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View Full Version : Red Bull vs. Coke...



POP
03-02-2006, 05:44 AM
How much are you guys(distributors) paying for pallets of Coca Cola and Red Bull? Ballpark.
Thanks.

JP QuikServ Drinks
03-02-2006, 04:56 PM
red bull i am paying an average price of 29.50 per case, i am looking for a better deal. if i could buy at 27/cs. including shipping, i would buy alot.

POP
03-02-2006, 07:57 PM
Wow... Nearly $30 a case. Once my budget is figured out, my numbers should be below that figure. I want to give you guys higher profit margins with my forth coming beverage.

ALLPRO
03-03-2006, 12:25 AM
$29.50....you must be sub-distributing. I think distributors pay around $24.00 for Red Bull.

DudeMan
03-03-2006, 05:56 AM
Dizz, I should hope that your beverage will be below the price of Red Bull. The reason is very simple: Your beverage is not Red Bull. Me too brands sell for a little over half of that.

CStoreCatMan
03-03-2006, 01:09 PM
Dizz...love that video! Saw it on Kontraband. Woot!

POP
03-03-2006, 04:48 PM
Dude, trust me, my soda will NOT be a "me too" brand. The only thing my soda has in common with RB and all the other "me too" brands is caffeine.

CStore... I'm replying to Dude just for you, and me too. haha... What was that video for anyway?

CStoreCatMan
03-03-2006, 05:39 PM
For my viewing pleasure!! LMAO

DudeMan
03-03-2006, 10:06 PM
Dizz, I wish you luck with your drink. However what I meant is that when bringing a new drink to the market, being cheaper than Red Bull is not what will make distributors drop Red Bull and buy your product.

Mr Zabe
03-04-2006, 12:34 AM
Just my two cents.
No matter how good a new product is in an existing catagory; by the unwritten rule of whole sale and retail sales, the new product will have to be sold well below existing average catagory price to creat a market demand.

It's the way new products get their "foot in the door". The low entry price has nothing to do with the quality of the product. As an example, Vault has been on sale for $0.69 which is +/- approximately $0.70 cheaper that other single serve 20oz soda pops.

[ 03-03-2006, 11:34 PM: Message edited by: Mr Zabe ]

SumPoosieCat
03-05-2006, 02:10 AM
29.50 a case ??? Wow... even 24 sounds expensive. I priced Sumpoosie at 20 dollars a case for distributors buying 1000 cases or more. Hmmmm maybe I should charge 24 ! lol....

Red Bull Vendor
03-05-2006, 10:58 AM
whos gonna dump $20,000 on a product that doesnt even have a website running. I have emailed you guys at least 5 times and still have not got a response. For that reason alone I am no longer interested.

DudeMan
03-06-2006, 01:33 AM
TallThinBlonde....Just curious, $20/Case for what format and case of how many?

EJD
03-15-2006, 12:09 AM
I think distributors buy for $24 case and then sell to retailers at $32 per case.

SumPoosieCat
03-15-2006, 02:32 AM
Red Bull Vendor.... you bring up a valid point! It has taken a long time but on April 22nd sumpoosieonline.com should be fully operational and will be able to take orders for product and clothing on the site! I can tell you this much ... if you email me at sumpoosie@yahoo.com I will be sure to follow up with you immediately. I hope you understand that when you are a small growing company it takes a while to find out who really wants to work and who just wants to pick up a pay check. Again, I am sorry. Dudeman SumPoosie comes in a 16 ounce can 24 cans to a case and 100 cases to a pallet. Two thousand cases per truck.

Lepke
04-05-2006, 10:43 PM
The most I ever paid for an energy drink is $18.00 a case and I felt that was too much.

greg
04-06-2006, 11:47 AM
Price is not everything.

Quality, Marketing, Manufacturers Support, etc, all go into pricing.
Personally, I shy away from the cheapest thing on the shelf. Perhaps I have some skewed perception that higher pricing means higher quality.
If your product has good nutritional content and taste good then you shouldn't have to "whore" it out at rediculously low prices. By pricing your product so low you are sending an inadvertant message to the buyer that not even you believe your product warrants a decent price.

Look at Grey Goose Vodka. When introduced it was competing with products with very established and well respected histories. The guy who brought GG into America intentionally set his price point well above the rest to differentiate his brand. Today GG is one of the most recognized vodkas on the market that represents quality.

Always negotiate from a position of power.

Lepke
04-06-2006, 12:29 PM
Greg, the truth is these smaller or new companies are not really giving much in support.
They promise you the world and end up giving nothing. In the end it’s the distributor that is going to have to get the consumer to buy the product.
While all the manufacturers want big money for their products they will and do deal down. If not always on price, then with ongoing and permanent free goods or other incentives that end up bringing down the average case price. So if you figure an ongoing one free on three you substantially reduce the price to the distributor in the end.

Lets face it we know what they pay to pack this stuff and can easily figure out how much is really being put into marketing. When you figure all of that into it then a price of $18.00 a case is fair.

On the retail level you never want a consumer to perceive your product as being cheep or worth less. So you make sure the retailer prices it accordingly and only lower the price to the consumer by way of in store specials or sales. Making the consumer well aware it is a special and the regular price is higher.

A distributor who pays a higher price in the hopes that this new or unknown brand is going to back it up with real support is naive.

You look at it from the perspective of a manufacturer I see it from the distribution side.

[ 04-06-2006, 11:32 AM: Message edited by: Lepke ]

greg
04-06-2006, 01:24 PM
I see your point Lepke. The reason these new companies don't give much support is because they all want RB #s and don't put anything into marketing or real grass roots efforts.
As a distributor you must be willing to walk away from the sale. Most guys out there are afraid to do this and in the end get themselves in trouble by selling too cheap and not making enough money. These perpetual By 3 get 1 free deals are what has ruined the beverage industry pricing startegy over the years. Retailers get used to it and come to expect it. Wheres the value?
In my situation I ask all of my distributors to sell the product at wholesale. I give them the discount and ask them to keep that for themselves and use it for their overhead, not as a tool to lower the price. I want distributors that can see the forest through the trees and will still be selling my product and making money this time next year and the next year and so on.
If it cost me $14 dollars to produce a case of drinks(All overhead inc) and I sell it at $18 I don't have much room to move. I have painted myself into the proverbial corner right off the bat. Why should I give up all of the negotiating power by selling a retailer 4 cases at $18.
Position yourself in the market as a cheap product and that will always be what people see you as.

Lepke
04-06-2006, 01:27 PM
No no no no…. never sell it to a retailer for $18.00… that’s the distributor price……….

greg
04-06-2006, 01:40 PM
I would never sell my product that low. As a matter of fact I am probably one of the highest case cost out there even after giving my distributors a deep discount. But if they sell it at the price point I ask them to they will make some good money.
It creates value and it also positions it as a premium brand.

And by value, I don't mean cheap!

Lepke
04-06-2006, 02:27 PM
I had what I believe was a very classy product. But still it was a struggle to get the consumer to pick it up. The product had a very attractive package and was made in Austria. The flavor profile was along the lines of red bull but not quite the same I believe it is tastier Very good quality in deed.

It was costing me $18.00 a case and came with very good POS as much as I needed even the use of a beautiful branded van. I could not ask for more in support.
It was up to me to get the brand out there and selling.

My front line price was the industry standard $32.00 a case.
I insisted on a minimum of 3 facings of this single SKU telling the retailer that it was not worth my time to service them with less. I would sell them a case at $32.00 if they wanted but they would have to call if they needed more as would not stop back for 1 facing.

For the 3 facings in a good location I offered a discount on the case price on orders of 3 cases or more. Since it was very hard to get the real-estate (Eye level handle side when I could.) the discount was deep $5.00 a case. So they paid $27.00 a case on 3 cases or more and $32.00 for 2 or 1 case. Needless to say they most always took 3 cases or more.

This did help the product to move somewhat. The consumer could see it, it was attractive, made in Austria and tasted good. But it was still tough to get it really moving. The consumer had no reason to buy it over red bull a name they know and love.
So what was I to do?

I turned to the retailer (who hated red bull because the distributor treated they like crap, these were little mom and pops after all) I offered them the product at a further discount if they would run a 2 for $3.00 special. I sold it to them at $24.00 a case and had them sign a contract. (Not that it was an enforceable contract) that they would sell it at that price. I made up some signage stating the special price and that a single can was still regular price. The retailers really liked this as people still bought one can and that increased their profit nicely.

It was not long when my customers started calling between my service calls. These people rarely call when they run out of product but they were calling me. I went from selling 3 cases or less every two months to the average mom and pop to selling 3 to 6 cases every two weeks. And in many cases it was up to 10 or more cases in a two-week period. In more then just a few places it was out selling red bull.

So I was only making $6.00 on a case but I was selling cases. The consumer perceived that it was a high quality product that was on special and they were getting a great value.
The retailer helped a lot, informing their customers of the great deal on the other energy drink that was from Austria.

Well that’s the story.

Red Sox fan
04-06-2006, 04:37 PM
Greg,

Tell that to "Two buck chuck" and "yellow tail" wine. Both great examples of companies who entered their market as "Value" brands and were HUGE overnight succeses.

greg
04-06-2006, 06:44 PM
Red Sox Fan,
I don't believe at anytime that I said that pricing your product cheap was an indication that it could not be successful.
My point is that if you start with an overall high pricing startegy it is easier to make accomodations later on in your pricing. If Yellow Tail is to try and make a move into the more moderate priced selections of wine in the market they will eventually have to move away from the cheap price. Once the retailers get used to the cheap pricing they will have a hard time buying the same old Yellow tail at a higher price. Therefore, yellow tail will stay on a side rack attracting breeze by buyers who really aren't sophisticated wine drinkers. It will be relegated to the case stacker and have no room in the Wine Rack. I'm not saying it's wrong that they take this strategy, Thats just the way I see it.
You will always have people that buy solely on price, theres no getting around it.

DudeMan
04-07-2006, 07:17 AM
What about starting off real cheap just to get a foot in the door? Is it possible to raise the price once (or remove the free case deal) once the product starts moving? Or is it that once you have positioned yourself as a "cheaper" brand, it's impossible to change your pricing position?

Lepke
04-07-2006, 09:46 AM
It’s that if you start high you can deal down. Very hard to deal up.

Mr Zabe
04-07-2006, 09:58 AM
Just like a used car dealer. LOL

Lepke
04-07-2006, 10:06 AM
Unlike used car sales, you are going to be selling to these people again and again.
When you give them a special they better know it’s temporary and they are getting a deal.

greg
04-07-2006, 10:18 AM
Originally posted by Lepke:
Unlike used car sales, you are going to be selling to these people again and again.
When you give them a special they better know it’s temporary and they are getting a deal. We all know the retailer does not understand the concept of "introductory offer" or "one time only deal" Give it to them once and they expect everytime. It's just business!
I find it easier to go in higher than I really want and negotiate down(letting the customer believe he won) to want I "really" want.

Mr Zabe
04-07-2006, 10:22 AM
That's what I meant by a used car salesman.
That's the art of a deal in big or small business.