Author Topic: How profitable can a Homebrew Store be?  (Read 14290 times)

Offline garciarb

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How profitable can a Homebrew Store be?
« on: August 09, 2010, 12:16:50 PM »
I'm currently debating the idea of opening up a hombrew store and was wondering how profitable are they or how profitable they can be? Currently where im at located in TX there is one great homebrew store but its way North of town, I beleive the city is growing fast and continues to expand to where the South of the city could have its own brewstore. I'm also thinking of possibly having a nice beer bar with a decent selection on tab to where you can come hang out have a brew and buy what you need to make beer, nice combo but got to see if that flys with TABC. So I got a few ideas just wondering if this is the way to go? Ive read there isnt much to be made in this section of the beer industry?

Offline micsager

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Re: How profitable can a Homebrew Store be?
« Reply #1 on: August 09, 2010, 01:25:16 PM »
I'm currently debating the idea of opening up a hombrew store and was wondering how profitable are they or how profitable they can be? Currently where im at located in TX there is one great homebrew store but its way North of town, I beleive the city is growing fast and continues to expand to where the South of the city could have its own brewstore. I'm also thinking of possibly having a nice beer bar with a decent selection on tab to where you can come hang out have a brew and buy what you need to make beer, nice combo but got to see if that flys with TABC. So I got a few ideas just wondering if this is the way to go? Ive read there isnt much to be made in this section of the beer industry?

Depending on the market, my guess is it's a tough gig.  Of the three stores I go to, the ownwer is working behind the counter.  I've also heard that if you don't also sell wine stuff, your chances of success drop significantly.  The beer bar is a good idea, that can be profitable on it's own.  Then slowly ramp up the home brew stuff. 


But get more advice.  I really have no clue

Offline Thirsty_Monk

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Re: How profitable can a Homebrew Store be?
« Reply #2 on: August 09, 2010, 08:26:50 PM »
I heard that you need to have at least 100,000+ population to support one brew shop.
Unless you are doing something creative on side like bear bar.

I also think that you have to be involved in local homebrew clubs and you need to promote homebrewing wherever you can.
If you are going to have kits, please make your own kits and do not carry "Brewers Best".

Good luck to you
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Offline euge

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Re: How profitable can a Homebrew Store be?
« Reply #3 on: August 09, 2010, 10:56:25 PM »
My LHBS here in SA also serves beer. Not his own mind you but the place is an old bar in a bar-district. He didn't have any competition until lately, and I've never been to those stores.

I remember him screaming one time that the shipping company was going to put him out of business when the delivery was days late- the place was practically empty of everything! That was a few years back. He always has people in there drinking beer on tap. I bet he does OK. He has a cherry schedule: open Tues-Sat 11-7pm and only his wife to help.
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Offline IHBHS

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Re: How profitable can a Homebrew Store be?
« Reply #4 on: August 10, 2010, 01:24:53 AM »
We are part of the brewery, Ice Harbor Brewing, but with our increase in sales recently, I think we could make a go at being an independent store.  We are of course the only brew shop in an area of 150k but I would also make a bet at saying we are about the most well stocked HBS on the east side of WA.  That I think is the key.  We carry just about everything from all your sepc grains to a wide selection of whole and pellet hops yeasts by White Labs, propane burners and pots by Bayou Classic, reconditioned Corny kegs, to a wide variety of wine supplies.  If you cater to the customer and provide what they need then you will have an easier time being successful.  I also like your idea of a small bar, and Thirsy_Monks idea of hosting a LHBC. 

@Thirsty_Monk, what's wrong with Brewers Best kits from LD Carlson.  I sell the heck out of those things.  The 1002BB fly off my shelves, I have to order like 36 of them at a time.
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Offline majorvices

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Re: How profitable can a Homebrew Store be?
« Reply #5 on: August 10, 2010, 05:12:42 AM »
The bar thing is a good idea, but remember you are going to have to pay for a liq. lic. Definitely think about teaming it up awith another related business. There's a homebrew shop in Nashville, TN that is a Garden/Homebrew shop. Their HB shop only takes up about 1/4 of the store but there are always homebrewers in there buying stuff and it is a well supplied store.

Good luck to you!

Offline beerocd

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Re: How profitable can a Homebrew Store be?
« Reply #6 on: August 10, 2010, 07:53:38 AM »
The bar thing is a good idea, but remember you are going to have to pay for a liq. lic. Definitely think about teaming it up awith another related business. There's a homebrew shop in Nashville, TN that is a Garden/Homebrew shop. Their HB shop only takes up about 1/4 of the store but there are always homebrewers in there buying stuff and it is a well supplied store.

Good luck to you!

Shouldn't garden be in quotes?  ::)
There is a successful guy here in Chicagoland running the same type of operation. They are up to 5 good sized locations now. http://www.altgarden.com/store/cart.php?m=content&page=19
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Offline glitterbug

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Re: How profitable can a Homebrew Store be?
« Reply #7 on: August 10, 2010, 08:35:29 AM »
You can use Porter's "five forces model". It is designed to help determine the average profitability and sustainability of a business within a market. It is one of many tools.

1. The threat of new entrants
High. Low if you go the bar + homebrew route. Many people probably bail on the idea when thinking of dealing with tabc :)

2. Rivalry of existing firms
High. You are in competition with awesome webstores and established brick mortar shops.

3. The threat of substitutes
High. The internet is a powerful business tool and larger online shops may be able to out price you

4. The bargaining power of customers
High. Again, the internet and the other shop in town

5. The bargaining power of suppliers
High. You will probably not be buying in bulk and may not be able to price your wares competitively.

(not looking good  :'( )

I think homebrew shop + bottle shop\bar is a good idea. It gives you a way to increase your revenue and another reason to get people to come to your shops. See Dr Jekylls in Arlington :)
A witty saying proves nothing - Voltaire

Offline BrewingRover

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Re: How profitable can a Homebrew Store be?
« Reply #8 on: August 10, 2010, 10:33:48 AM »
The bar thing is a good idea, but remember you are going to have to pay for a liq. lic. Definitely think about teaming it up awith another related business. There's a homebrew shop in Nashville, TN that is a Garden/Homebrew shop. Their HB shop only takes up about 1/4 of the store but there are always homebrewers in there buying stuff and it is a well supplied store.

Good luck to you!

Shouldn't garden be in quotes?  ::)
There is a successful guy here in Chicagoland running the same type of operation. They are up to 5 good sized locations now. http://www.altgarden.com/store/cart.php?m=content&page=19

I figure I'm under surveillance by somebody whenever I visit one of their places.  ::)
It's such a fine line between stupid and clever.

Offline euge

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Re: How profitable can a Homebrew Store be?
« Reply #9 on: August 10, 2010, 11:14:56 AM »

Quote


There is a successful guy here in Chicagoland running the same type of operation. They are up to 5 good sized locations now. http://www.altgarden.com/store/cart.php?m=content&page=19

I figure I'm under surveillance by somebody whenever I visit one of their places.  ::)


Homebrew and Hydro! That's gonna be a favorite combination for quite a few folks. No wonder they're doing so well! ;)
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Offline kylekohlmorgen

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Re: How profitable can a Homebrew Store be?
« Reply #10 on: August 10, 2010, 01:53:54 PM »
You can use Porter's "five forces model". It is designed to help determine the average profitability and sustainability of a business within a market. It is one of many tools.

1. The threat of new entrants
High. Low if you go the bar + homebrew route. Many people probably bail on the idea when thinking of dealing with tabc :)

2. Rivalry of existing firms
High. You are in competition with awesome webstores and established brick mortar shops.

3. The threat of substitutes
High. The internet is a powerful business tool and larger online shops may be able to out price you

4. The bargaining power of customers
High. Again, the internet and the other shop in town

5. The bargaining power of suppliers
High. You will probably not be buying in bulk and may not be able to price your wares competitively.

(not looking good  :'( )

I think homebrew shop + bottle shop\bar is a good idea. It gives you a way to increase your revenue and another reason to get people to come to your shops. See Dr Jekylls in Arlington :)

I wouldn't use this model to compare a LHBS to the internet. Its like comparing a farmer's market to a national grocery chain.

I could definitely save a lot of money by ordering brewing supplies from the internet, but my brewing experience would not be nearly as fulfilling and a LOT more frustrating. You offer many services the internet cannot:

1. One-on-One troubleshooting - even faster than forums and more specialized.

2. Technical expertise - when you buy a new piece of equipment from a LHBS, they can show you how to use it... no sheet of instructions sent.

3. Instant gratification - I buy my supplies on brewday. If I forget something (gypsum, irish moss, pH strips, rice hulls, etc.) I can run and get it. Internet = nada on this one

4. Social interaction - our LHBS has homebrew kits to sample on tap, and its a great place to hang out. They also have classes (kit/all-grain brewing, winemaking, etc.), host the Big Brew, and help put on our annual state homebrew competition.

I apologize for slamming on internet brew shops - I think they are a great resource and would utilize one if I didn't have a LHBS in my area. I just really wanted to convey that the internet shouldn't scare you away from starting such a great business!

Good luck to you!

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Offline Thirsty_Monk

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Re: How profitable can a Homebrew Store be?
« Reply #11 on: August 10, 2010, 05:24:35 PM »
@Thirsty_Monk, what's wrong with Brewers Best kits from LD Carlson.  I sell the heck out of those things.  The 1002BB fly off my shelves, I have to order like 36 of them at a time.

Just my own opinion.
More Beer, Northern Brewer or my LHBS are providing their own kits.
You get better margin and you stand out from the crowd.
Na Zdravie

On Tap At The TapRoom:
Bohemian Pilsner
Bohemian Dark Lager
Smoked Bock
MaiBock
American Brown Ale
Marzen
Root beer

Offline garciarb

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Re: How profitable can a Homebrew Store be?
« Reply #12 on: August 11, 2010, 07:53:51 AM »
Seems like the beer bar or lounge inside the brewstore is a plus, as for the Internet im sure I'll eventually set something up but it wont be my main focus at first. My focus would be to attract customers into the store, get new folks to try it out this awsome hobby and have fun brewing, Ill do this by providing beer classes, beer tasting events, wine making sessions as well as cheese making. I would definately carry the best and stock up with the best out there for homebrewers and wine makers and for sure hire knowledgable staff. I want customers to come visit to feel like the store is there new hangout spot to chat and have a beer as well as get there beer and wine ingredients. If anyone knows of good beer store with beer lounge or beer bar in it please let me know. Thanks for all the replys!

Offline glitterbug

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Re: How profitable can a Homebrew Store be?
« Reply #13 on: August 11, 2010, 10:04:03 AM »
If anyone knows of good beer store with beer lounge or beer bar in it please let me know. Thanks for all the replys!

Dr Jeckylls in Arlington sells beer and homebrew stuff
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Offline garciarb

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Re: How profitable can a Homebrew Store be?
« Reply #14 on: August 11, 2010, 01:44:46 PM »
Anyone knows of good wholesale suppliers for Brew and Wine making stores that might handle Texas?