[brontotex]

Carlsbad New Mexico needs one(all of New Mexico needs one) but I don't think the 3 homebrewers here could support you.

A long drive for you. But, we have a great one in Albuquerque.

Victor's?  It's not bad but not a really great one IMHO.

No, there's a new one. Southwest Grape & Grain

[oscarvan]

And, that little dissertation does not mention the internet. The get a part of those $150.....

As an aside.....$150 a year? Heck, I spend that a month........in a quiet month!

[Tim McManus]

And, that little dissertation does not mention the internet. The get a part of those $150.....

As an aside.....$150 a year? Heck, I spend that a month........in a quiet month!

No, it doesn't mention the Internet, but if you were to do both at the same time you'd have to account for the additional overhead.  You'd have to buy packaging materials (boxes, peanuts, etc.) and have extra space to keep that stuff.  You'd also have the costs of hosting the site, building the site, and maintaining the site.  Although I haven't done a complete analysis of it, there is a concern that the extra costs required to get a few extra dollars might not be worth it.

[corkybstewart]

Carlsbad New Mexico needs one(all of New Mexico needs one) but I don't think the 3 homebrewers here could support you.

A long drive for you. But, we have a great one in Albuquerque.

Victor's?  It's not bad but not a really great one IMHO.

No, there's a new one. Southwest Grape & Grain

I wish I had known, I was in Querque Monday and Tuesday.

[tomsawyer]

I don't know that those stats represent current data.  Based on the number of entries in a lot of competitions recently, I could see the number of brewers having doubled.  That'd bring the minimum population way down.  Then theres the demographic of the town/city.  Is this a drinking population or a Bible Belt population?  Also, here in northeast MO and west-central IL, the towns are shopping center for a large area and so your clientele will include the population of a lot of smaller towns.  On the subject of sales vs cost of materials, can you not double your money?  And I think I could do a little better on rent and utiities in this area.

Still, it doesn't look like a get rich scheme by any stretch.  And you're talking self-employment taxes on that 22-25K.  I could see doing it as a semi-retirement gig, where I could hang out and brew and enjoy dealing with the occasional customer.

[oscarvan]

And, that little dissertation does not mention the internet. The get a part of those $150.....

As an aside.....$150 a year? Heck, I spend that a month........in a quiet month!

No, it doesn't mention the Internet, but if you were to do both at the same time you'd have to account for the additional overhead.  You'd have to buy packaging materials (boxes, peanuts, etc.) and have extra space to keep that stuff.  You'd also have the costs of hosting the site, building the site, and maintaining the site.  Although I haven't done a complete analysis of it, there is a concern that the extra costs required to get a few extra dollars might not be worth it.

All depends on how "handy" you are in getting the site up and running. If you have to pay top dollar for a site, yes that adds up. If you can do it yourself, and it can be done relatively simple until volume justifies upgrading, you can do it fairly cheaply. Shipping is charged for and actually generates income. (The "handling" part). Ledgers will show "shipping income". In fact I think you would have to do on line sales to support the store.

[Wheat_Brewer]

I have an MBA and did some research regarding this.  The best advice I got was from the folks at the AHA.  It takes about 1,000 customers to sustain a homebrew store.  If you can find a market with that demographic, you're off to at least a somewhat profitable start.

Here is the body of a note I got from Gary Glass.  I strongly suggest that you give him a call and discuss.  I had considered opening a store in NJ and did some of the research.

+++begin


Want To Open A New Homebrew & Winemaking Shop?

Before you spend too much time on a business plan, here are a few calculations to determine if your market is likely to support a retail supply shop.

The first rule in deciding whether or not to open a homebrew supply shop is DON'T MAKE ASSUMPTIONS. The second: DO YOUR HOMEWORK. If your reason for opening a shop is "there isn't one in town and I have a lot of friends who like to brew," that may not be reason enough.

Demographics are accurate -- you may bend them, but you can't break them. The easiest demographic to find and work with is population. Experience shows it takes between 250,000 and 500,000 people to support a "stand-alone" homebrew supply shop. Here's how the numbers break down based on industry estimates.


•  There are between 500,000 and 1 million homebrewers in the United States. There are estimated to be at least 4 million home winemakers in the United States.
•  The average homebrewer spends between $100 and $150 per year on his/her hobby. (This represents an average of those who get a kit for Christmas and never brew, to those who brew every week for a while.)
•  The average home winemaker spends between $100 and $150 per year on his/her hobby.
•  It takes a minimum volume of $100,000 per year at retail to support a shop. Here's why:


Cost of goods, including freight ..... $60,000
Rent & utilities ...................................... 12,000
Promotion ............................................... 6,000
Net ......................................................... 22,000

And you haven't paid anyone a salary yet.

If you are the owner/operator, $22,000 may keep you alive, but it may not be enough to make you a happy, independent business owner. However, if you double your volume to $200,000, the net rises by $40,000 because the cost of goods is the only number that applies to the second $100,000.

What does it take to get volume to $100,000 given the above parameters? Using the most conservative numbers, you'll need 1,000 brewers and home winemakers spending $100 per year for a volume of $100,000. If there are one-half million brewers and winemakers, then one in about every 500 people in the country is a brewer or winemaker. If you need a population of 500 to get one brewer or winemaker, you need 500,000 people to get 1,000 brewers or winemakers. If you estimate that each brewer/winemaker spends $150 per year, you need a population of 333,333. If you think there are 1 million brewers/winemakers in the country, and each spends $100, you need a population of 250,000. At the most optimistic, if you estimate 1 million brewers/winemakers spend $150 per year, you would need a population base of 167,000 to make $100,000 in annual revenue.

It's our best guess that the low end of these numbers is too optimistic and the high end too pessimistic, but we are not far off. This example only brings you to $100,000 in volume. To reach the more desirable $200,000 mark, double everything. At the very best, if you'd like to open a shop and have it produce meaningful income, you'll need a good quarter million people in your potential customer base, at least in your market area, free of competition.

+++end forward

Great post. Thank you

Second that, amazing post!  I think there's a moment when we've all wondered if we could open a homebrew store.  I also heard those same numbers for a what it would take to sustain a homebrew store, but nobody ever knew why 500,000 people.  Thanks!

[kgs]

I've wondered about a side income from online sales of a useful product, particularly one that didn't involve patent work, such as homebrew kettle conversion kits. Not really interested in doing this (until I invent the Unbreakable Hydrometer), just curious about the break-even point. 

[mc2]

Add on beer tasting for extra income might help alot. Bier One in Newport, Or. is a cool place. Don't know their income, but they are still open with a town population of 10,000.

[jeffy]

Add on beer tasting for extra income might help alot. Bier One in Newport, Or. is a cool place. Don't know their income, but they are still open with a town population of 10,000.

I imagine Newport, Or is going to have an "educated" beer population since Rogue is there.  That may offset the impact of only 10K people.

[oscarvan]

And, it's not just the town..... it's the surrounding area too. Here in Bethlehem we have one, and I guess it serves at least a 100 square mile area, if not more.

[Will's Swill]

A brewing buddy of mine just moved to the vicinity of Syracuse.  He says that he has two stores in Syracuse and they both suck.  One's only open a couple days a week, and the other concentrates on hydroponic supplies. 

[tubercle]

Don't forget wine makers. Around here wine makes vs. beer brewers are probably 100/1 at least the people I know. Most of the same equipment is used; buckets, hydrometers, etc..

[The Professor]

New Jersey could use a good one.

NJ has at least four very good ones, but as one of the most densely populated states in the nation, I guess there's always room for one more.

[Jimmy K]

And, that little dissertation does not mention the internet. The get a part of those $150.....

As an aside.....$150 a year? Heck, I spend that a month........in a quiet month!

No, it doesn't mention the Internet, but if you were to do both at the same time you'd have to account for the additional overhead.  You'd have to buy packaging materials (boxes, peanuts, etc.) and have extra space to keep that stuff.  You'd also have the costs of hosting the site, building the site, and maintaining the site.  Although I haven't done a complete analysis of it, there is a concern that the extra costs required to get a few extra dollars might not be worth it.

I think oscarvan meant competition from the internet.