Question 1

20% gross margins seem low for the industry. Is that primarily due to higher costs or a lower ASP? What are you doing to increase your margins? Thanks!

Accepted Answer

Thanks for the question, Craig. This is due to higher costs, which this investment will help us reduce. Our 20% gross margin is a combination of our gross margins for Amazon and for wholesale. Our Amazon gross margins are around 7%, meanwhile our wholesale margins are around 44%. We also include our Amazon advertising and production labor costs in our COGS, unlike some companies. There are a number of ways we plan to reduce our costs using this investment- 1) hiring sales staff will...

Question 2

How do you plan on getting more distillery customers?

Accepted Answer

Right now, our conversion on distillery customers is about 65% (we define this as the percentage of prospected distilleries who turn into repeat customers, not just single-sale customers). This is really high, and some of it might be Founder mystique, so we're working on developing a repeatable process that doesn't require me to close sales. Right now I don't have enough time to prospect these sales outside of the DC area, but I can help to close them. Our plan for prospecting new distillery ...

Question 3

Do you plan on expanding the cocktail classes outside of the DC area?

Accepted Answer

Yes- this will be part of the job of our Sales Manager, who we will hire with this investment. When entering a new city, we will schedule trips around trade shows, set up sales meetings with distilleries and other retail accounts, and also host a cocktail class to prime our customer base there. The best part is we have great data from our Amazon sales on areas where we already have a customer base but no retail outlets, so we should be able to prospect accounts more accurately than going in b...

Question 4

Is your customer base mainly in cities?

Accepted Answer

Our retail outlets are clustered around cities, but we've noticed an interesting trend- our syrups sell faster in suburban and semi-rural retail outlets and distilleries than in cities. Our Amazon orders also cluster around cities, but we have a significant customer base in rural areas. This leads us to believe two things- cocktail syrups and craft cocktails are not a trend, and suburban and rural customers likely have to drive to cocktail bars, so drinking at home is often more feasible than...

Question 5

Who is your competition? Also, what do you see are the primary threats to the business?

Accepted Answer

We have two different types of competition- traditional mixers (Rose's, Grocery Store Brands) and other craft syrup companies (Jack Rudy, Liber & Co., Pickett's). I started this business because from a flavor perspective I didn't like any of the products in either of those categories for my own home bar.Traditional mixers are loaded with high-fructose corn syrup and synthetic additives, and I think other craft mixers companies have gone to market too quickly without perfecting f...

Pratt Standard Cocktail Co.

Craft cocktail syrups to help home bartenders elevate their game

Highlights

Team

Pratt Standard Cocktail Co.

Quick facts

Team profiles

Highlights

Related company links

Team