A winery operation has more than the average business’ amount of sales channels.
They may even have classes, events, food sales, and sometimes even more!
Not only is it first difficult to price a bottle of wine, it then becomes difficult to stay up-to-date on your sales channels and to manage inventory in the different warehouses.
Here are 3 easy steps for maintaining good, clear lines in your sales channels:
Get a Strategy to Collect Sales Data
Sales from all of these different channels creates potential confusion and convoluted sales numbers in your accounting system. We recommend you take the time needed to develop a strategy.
Determine the sales channels that should be grouped together and those that should be separated. These decisions will impact how the accounting is done and which Point of Sale systems, online sales systems, inventory systems, and many other systems will work together.
Know where your bottles are!
Set up a system to monitor inventory in real time (or as close to real time as you can get!).
Think about your tasting room, for example, you need to know how many bottles a day the tasting room is going through on average so that you can accurately cost-out the expense of running the tasting room. Regular inventory counts will also help you to prepare your stock – the last thing you want is for your best-selling vintage to run out on Saturday afternoon simply because there isn’t a cycle-count system in place.
Do you have a single warehouse or many? What orders are fulfilled out of those warehouses? Be sure all of this is organized and thought through.
Depending on the strategy in step 1, different inventory systems may be necessary to track the inventory in each area of your business.
Know how much your bottles cost
One of the more complicated elements of winery sales is actually not related to sales at all….and that is the cost of the bottle. If it isn’t related to sales, then why did we put it on the list? Well, the cost of the bottle sold should show on your financials when it is sold. So, in that respect it is very important that your accounting system as a whole and is connected to sales.
Most of this comes down to cost accounting and pricing the wine properly.
Costing a bottle of wine isn’t easy. Many people simply set the price based upon what they think will sell but this can cost big in the long run. A lot of times winery owners make a close approximation of their pricing without looking into the little details that make up the greater cost structure.
Even a $1 difference, on a high seller, can make a big impact when it comes to your yearly profits.
What is the Point?
All of these areas are critical because you want to know the profitability of each sales channel. Without this, how will you make good business decisions that will drive the business to success?
This is why it is key to identify what different sales channels have the best ROI and what the overhead costs are for each location or means of sale. That way you can hone in on how to grow your profitability smartly – by allocating time and resources to your best sellers and cutting down on points where you might be taking a loss.
It all starts with knowing the ins and outs of where and how the profit is coming into your business. So get started now!