the Rev button. Now you set a target retail shelf price and the calculator works backward through distributor and retailer margins to determine the FOB price you need to charge. This answers the opposite question: given a target shelf price, what FOB price do I need?
For a deeper walkthrough of both methods, see the Retail Strategy chapter of the Beverage Pricing Playbook.
Beverage Pricing Formulas
These are the core formulas the calculator uses behind the scenes. Bookmark this section as a quick reference.
Margins vary significantly by beverage type, tier role, and sales channel. The tables below reflect typical ranges for the US off-premise (retail) channel. Use them as starting points when modeling your own pricing in the calculator above.
The benchmarks above reflect off-premise retail (liquor stores, grocery, convenience). On-premise venues (bars, restaurants) typically apply 3–5× markups on wine and spirits, yielding 65–80% gross margins. This calculator is optimized for the three-tier off-premise distribution flow.
How Three-Tier Beverage Pricing Works
Every price a consumer sees on a shelf has been shaped by three separate businesses, each adding margin to cover their costs and earn a profit. Understanding this chain is essential to setting competitive prices.
Tier 1: The Supplier (Producer)
The producer manufactures the beverage and sells it to a licensed distributor at the FOB price. This price must cover raw ingredients, packaging, labor, excise taxes, and the producer's target gross margin. The FOB price is the foundation of the entire pricing chain. FOB Pricing Explained.
Tier 2: The Distributor
The distributor purchases at FOB, adds freight and handling costs to arrive at a landed cost, and then applies their own margin to set the sell-in price (what they charge the retailer). Distributor margins fund warehousing, refrigerated trucking, sales teams, and compliance. Distributor Margins Explained.
Tier 3: The Retailer
The retailer buys at the sell-in price and adds their margin to set the shelf price consumers see. Retail margins cover rent, staff, shrinkage, and category management. In many categories, the retailer's margin is the largest single markup in the chain. Retailer Margins Explained.
Ready to manage pricing across your full portfolio? Alculator lets you track margins, manage multiple brands, compare markets, and share pricing with distributors and retailers—all from one dashboard.
Key terms used throughout the three-tier system. Bookmark this section as a quick reference.
FOB (Free on Board)
The price a supplier charges a distributor, excluding freight. The “factory gate” price. Learn more.
COGS
Cost of Goods Sold. The direct cost to produce one unit: ingredients, packaging, labor, and excise taxes. Learn more.
Landed Cost
Total cost to the distributor after freight, duty, insurance, and any import fees are added to the FOB price.
Sell-In Price
The price a distributor charges a retailer. Also called the “wholesale price” or “distributor price.”
GP (Gross Profit)
Revenue minus cost, expressed in dollars. Gross profit per case is the key metric distributors track for each brand.
Gross Margin
Gross profit divided by selling price, expressed as a percentage. The standard profitability metric in beverage pricing. Playbook Ch. 3.
Markup
The percentage added on top of cost. Different from margin—a 50% markup is only a 33.3% margin. Convert markup to margin.
Three-Tier System
The US regulatory framework requiring alcohol to pass through three separate entities: producer, distributor, and retailer. Learn more.
Depletion Allowance
A discount or rebate from the supplier to the distributor, typically tied to volume targets. Reduces the distributor's effective cost per case.
SRP
Suggested Retail Price. The price a supplier recommends retailers charge consumers. Not legally binding in most states, but used as a planning benchmark.
Common Beverage Pricing Mistakes
Confusing markup and margin. A 30% markup is only a 23% margin. Many new brands overestimate their profitability by using the wrong metric. Use the conversion calculator to double-check.
Ignoring freight in landed cost. FOB does not include shipping. Distributors add freight, duty, and insurance before applying their margin. If you forget freight, your projected shelf price will be too low.
Using one margin for all channels. On-premise, off-premise, and DTC each have different margin structures. A shelf price that works in a liquor store may be uncompetitive in a restaurant, and vice versa.
Setting prices without modeling the full chain. If you only look at your FOB margin, you may not realize your shelf price is uncompetitive. Always model from COGS to shelf before finalizing your FOB.
Not accounting for depletion allowances. Supplier-funded discounts reduce the distributor's effective cost and change every downstream price. Build them into your model.
Pricing in isolation. The best pricing accounts for the entire competitive set on the shelf, not just your own costs. Research what comparable products retail for before locking in your numbers.
A beverage margin calculator is a tool that helps producers, distributors, and retailers model pricing across the three-tier alcohol distribution system. You enter your costs and target margins, and the calculator shows the resulting prices at each tier, from FOB through distributor sell-in to retail shelf price.
In the US three-tier system, alcohol must pass through three separate entities: the producer (Tier 1), the distributor (Tier 2), and the retailer (Tier 3). Each tier adds its own margin. The producer sets an FOB price, the distributor marks it up to create a sell-in price, and the retailer marks it up again to set the consumer shelf price.
Distributor margins for beer typically range from 25–33%. Domestic and imported beer generally commands 25–28% margin, while craft beer distributors often target 28–33% to account for slower turns and higher handling costs.
FOB (Free on Board) is the price a producer charges a distributor before freight costs. It represents the cost at the factory gate or shipping point and does not include transportation, duty, or insurance. Those additional costs are added separately to calculate the distributor's landed cost.
Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost. For the same product, markup is always a higher number than margin. For example, a 50% markup equals a 33.33% margin. The beverage industry almost always uses margin, not markup. Convert between the two here.
COGS (Cost of Goods Sold) includes all direct costs to produce one unit: raw ingredients, packaging materials (bottles, cans, labels, closures), direct labor, and excise taxes. It does not include overhead like rent, marketing, or administrative salaries. Divide your total direct production costs by the number of units produced to get per-unit COGS. Full COGS guide.
Off-premise retail margins on wine typically range from 33–50%, depending on the price point. Lower-priced wines tend to carry higher margin percentages, while premium wines may have lower margin percentages but higher dollar profit per unit.
Forward pricing starts with your cost (COGS or FOB) and adds margins at each tier to arrive at a shelf price. Reverse pricing starts with a target shelf price and works backward through margins to determine what your FOB price needs to be. This calculator supports both modes—click the Fwd or Rev toggle on any SKU row to switch.
Start by calculating your per-unit COGS. Then decide your target supplier margin to set your FOB price. Research typical distributor margins for your category (25–33% for most beverages) and retailer margins (25–50%). Enter all three into this calculator to see the resulting shelf price. Compare that shelf price against competitors in the same category and price tier to make sure you are positioned correctly.
Landed cost is the total cost to a distributor after all expenses are accounted for: the FOB price plus freight, duty (for imports), insurance, and any other fees incurred in getting the product to the distributor's warehouse. Distributors apply their margin on top of landed cost, not the FOB price alone.
Yes. While the calculator is designed around the three-tier alcohol distribution model, the margin math works for any beverage or product. Non-alcoholic beverages may skip the distributor tier (selling direct to retail) or use the same three-tier structure. Simply adjust the margins to match your channel.
Yes, the calculator above is completely free with no signup required. You can add SKUs, adjust margins, and export to CSV or Excel. For additional features like cloud-saved brands, multi-market pricing, analytics, and shared links, Alculator offers paid plans.