Retail-low Prices

[peas_and_corn]

I thought many of the yeasts that wyeast sell are developed in house and are protected by patents and the such- making 'no brand' liquid yeast a little more tricky (correct me if I'm wrong...)

 

[Online Brewing Supplies]

GB, the geezer who started this thread, made a error of using Fowl, a bird, instead of foul, when exclaiming that people where "crying fowl"

It was very funny, but you had the be there.

I getz it now, Very funny but my grandfather use to call them polltree. :lol:
GB

 

[white.grant]

I thought many of the yeasts that wyeast sell are developed in house and are protected by patents and the such- making 'no brand' liquid yeast a little more tricky (correct me if I'm wrong...)

They are certainly trademarked - at least Wyeast yeasts are, but I think with yeasts being living organisms they cannot be patented -- in the same way that cows cannot be patented. If it were GM though they could be.

 

[Paul H]

I think we need to see this for what it is................... Ross is determined to control the world market by creating a demand for yeast in the southern hemisphere thereby shifting the brewing "axis of evil" from Iran to Brisbane, specifically the PUB shop which is where the said contriband will be stored.
I forget who said it but "for evil to triumph all it takes is for good men to do nothing".

Cheers

Paul

 

[peas_and_corn]

 

[Online Brewing Supplies]

Where's the cap :lol:
GB

 

[~MikE]

i just bought $50 of stuff off him cos of the awsomness price of his wyeast (and i only got one smack pack ) even if he's selling at cost, it's an excellent customer grab.

 

[Lobsta]

I thought many of the yeasts that wyeast sell are developed in house and are protected by patents and the such- making 'no brand' liquid yeast a little more tricky (correct me if I'm wrong...)

yeah, as mentioned above, they can own the NAME of the yeast (so if somebody was to make a 'home brand' they couldnt associate it with Wyeast or with the particular number, though i reckon that they would be able to call it for example an 'american ale yeast', as that is a description).

But as the yeast are a natural product, they cant be patented. if wyeast were able to change the natural product somehow that made them unique, then they would be theirs, but im not sure that anybody would wana be pitching Genetically Modified yeast... I see this all the time at work (Pharmacy). Drug companies cannot patent natural compounds, so they take the natural compound, go into a lab, figure out some way to chemically alter it so that it is unique then they can patent it - thus all the problems with synthetic hormone replacement therapy. the hormones are altered (usually methlated or the such), and the altered ones work ALMOST the same in the body as the natural ones, but not quite, and thus all the side effects as opposed to the natural hormones (which my pharmacy, a compounding pharmacy specialises in), which can not be patented, so anybody with a $400000+ compounding lab could make and sell, as all they are really doing is obtaining and repackaging a natural prodct.

wow, what a rant...

Lobby

 

[Back Yard Brewer]

i just bought $50 of stuff off him cos of the awsomness price of his wyeast (and i only got one smack pack ) even if he's selling at cost, it's an excellent customer grab.

Exactly what my first post was partly about. the world is catching on

To me its about sustaining your market share. Who's been to a supermarket bought a bargain and then said "**** I might as well get that as well" I know I have.

 

[peas_and_corn]

Yeah, but appreciated by at least me. Cheers, that makes sense

 

[white.grant]

I believe that type of marketing is referred to as a "loss leader" which is different to selling things at a keen price and still maintaining your margin.

I think someone (Cortez?) already noted that Wyeast activators sell for $5.75 in the US, and given the strong AUD our prices really should be getting back close to that (plus shipping of course).

cheers

Grant

 

[kook]

Hmmm, a quick MA:

Maybe 1500Ag brewers in OZ, maybe 70% using liquid yeast, maybe 30% not yeast banking and using first gen yeast. Say a round 1000 AG brewers and maybe 1000 kit brewers using liquid yeast making on average 15 beers each per year with first gen liquid yeast. So sales of 40,000 units at 100% market share at retail $9.00 per unit = total sales AUD270,000


Assumptions: Market share 20%

Gross Sales: AUD54,000

Direct Expenses:
COS: Raw Materials 10%
Other: 10%

Gross trading profit AUD43,200

Operating Expenses:
Total ex marketing 38%
Marketing 10%

Nett Before Tax Operating Profit AUD17,280

Add back interest costs etc, less borrowing costs, lets say a nice income of $20,000 noice :lol:


Not viable as a stand alone business, would be a long journet to BE point.

Are you keeping in mind the micros that purchase from Wyeast / Whitelabs? They may repitch to get as much out of their purchase as possible, but they're buying large pitchable quantities. I'm sure a local competitor could gain their business rather quickly if the price was lower.

Still probably not enough demand in Australia yet - but if they were to export to SE Asia, and produce yeast for some of the "mid tier" brewers it could be viable (excluding the startup costs from the equation).

 

[T.D.]

I believe that type of marketing is referred to as a "loss leader" which is different to selling things at a keen price and still maintaining your margin.

I think someone (Cortez?) already noted that Wyeast activators sell for $5.75 in the US, and given the strong AUD our prices really should be getting back close to that (plus shipping of course).

cheers

Grant

Its partly loss leader and partly market penetration pricing. Set prices low initially for a new product, gain a bunch of market share and then slowly increase prices. Its a very common marketing technique.

 

[Julez]

I believe that type of marketing is referred to as a "loss leader" which is different to selling things at a keen price and still maintaining your margin.

I think someone (Cortez?) already noted that Wyeast activators sell for $5.75 in the US, and given the strong AUD our prices really should be getting back close to that (plus shipping of course).

cheers

Grant

They do, see http://www.northernbrewer.com/wyeast.html

I work for a an importer/distributor in the IT industry, yet I can buy some items from the US on a single-buy, retail basis, cheaper than my own company can buy the same items at the best possible wholesale prices in bulk and direct from the overseas manufacturer! And that even takes into account the US retail price + customs duty + GST + shipping. A number of people do circumvent Australian distribution channels and buy goods in this way - it's called "parrallel importing".

One thing that's important to note, is that that the US and Australia are two totally different markets. Unfortunately, a direct price comparison is not possible. Each economy has its own tax system and economies of scale due to differences in domestic consumption. Equally, some goods are cheaper in AUS, when compared to the US.

So don't assume that US prices are remotely indicative of what we should be paying here!

 

[Julez]

Its partly loss leader and partly market penetration pricing. Set prices low initially for a new product, gain a bunch of market share and then slowly increase prices. Its a very common marketing technique.

Sometimes people also just sell particular lines as a value-add. E.g. not set out to necessarily make a profit on particular lines, or even to gain further market share, but to add convenience and become a one-stop shop. For me, liquid yeast was the one thing I had to go elsewhere for, now I can buy everything from the one place and pay one lot of freight. Bewdy B)

Irrespective, still not sure why we are talking about business principles here. We all have the right to choose, and I choose snappy prices and convenience

 

[SJW]

Ross is a big boy and he can and will sell his products, be it yeast, grain or anything else at any price he wants to. We as the customers have to final choice in who we buy from. Its up to us as the customer to decide where the future of retails homebrew supplies lies. If everyone brushed their local HB Shop and bought from an on-line retailer I would guess that out local HBS would disappear. Or on the other hand maybe our local HBS's need to get more competitive with the on-liners. Stuffed if I know (que a retailer).
I think that we on this forum need to take a reality check and realise that in the world of brewing the couple hundred AG brewers (if that) on this site are about the equivalent to a pimple on the ass of a gnat when it comes to influencing world supply and demand. I think even Ross would agree that we should support our local HBS's (at least he has said that to me) and I think the Home Brew world would be worse off without them. Where else would I go to kill an hour or so during work time?
So I dont know what the answer is, just keep it in perspective and make hay while the sun shines.

Steve

 

[smudge]

One thing that's important to note, is that that the US and Australia are two totally different markets. Unfortunately, a direct price comparison is not possible.

Julez,

Different markets yes. "direct price comparison is not possible" - no. The price into my letterbox is the ultimate price comparison.

The reasons for the difference in price may be complex but the price is the price.

Though, as I've said before, best price is not necessarily the best deal.

And Lobsta,

If ever there was a more protected business in Australia than pharmacy, I haven't seen it. I'm still trying to work out whether
Safeway's ethical lines or groceries will be their loss leader.

Cheers,
smudge

 

[Ducatiboy stu]

I do vaguely remember a converstaion with Ross ages ago when he was just starting his hop selling business.

He commented on the fact that "other" home brew shops where trying to shut him out of the market, by using various legal ( bot not ethical ) means

Obviously it worked.......Ross has gone from strength to strength by providing a service that suits us....not himself..

Its a free market....

 

[braufrau]

Isn't the way to undermine the Ross/Wyeast axis of yeasty-beasties to go open source??

Everyone, in the public interest, should be making slants and sending them thither and yon.

We could have a yeast slant registry and people could pick up in their own city or send the owner
some chilling thingy and a bag and postage for the yeast to be sent to them.

 

[Ducatiboy stu]

Isn't the way to undermine the Ross/Wyeast axis of yeasty-beasties to go open source??

Everyone, in the public interest, should be making slants and sending them thither and yon.

We could have a yeast slant registry and people could pick up in their own city or send the owner
some chilling thingy and a bag and postage for the yeast to be sent to them.

Please dont tell Mr Gates that I use Linux....I might upset the whole Axis of everything...

And dont mention yeast farms....they will all go broke...