A pallet of mixed grower wines
You have built relationships with a handful of growers in the Loire and the Languedoc. Once or twice a year, a mixed pallet comes over: some cases of this, a few of that, a small parcel of something special. The grower invoices are in euros. The haulier invoices separately. The clearing agent sends another invoice, and duty is paid on top. Some costs arrive weeks after the wine.
The buyer does a quick estimate to price the wines when they arrive, and nobody goes back to check it once the late invoices land.
Costs arrive late and in pieces
Landed cost is hard because the costs are spread over several invoices, in different currencies, arriving at different times, and each needs sharing across wines of different values, volumes and strengths. A quick estimate at booking-in is understandable. The problem is that it becomes the permanent cost in your stock system.
- Freight and clearance invoices arrive after the wine is priced.
- Exchange rates differ between the order date and the payment date.
- Duty is charged per litre and varies with strength, so it is not proportional to price.
- Costs are shared by case count, which undercosts cheap wines and overcosts expensive ones, or the reverse.
- The final figures never reach the stock system.
What rough costing costs
Margins you believe you are earning may not be real, especially on inexpensive wines where freight and duty are a large share of the cost. Trade prices built on the wrong cost can leave you selling some wines at a loss to your best accounts. And year end stock valuation is only as good as the costs in the system.
How your costs should be treated in your accounts is for your accountant. What we build makes the figures available and consistent.
The landed cost tool we build
- Each shipment is opened as a record when the order is placed, listing every wine, case count, bottle size and strength.
- Grower invoices, freight, clearance, duty and any other charges are attached to the shipment as they arrive, with their currency and the rate actually paid.
- You choose how each type of cost is shared: freight by volume or case count, duty by litres of alcohol according to the rates you enter, insurance by value.
- The tool calculates a landed cost per bottle for every wine, and updates it when a late invoice arrives.
- Provisional costs are marked as provisional until the shipment is closed, so everyone knows which figures are estimates.
- Final costs are pushed to your stock system, and the pricing rules can recalculate retail and trade prices for you to approve.
| Cost | Typical sharing rule | When it usually arrives |
|---|---|---|
| Grower invoice | Per wine, as invoiced | Before shipping |
| Freight | By cases or by volume | At or after delivery |
| Clearance and agent fees | By cases or value | After delivery |
| Duty | By litres of alcohol, using your rates | On clearance |
| Currency difference | By value | On payment |
Margins you can believe
Each wine's cost reflects what it really took to get it onto your shelf. You can see which growers and shipments carry heavy freight costs relative to the wine, which helps when planning the next order. Prices are set on real numbers. And when your accountant asks how stock is valued, there is a clear trail from each invoice to each bottle.
On a normal day, the clearing agent's invoice arrives by email, three weeks after the pallet. Someone attaches it to the shipment. The landed costs update, two wines cross the margin threshold you set, and the buyer gets a note suggesting a price review.
Is your costing an estimate that stuck?
- You import directly from growers or small producers.
- Freight and duty are estimated when wine is booked in.
- Late invoices do not change the cost in your stock system.
- Costs are shared evenly per case regardless of wine.
- You are not sure of your true margin on cheaper imports.