{"id":9730,"date":"2022-11-02T07:37:36","date_gmt":"2022-11-02T11:37:36","guid":{"rendered":"https:\/\/craftbreweryfinance.com\/oldversion\/?p=9730"},"modified":"2022-11-08T13:25:23","modified_gmt":"2022-11-08T18:25:23","slug":"can-you-explain-fob-laid-in-cost-and-front-line-pricing","status":"publish","type":"post","link":"https:\/\/craftbreweryfinance.com\/oldversion\/can-you-explain-fob-laid-in-cost-and-front-line-pricing\/","title":{"rendered":"What is FOB, Laid In Cost, and Front Line Pricing?"},"content":{"rendered":"<p>I recently had a conversation with Julie Rhodes from <a href=\"https:\/\/www.notyourhobbymarketing.com\/\" target=\"_blank\" rel=\"noopener\">Not Your Hobby Marketing<\/a> about pricing, costing, margins, freight and the impact of inflation on the beer business.<\/p>\n<p>Below are Julie&#8217;s questions and my best attempt at providing answers.<\/p>\n<p><em>Q: Can you explain FOB, Laid In Cost, Front Line Pricing?<\/em><\/p>\n<ul>\n<li>These are terms used to describe the different cost components<\/li>\n<li>FOB, free on board, refers to the cost of the product itself, the beer<\/li>\n<li>Laid-in cost, includes the total price of the beer (FOB), plus freight and beer taxes<\/li>\n<li>Front line pricing, is kind of like the MSRP on a car, this is the price before any discounts<\/li>\n<li>Often wholesalers will sell product on deal, where allowed. Quantity discounts, or a set amount off per case, for example. The discount may be shared between the wholesaler and supplier\/brewery<\/li>\n<\/ul>\n<p><em>Q: What should go into your COGS?<\/em><\/p>\n<ul>\n<li>Brewery COGs are all the costs associated with the production and packaging of your beer<\/li>\n<li>Wholesaler COGS are all the costs associated with getting the beer into the warehouse<\/li>\n<li>This includes FOB, freight, taxes (state alcohol taxes)<\/li>\n<li>Sometimes there is a duty in there, for imported products<\/li>\n<li>Some wholesalers will include a bottle deposit<\/li>\n<li>Some wholesalers will include a cents per case marketing fee that is tied specifically to sales volume, say X cents per case<\/li>\n<\/ul>\n<p><em>Q: Who pays and when does freight cost come into play?<\/em><\/p>\n<ul>\n<li>Wholesaler usually pays freight<\/li>\n<li>Wholesaler usually coordinates shipping and logistics, though not always<\/li>\n<li>Depending on how the shipment happens, straight loads, a full tractor trailer, aggregated loads, shared, where a trailer will pick up product \/ pallets from multiple breweries<\/li>\n<li>Some breweries include freight in the FOB cost<\/li>\n<\/ul>\n<p><em>Q: How has inflation impacted pricing this year and beyond?<\/em><\/p>\n<ul>\n<li>How hasn&#8217;t it impacted price!<\/li>\n<li>Good article <a href=\"https:\/\/www.goodbeerhunting.com\/sightlines\/2022\/7\/14\/craft-beer-looks-to-inflation-and-competition-for-permission-to-raise-prices\" target=\"_blank\" rel=\"noopener\">here<\/a> that provides data points on pricing<\/li>\n<\/ul>\n<p><strong>Thanks for reading!\u00a0 If you found this information useful, there&#8217;s lots more where that came from. Check out the <a href=\"https:\/\/www.karysfinancialtraining.com\/sales-page-1-cbfa9c9b-bbc9-437f-a164-144cf8473e9d\" target=\"_blank\" rel=\"noopener\">Craft Brewery Financial Training membership<\/a>. You&#8217;ll get instant access to a library of brewery financial training courses, guides and resources.\u00a0<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>I recently had a conversation with Julie Rhodes from Not Your Hobby Marketing about pricing, costing, margins, freight and the impact of inflation on the beer business. Below are Julie&#8217;s questions and my best attempt at providing answers. Q: Can you explain FOB, Laid In Cost, Front Line Pricing? These are terms used to describe [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":9731,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"pgc_meta":"","_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"footnotes":""},"categories":[63],"tags":[],"class_list":["post-9730","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial"],"_links":{"self":[{"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/posts\/9730"}],"collection":[{"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/comments?post=9730"}],"version-history":[{"count":0,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/posts\/9730\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/media\/9731"}],"wp:attachment":[{"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/media?parent=9730"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/categories?post=9730"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/tags?post=9730"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}