Are Bulk Buys Hurting Lhbs's?

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Hi all,

Just wanted to throw the question out there, "Are bulk buys hurting LHBS's". I'm lucky enough to have my raw ingredients "sponsored" to a certain extent but I still buy 99% of my gear from the LHBS. Even though I could potentially get stuff for cheaper via a bulk buy, I'm happy to pay for the experience of supporting the local scene. Any thoughts are welcome.

Booz

 

[clean brewer]

[quote name='The Ol' Boozeroony' post='444246' date='Apr 11 2009, 11:29 PM']Hi all,

Just wanted to throw the question out there, "Are bulk buys hurting LHBS's". I'm lucky enough to have my raw ingredients "sponsored" to a certain extent but I still buy 99% of my gear from the LHBS. Even though I could potentially get stuff for cheaper via a bulk buy, I'm happy to pay for the experience of supporting the local scene. Any thoughts are welcome.

Booz[/quote]

Guess it depends if your LHBS has what/all you need?? From my point of view and doing AG, my LHBS can only supply me with some Saf yeast(maybe out of date liquid), some keg fittings, glasses, some dry/liquid malt and thats about it, when I said to him about a Grain Bulk Buy, he told me to see him to organise it as he would be able to get it cheaper than Ross..

He doesnt even Grain brew and had this one random sack of grain(JW Pils) he tried to sell me for $70, dont even know how old it was..

Bulk buys seem good for some things, not others by the look of it.. :unsure:

:icon_cheers: CB

 

[barfridge]

Is free trade hurting those who seek to maintain profit margins? That's not really a tough question.

Such is capitalism. What do you propose? Fixed pricing? Establishment of monopolies?

As I see it, your LHBS has 3 options:
1. try to block bulk buys. They have had quite a bit of success with this. Try buying hops direct from a wholesaler these days, it doesn't happen. Grain is getting the same way.
2. do nothing
3. compete with bulk buys, or even better still, become part of the bulk buy process. Of course this often means reduced profit margins, which usually is somehow less attractive to the shops than missing out on a sale altogether. But on the other hand, the increased sales volume should score them a better wholesale deal, so they can still make a decent profit .

 

[Offline]

Hi Booz,

It is a very complicated question you ask.

Firstly does the bulk buy increase some other purchase from LHBS? Lets say you buy a march pump via a bulk buy and you love it so much you now brew more beer more often with other products purchased through your LHBS. (Does this cover loss of sale of original pump?)

On the other hand I know my LHBS (gday Mark and Ben from MHB) says that there is very little money in AG supplies. Yet they do a great job in fabricating any thing you could imagine for your brewery. (Assuming most bulk buys are AG related)

Or how many people have you referred to your LHBS for supplies and advice after they have tasted your produce?

You cant lump all HBS together and you cant lump all Bulk Buys together.

Im sure some bulk buys are hurting some LHBS while other bulk buys are beneficial to some LHBS.

Though I am yet to participate in one of these bulk buys, due to not needing what is on offer (possibly at that time), I have no moral objection to them. I normally ask my LHBS first and if they think that its not worth their while stocking a product that will tell me who does stock it. May be Im just spoiled.

Offy

 

[Smashin]

To put another spin on it...

Does brew supply shops with high volume turn over offering fresh products expanding into mail order in a highly efficient manner hurt LHB shops.

Good on 'em. The quality is great, the service is fast,

I, like many others buy all of my HB supplies this way and spread across all the major HB stores offering mail order.

In this same manner bulk buys are just part of free trade.

I doubt that the a few bulk buys are really going to make the difference between the LHBS surviving. As someone said before if the LHBS are that concerned then they should get proactive and arrange the bulk buys themselves (and pass on the savings).

Boycott those (big or small) that oppose bulk buys!!!!

:unsure:

 

[Barry]

Some brew shops will order the grain for a bulk buy. Usually by the bag (you divide it), at discount prices. Sometimes the prices look good from the supplier but then you add on transport and often the homebrew shop can do you the same deal with less time and worry. Of course it depends on the shop.

 

[daemon]

The biggest threat to LHBS's is bad customer service. I don't deal with my LHBS because of this.

In regards to bulk buys, I really can't see how it can make a difference. If they were so reliant on just your business or missing out on a sale every now and then they need to look at their business strategy.

I'll buy from whoever can give me good service and good quality at reasonable prices, it's as simple as that.

 

[Bribie G]

I haven't participated in a bulk buy yet but I am nowhere near a LHBS that does yeasts, hops and grains at even a reasonable price. Despite the fact that we are in the Brisbane Phone book here I'm a 70k round trip from any store that will sell me a kilo of grain malt and will gladly do so for $9 a kilo

So I order all my AG supplies from a Sponsor and get great savings and it all comes to me at far less freight than my petrol. However on the Island we have a basic LHBS and I also spend a fair bit there on dex, Morgans or Coopers cans for my partials and a couple of new fermenter sets in the last month.

So in this neck of the woods, which also includes most of Moreton Bay Region, the question is really "does patronizing the sponsors and other online stores hurt LHBSs" and for me the answer would be "In principle no, they complement each other, but by my moving to mostly AG rather than brewing kit n kilo they are getting less money from me".

I would hazard a guess that for every AG brewer in this region there would be many many KnK brewers quite happy with their LHBS. Of course the other half of the equation is the hundreds of people distilling water and floral essences B) B)

 

[Jazman]

what bulk buys dont see many of them like the old days they been tied by hbs as they complained to the wholesaler and thats the end of that...

 

[KingPython]

Bulk buys are usually for grain and more 'special' equipment. I gather most LHBS make their moeny off kits rather than anything else.

 

[Pumpy]

[quote name='The Ol' Boozeroony' post='444246' date='Apr 11 2009, 02:29 PM']Hi all,

Just wanted to throw the question out there, "Are bulk buys hurting LHBS's". I'm lucky enough to have my raw ingredients "sponsored" to a certain extent but I still buy 99% of my gear from the LHBS. Even though I could potentially get stuff for cheaper via a bulk buy, I'm happy to pay for the experience of supporting the local scene. Any thoughts are welcome.

Booz[/quote]

I drop in a brew shop on The Merrylands road Sydney and the lady owner has a nice new white Mercedes and the boss has a nice sporty Commadore Ute

Things cant be all bad .

If people can get the base malt cheaper they buy more of the special grains from thier local brew shop and they have a higher mark up on those grains

Plus our club gets most of the bulk buys via the LHBS anyway

Pumpy

 

[Jakechan]

Guess it depends if your LHBS has what/all you need?? From my point of view and doing AG, my LHBS can only supply me with some Saf yeast(maybe out of date liquid), some keg fittings, glasses, some dry/liquid malt and thats about it, when I said to him about a Grain Bulk Buy, he told me to see him to organise it as he would be able to get it cheaper than Ross..

He doesnt even Grain brew and had this one random sack of grain(JW Pils) he tried to sell me for $70, dont even know how old it was..

Bulk buys seem good for some things, not others by the look of it.. :unsure:

:icon_cheers: CB

Sounds like you shop in Gladstone....

 

[Pollux]

My theory is that if a LHBS supported and participated in a bulk buy, selling the grain at a much lower margin, there is a good chance they could increase their sales in other areas like hops and yeast.....

In reality, a decent sized bulk buy (say 50 people each buying 3 sacks of grain each), let the LHBS make a markup of $2 per sack, there's $300 gross profit plus the benefit of having 50 people standing in their shop, 50 brewers at that, people who are notorious for having accumulation disorders....

I'd happily bet that at least 25 of those 50 people would purchase something else while in the store, and the retailer gets the goodwill within the community for free....

Just my 2c+Markup+GST.

 

[Frank]

Just my 2c+Markup+GST.

Don't forget to add freight to your 2c, or is that for pick up only?

 

[flattop]

Agreed, LHBS probably need to be in on the bulk buys, yes the margin is small but as Pollux says if these ppl come into the store then they will maybe pick up some yeast or dex or some other thing, that is if they come into the store.... If the bulk buy is delivered or off site pickup there is probably little in it for them.
What we don't want is the bulk buys driving the LHBS out of business. The nearest store to me in Metro Melb is about a 50min round trip drive.
I have another slightly more distant in the opposite direction, but i don't "pass by" either in my daily travels, i would hate to see either fold.
I don't think either of those owners are driving flashy cars, if the industry was so strong i expect there would be one on every street corner.
Sure i don't think they are doing a bad trade either.
The point is that the odd bulk buy is probably inconsequential, but a lot of them would have to affect trade.

That said, i still support the concept of bulk buys because free trade has to be "free".

 

[Pollux]

Don't forget to add freight to your 2c, or is that for pick up only?

No freight, pickup only I want you to come into the shop and buy other items at the same time....If you don't I will name you on here and you will be shamed, possibly flogged in public to teach others a lesson....


mmmm, I think I have just hit on why it is I am not small business owner...

 

[Trent]

My theory is that if a LHBS supported and participated in a bulk buy, selling the grain at a much lower margin, there is a good chance they could increase their sales in other areas like hops and yeast.....

In reality, a decent sized bulk buy (say 50 people each buying 3 sacks of grain each), let the LHBS make a markup of $2 per sack, there's $300 gross profit plus the benefit of having 50 people standing in their shop, 50 brewers at that, people who are notorious for having accumulation disorders....

I'd happily bet that at least 25 of those 50 people would purchase something else while in the store, and the retailer gets the goodwill within the community for free....

Just my 2c+Markup+GST.

Pardon me for playing the devils advocate here, but most bulk grain buys I have seen are usually in the vicinity of 1 tonne (40 sacks x 25kg) and alot of people are wanting to split bags, etc... There are very few people who will buy 3 sacks at a time, and use that amount of grain in a resoanble time frame, IMO. I mean, hell, I brew weekly usually, and brewing single batches, it would take you 6 weeks to get through a sack. So that is going to last over 4 months/18 weeks - all to save about $3-5 a batch. In theory, your maths are correct, but in reality, you are not going to find 50 brewers within the same area that are all going to be willing to buy more than one sack each (if you can even find 50 grain brewers in the same area). More realistic is the LHBS will sell 40 sacks of grain, at $2 per sack profit, and knowing brewers like I do, they will also want discounts on hops and yeast because they are giving said LHBS "business" by buying the grain through him. Last time I looked, running a shop wasnt free - so I can understand why *some* LHBS refuse to be part of bulk buys. (FWIW my LHBS has no qualms ordering in grain by the ton for us if necessary)
I get very good prices on my grain, so am fortunate not to have to go into bulk buys, and I like the option of only having to buy what I need. I dont know if bulk buys are hurting LHBS overall, as I thikn the most of their custom comes from distillers and K+K'ers, but my LHBS (200km away) supports me and a very strong brewing scene, so I feel like supporting him in return. And getting floor malted TF Maris Otter at around $3/kg odd by the bag, I have every reason to keep on supporting
Though I get why some people will prefer to do bulk buys, of course...
T.
EDIT - Typo

 

[Pollux]

Trent, you make very valid points there....

While I personally would be happy to purchase 3 sacks at a bulk buy (hell, it's a bulk buy FFS) I can see how others would not be....

I honestly think it's up to the retailers to realise that in this age, they need to find ways to lower overheads to allow for being undercut by online retailers, while consumers need to be able to recognise that they may be paying more per kilo in return for being able to seek advice while instore...


Really, I wish a LHBS would survive in the inner west of sydney, if i could get one within walking distance (i.e. 1km, I can walk that far with a sack of grain on each shoulder) and reasonable prices, I would happily shop there on a regular basis....

 

[TidalPete]

I admit that I have just skimmed through the above posts but do you want an honest opinion here?

WHO CARES?

All retailers (And wholesalers) go into business with their eyes wide open & can hardly complain if their prices are undercut one way or another.

As a consumer I want to obtain my goods for the cheapest price possible & put the welfare of myself & my family before the welfare of anyone be it retailers or wholesalers. If I am able to obtain certain goods at a price that is good for me then that's business.

MY BIGGEST WHINGE IS WHEN CERTAIN SELLERS COLLUDE ARRANGE WITH WHOLESALERS TO PREVENT BULK BUYS FROM FORUMS SUCH AS AHB FROM EVER HAPPENING.

TP

 

[Online Brewing Supplies]

I admit that I have just skimmed through the above posts but do you want an honest opinion here?

WHO CARES?

All retailers (And wholesalers) go into business with their eyes wide open & can hardly complain if their prices are undercut one way or another.

As a consumer I want to obtain my goods for the cheapest price possible & put the welfare of myself & my family before the welfare of anyone be it retailers or wholesalers. If I am able to obtain certain goods at a price that is good for me then that's business.

MY BIGGEST WHINGE IS WHEN CERTAIN SELLERS COLLUDE ARRANGE WITH WHOLESALERS TO PREVENT BULK BUYS FROM FORUMS SUCH AS AHB FROM EVER HAPPENING.

TP

I havent even seen sellers talk/agree let alone collude, but I am in WA.
GB