How a US distributor prices your wine.

Markup is what you add to your cost. If a bottle costs $10 and you add 30%, you sell it at $13.

Margin is the share of the selling price that you keep. If you keep 30% of the selling price, you sell at $10 divided by 0.70, which is $14.29.

Same word, same 30%, and a $1.29 difference on one bottle.

US importers and distributors quote margin. When a distributor tells you “I work on 30%,” they mean 30% of the price they sell at. The formula is:

selling price = cost ÷ (1 - margin)

Here’s what the common margins mean once you convert them to a markup on cost:

So a 30% margin is a 43% markup. If you’ve been adding 30% to a cost and calling it a distributor margin, you’ve been about 13 points short.

I use the same wine as in my note on the three-tier system: an estate wine at 6.00 euros ex-cellar, twelve 750 ml bottles to a case, shipped to New York. At the exchange rate of October 16, 2026 (1 euro is $1.1253) and my planning margins (30% for the importer, 30% for the distributor, 33% for the retailer, which are indicative planning values, not market data), the importer’s cost at the dock is $8.14 a bottle.

1. 1.The importer sells to the distributor at 30% margin: $8.14 ÷ 0.70 = $11.63 a bottle, or $139.56 a case. In the US trade, that case price is called the FOB price.
2. 2.The distributor sells to stores and restaurants at 30% margin: $11.63 ÷ 0.70 = $16.61 a bottle, or $199.32 a case. This is the distributor’s frontline price, its standard price to the trade before any discount.
3. 3.The retailer puts it on the shelf at 33% margin: $16.61 ÷ 0.67 = $24.80 a bottle before sales tax.

Look at the distributor. It buys at $11.63 and sells at $16.61. That’s $4.98 a bottle, or $59.76 a case. As a share of what it sells for, that’s 30%. As a share of what it paid, it’s about 43%. Same money, two ways of saying it.

Now see what the mix-up does. Suppose you read “30%” as a markup. You’d say the distributor sells at $11.63 × 1.30 = $15.12. The real price is $16.61. You’re $1.49 a bottle short, or $17.88 a case, and that’s one tier only.

Do it at every tier and the error compounds. Take the landed cost of $8.14 and add a 30% markup for the importer, a 30% markup for the distributor and a 33% markup for the retailer: $8.14 × 1.30 × 1.30 × 1.33 = $18.30. The shelf price at the calculator’s margins is $24.80. The wrong method understates the shelf price by about a quarter, and the producer finds out when the importer’s quote arrives.

It’s easy to see 30% as a toll. It isn’t. The distributor’s margin pays for the warehouse, the trucks and the drivers, the sales reps who walk into stores and restaurants, the credit it extends to those accounts, the bottles that break or don’t sell, and the state paperwork. A wine that moves slowly costs more to carry, because the distributor holds it longer.

That’s also why a distributor cares about depletions: the cases it actually sells on to shops and restaurants, as opposed to the cases it bought from you. A distributor’s margin only turns into money when a bottle leaves its warehouse. Pushing 100 cases into a warehouse doesn’t make you a priority. Moving them out does.

The distributor’s margin sits on top of the importer’s price and below the retailer’s. It isn’t one fixed number. It changes with the wine, the state, the size of the account and how much work the brand needs.

Two rules to know.

In some states the price is posted. New York is one. Distributors post their prices with the state and hold them for the month, and volume discounts to retailers are limited to the posted ones. So a distributor there can’t give one store a better price than another because it bought more. In other states discounts are allowed with limits. My note on volume discounts by state lists them.

Support money has to take the right route. Producers and importers often fund promotions: a depletion allowance, a bill-back, a price reduction at the register. These run through the distributor as a lower price, and federal law and state law both limit what you can do. Paying a retailer directly for shelf space is generally off limits, and the exceptions differ by state. Ask your importer how it handles this before you offer anything.

The same formula runs in reverse, and this is how a buyer actually talks to you. Say a chain wants the wine at $19.99 on the shelf, before sales tax.

• The retailer needs a 33% margin: $19.99 × 0.67 = $13.39 frontline.
• The distributor needs 30%: $13.39 × 0.70 = $9.38 FOB a bottle, which is about $112.50 a case.
• The importer takes its 30% margin: $9.38 × 0.70 = $6.56 landed cost. Strip out freight, insurance, excise and the 10% tariff, and that’s roughly 4.75 euros ex-cellar.

Your wine at 6.00 euros doesn’t make that shelf. You know it before you quote, which is the point. The calculator does this walk for you in either direction, and a Market Entry Audit does it with your importer’s real quotes.

A good price list stops the arguments before they start. A distributor wants to see the case price, the bottle price and the dates, and it wants to see them the same way every time. Here’s a layout a producer or an importer can use as it is.

Header (once per list)

Line items (one row per wine and size)

A few notes on using it:

• FOB here is the US trade meaning: the importer’s per-case price to the distributor. It isn’t the shipping term (the producer’s price for loading goods on a ship at a port). If you’re a producer quoting your importer, label your column “ex-cellar” or “FOB port” and name the place.
• Always show the case and the bottle. The distributor thinks in cases, the retailer in bottles.
• Dates matter. In states that post prices, the list has to hold for a set period, so don’t change a price in the middle of it.
• Suggested prices are suggestions. The retailer sets its own shelf price. Showing the suggested frontline and retail gives the distributor a clear target.
• Keep old lists, labeled and dated. Nothing causes more trouble than a rep quoting last year’s price.

Put your own wine through the calculator. It’s free, and it shows each tier’s price from ex-cellar to shelf. Change the margin at one tier and watch the shelf price move. If you’d like me to check your importer’s quote against the walk, or build the price list with you, Let’s talk. The first call is free.

If you work for an importer and you’re tired of re-pricing the same wine by hand every time a vintage cost, the tariff or a state rule changes, I build tools for that, and you can see how on my AI page. They calculate shelf prices for every state from one list.