LibDib's Pricing Model includes a consistent 14% markup in all markets. Here's how it works.
LibDibbing is easy. This guide shares the nitty gritty on how to set pricing.
LibDib’s pricing model is just another example of how to think outside of the distribution box. Our pricing is different from most distributors and we recently improved our model to make it easier for Makers to set a Buyer price. The cost of doing business on LibDib is now clear and consistent in all markets - LibDib earns 14% markup on the Net Sales Cost.
Our pricing is the same approach in ALL markets. As LibDib expanded, the differing tax rates actually made our previous approach to pricing not work as well. Our new pricing makes it easy to set prices that work for everyone. That’s LibDib’s commitment to transparency!
Key Pricing Terms
Before we start pricing, let’s set the stage with some key LibDib pricing terms:
- The Buyer Price: This is the wholesale price that restaurants, bars and retailers pay LibDib. This is the price a Maker enters.
- Maker Price: This is the amount LibDib pays the Maker and is automatically generated from the Buyer Price, by market. Makers also need to calculate the cost of LibShip to cover the cost of the initial shipment. Makers should keep in mind that LibShip is a transaction that is billed back seperately, which is why Makers need to understand and account for this cost when determining what you want LibDib to pay for your products in each market.
- Taxes: LibDib calculates the tax based on product type, gallonage and ABV. This varies by market including who pays the taxes in each state. Typically it’s LibDib but in some cases (like WI) it falls on the Makers.
- Dock & Delivery: Some states have an “at rest” regulation (i.e. state law) that requires all products to “come to rest” or “hit a dock” at a LibDib licensed warehouse before being delivered to the Buyer. When an “at rest” requirement exists, there are two legs to shipping: 1st Leg - Maker delivers to a LibDib warehouse via LibShip where it “hits the dock” and “rests”; 2nd Leg - LibDib delivers to the account.
- Net Sales Cost: This includes The Maker Price + Taxes and LibDib’s Markup LibDib earns a 14% markup of the Net Sales cost.
- Here’s an example:
- A Maker wants a Buyer to purchase their product for $240.00 per case, so they input $240.00 as the Buyer Price.
- A dock and delivery fee of $8 is deducted from this price because the case must come to rest at a warehouse in this market per state regulations.
- LibDib reverse calculates a 14% markup after taxes (for this example, we will say that it’s a 40 proof 6 pack into California = tax rate of $3.92).
- LibDib makes $28.49 (14% of Maker price + taxes).
- Maker will be paid $199.59.
- Here’s an example:
|Dock & Delivery Fee||- $8.00|
|California Taxes||- 3.92|
|LibDib 14% Markup||-28.49|
|Maker is Paid||-199.59|
How to Price
First! If you haven’t added your product info to LibDib, go back and do that. The LibDib Brand Page Guide gives you guidelines on how to do it. You cannot get to pricing without entering the products first.
- Login to your LibDib account, click on the “Markets” tab.
- Choose the Market (state) from the list on the left sidebar.
- Click “Offerings.” Find the offering you want to price and click the orange text under it that says: “Show panel to Enter, Edit and Submit State Details.”
- Input the availability, quantity and shipping origin.
- Enter the Buyer price - In LibDib’s new pricing model, Makers will enter the Buyer Price.
*For those of you who have been around for a while:
1) Thank you!, and
2) Yes, this is flip flopped and different from how it worked before. Entering the Buyer Price will allow Makers to easily target a Suggested Retail Price (SRP).
Once the Buyer Price has been entered, LibDib calculates the Maker price based on the taxes and Net Sales cost, LibDib’s 14% Markup, and any relevant dock and delivery fees. Makers can also click on for specific information for that offering:
Once satisfied, Makers click submit for approval.
Remember: Compliance varies by state, so offerings may become ‘live’ at different times. Visit the How to Go Live in Each Market page for more details.
*New York price changes: In New York, due to price posting, once a priced offering is approved by LibDib, the price cannot be immediately changed. Email firstname.lastname@example.org for price changes.
That’s pricing reimagined. Still have questions? Reach out to us at Makers@libdib.com.