Page 80 - Bord Bia

CONTENTS

STAGE 1

e) Route to Market
Continued

Pricing Tree International Market Example FOR ILLUSTRATION ONLY

This example shows a pricing tree for an imported case of Irish spirits to the US market. It takes
an average selling price of $65 per case from a supplier and works through the various costs,
duties and margins required by all parties involved. There’s an importer, a distributor and a
retail customer involved as they need to be independent of each other under US law. The
margins and estimates are for directional purposes. You must populate your own pricing tree
to calculate this accurately for your own business.

Pricing Tree Example: 750ml Bottle of Spirits to the US Customers Converted to US$
Pricing Variable: Comment: Value : USD
Your selling price per case (from your home port) Freight On Board (FOB) Price 65.00
Ocean Freight per case (12 bottles per case) Cost to ship 4.50
Federal US Tax / Duty (on 40% abv spirit) US taxes 26.00
Insurance 1.40
Total Landed Price in US Per case price landed in the US 96.90

Importers Margin (45%-50% of Price to distributor). Importer's margin requirement 88.24
Price to Distributor Total of Landed Price + Importer Margin 185.14
State Tax Added to price 15.30
Freight Added to price 2.50
Distributor Margin (33% mark up on total price) Based on a 33% mark up on total price 67.65
Distributor Price to Retailer Selling in price to retail customers 270.59
Retailier Margin (33% mark up on Distributors price to retailer) Retailer profit 89.29

Retail Case Price Price of 12 bottles x 750ml 359.88
Retail Bottle Price Selling price to consumers 29.99

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