Wine Program Management

GuildSomm Admin — Mon, 23 Sep 2024 22:34:04 GMT

Current Revision posted to Study-Guide by GuildSomm Admin on 9/23/2024 10:34:04 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Knowledge of wine earns sommeliers credentials and opportunities, yet what it takes to keep a position and advance is the ability to provide excellent service while running a profitable business. Successfully managing inventory, working with distributors, navigating legal issues, and training staff are essential—but often learned on the job. This guide explores these aspects of the industry, focusing on wine program management in restaurants.

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

The first term to understand is markup, or the percentage increase between the cost of goods and the selling price. For example, a 33% markup on a bottle that cost $100 results in a $133 selling price. Rather than specific percentages, however, the terms 2x (two times), 3x (three times), and so on are often used to define markup. The markup percentage is calculated by dividing the gross profit by the initial cost and multiplying by 100. Thus, at the outdated “standard” bottle markup of 3x, markup is not 300% but 200%.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

Cost of goods sold (COGS) is calculated by taking the starting inventory of a period, adding the purchases of that period, and subtracting the ending inventory. It represents the cost of bottles sold, incorporating factors such as waste, over-pours, breakage, spillage, complementary pours, and inventory errors to reveal true product cost. Because sales can fluctuate dramatically day-to-day, financial performance is evaluated based on longer periods of time, such as a month, quarter, or year.

COGS = Starting Inventory Value + Cost

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Wine Program Management

Stacy Ladenburger — Mon, 20 May 2024 16:19:50 GMT

Revision 74 posted to Study-Guide by Stacy Ladenburger on 5/20/2024 4:19:50 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

GuildSomm Admin — Fri, 26 May 2023 21:37:48 GMT

Revision 73 posted to Study-Guide by GuildSomm Admin on 5/26/2023 9:37:48 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

Stacy Ladenburger — Mon, 22 May 2023 19:03:12 GMT

Revision 72 posted to Study-Guide by Stacy Ladenburger on 5/22/2023 7:03:12 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

GuildSomm Admin — Wed, 13 Nov 2019 22:27:34 GMT

Revision 71 posted to Study-Guide by GuildSomm Admin on 11/13/2019 10:27:34 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

Stacy Ladenburger — Fri, 15 Feb 2019 23:51:47 GMT

Revision 70 posted to Study-Guide by Stacy Ladenburger on 2/15/2019 11:51:47 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

Stacy Ladenburger — Fri, 15 Feb 2019 20:48:16 GMT

Revision 69 posted to Study-Guide by Stacy Ladenburger on 2/15/2019 8:48:16 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

GuildSomm Admin — Fri, 15 Feb 2019 20:26:05 GMT

Revision 68 posted to Study-Guide by GuildSomm Admin on 2/15/2019 8:26:05 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management Study Guide

GuildSomm Admin — Fri, 15 Feb 2019 20:18:14 GMT

Revision 67 posted to Study-Guide by GuildSomm Admin on 2/15/2019 8:18:14 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

GuildSomm Admin — Fri, 15 Feb 2019 20:16:31 GMT

Revision 66 posted to Study-Guide by GuildSomm Admin on 2/15/2019 8:16:31 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

GuildSomm Admin — Fri, 15 Feb 2019 19:52:25 GMT

Revision 65 posted to Study-Guide by GuildSomm Admin on 2/15/2019 7:52:25 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

GuildSomm Admin — Fri, 15 Feb 2019 19:25:53 GMT

Revision 64 posted to Study-Guide by GuildSomm Admin on 2/15/2019 7:25:53 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

GuildSomm Admin — Fri, 15 Feb 2019 18:55:43 GMT

Revision 63 posted to Study-Guide by GuildSomm Admin on 2/15/2019 6:55:43 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

GuildSomm Admin — Fri, 15 Feb 2019 18:54:07 GMT

Revision 62 posted to Study-Guide by GuildSomm Admin on 2/15/2019 6:54:07 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

GuildSomm Admin — Fri, 15 Feb 2019 18:52:53 GMT

Revision 61 posted to Study-Guide by GuildSomm Admin on 2/15/2019 6:52:53 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

GuildSomm Admin — Fri, 15 Feb 2019 18:52:13 GMT

Revision 60 posted to Study-Guide by GuildSomm Admin on 2/15/2019 6:52:13 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

GuildSomm Admin — Fri, 15 Feb 2019 18:47:31 GMT

Revision 59 posted to Study-Guide by GuildSomm Admin on 2/15/2019 6:47:31 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

GuildSomm Admin — Fri, 15 Feb 2019 18:35:37 GMT

Revision 58 posted to Study-Guide by GuildSomm Admin on 2/15/2019 6:35:37 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Thus, at the outdated “standard” bottle markup of 3x, markup is not 300% but 200%:

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

GuildSomm Admin — Fri, 15 Feb 2019 18:31:43 GMT

Revision 57 posted to Study-Guide by GuildSomm Admin on 2/15/2019 6:31:43 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Thus, at the outdated “standard” bottle markup of 3x, markup is not 300% but 200%:

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

GuildSomm Admin — Fri, 15 Feb 2019 18:29:52 GMT

Revision 56 posted to Study-Guide by GuildSomm Admin on 2/15/2019 6:29:52 PM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Thus, at the outdated “standard” bottle markup of 3x, markup is not 300% but 200%:

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost

Wine Program Management

GuildSomm Admin — Fri, 15 Feb 2019 07:28:52 GMT

Revision 55 posted to Study-Guide by GuildSomm Admin on 2/15/2019 7:28:52 AM

Contents

Understanding Profitability
Wine Law Basics
Importing & Distribution Models
Buyer-Vendor Relationships
Inventory
Management & Service
Wine Lists

Understanding Profitability

No business can survive without sustained profitability—which requires more than simply selling wine above its purchase price.

Markup Percentage = Gross Profit/Initial Cost x 100

Thus, at the outdated “standard” bottle markup of 3x, markup is not 300% but 200%:

Initial Cost: $10

Markup: 3x

Listed Price: $30

Gross Profit: $20

$20/$10 x 100 = 200% Markup

COGS = Starting Inventory Value + Cost