Choosing the Right Wine Pricing Tool

Person holding ipad with heads up display in front of shelves of wine bottles

The profitability of your three-tier winery is inextricably linked to the pricing of your products. But effective pricing, from distributor incentives to retail placement, carries numerous challenges. Without the right wine pricing tool or an optimal product pricing strategy, your winery could be struggling to reach the necessary profit margin to cover each tier of the sales process.

Luckily, wine pricing tools built to fit your business are evolving rapidly, and they can be a sound investment to increase your profits and automate the countless spreadsheets, paper files, and mental energy used to track your pricing. The right solution can also help determine the added costs and potential profit margins wineries like yours must monitor nonstop.

Full-cycle pricing software offers a consistent source for sales, finance, and technical support teams to access the correct pricing for each market and customer, streamlines processes, and eliminates costly errors. But selecting the right wine pricing tool for your operations can seem daunting, especially since the current market of options approaches pricing management in very different ways.

For instance, many traditional pricing strategies and solutions use third-party depletion data, which doesn’t account for real-world deals and invoices. This often leaves at least a 30% gap in pricing data and drives up costs, whereas more modernized trade management software leverages real-time data and actual invoices integrated with your finance and accounting records to remove that guesswork and recapture 30% for your profit margin.

While an effective pricing management solution increases your profitability, the benefits of optimal pricing also impact every branch of your business, from sales and operations to information management efforts. It’s important to evaluate and invest in the wine pricing tool that will work for you the most. This article will help guide you through that journey.

The Importance of a Wine Pricing Tool

The benefits of adopting an automated pricing management solution at your three-tier winery are far-reaching:

  • Your winery has more control over the profit margin.
  • Your retail clients are more likely to increase sell-through.
  • The programs you create for distributors are easy to track and maintain.
  • With more accurate data, you can predict the impact of future promotions and optimize accordingly.

The four pillars (also known as the four P’s) of successful marketing and building your wine brand are concrete and universal: product, price, placement, and promotion. What’s unique about applying this in the three-tier wine business is that after “product,” the pricing, promotion, and placement are interconnected and bottlenecked through the distribution model, making pricing and promotions management solutions even more significant.

Without effective pricing oversight and control, on and off-premise retailers could be underpricing or overpricing your wine, which we probably don’t have to tell you has significant drawbacks. When distributors get wildly varying prices on your product, outlets can carry that variance to retail, leading to brand inconsistency or the impression that your winery plays favorites between specific retailers. Not only is your sell-through likely to decrease because of the variance, but it’s also possible that some retailers will stop carrying your label altogether.

When your winery can create and effortlessly enforce internal procedures and best practices to ensure distributor promotions, incentives, and billbacks are processed with accuracy and efficiency, you can begin to guarantee your business isn’t losing money in any tier of the sales process while protecting the brand’s market value with the consumer. Wine pricing solutions work two-fold to stop your winery from giving away money in order to protect your profit margins and oversee what are arguably the most vital components of your brand (or at least the majority of it).

In other words, all the facets of pricing need to be on your mind at all times.

Proper wine pricing also helps create successful promotions and programs for distributors, which can assist retailers in reaching your winery’s sales, revenue, and marketing goals. While your winery might already have impactful promotions, a wine pricing solution ensures consistency of your deals and keeps track of their profitability with accurate data, saving you time and effort.

As you offer more programs, a pricing management solution helps plan for the future by ascertaining which past promotions were the most profitable. No one has a crystal ball, but a pricing tool can provide prediction data regarding future promotions, shipments, and income, allowing your winery to plan an effective, forward-thinking strategy.

How to Choose the Right Pricing Management Solution for Your Winery

Choosing a wine pricing tool shouldn’t be a quick and easy decision. Your winery will have to perform internal research, consider various internal, external, and distribution-related factors that impact your profit margin, incorporate your marketing plan, and weigh the pricing and promotions management options that meet the needs of your business and your teams. Let’s get started.

Internal Needs Gathering

Before you optimize any system or process, you need to know its current status. What does homeostasis look like at your three-tier winery? Where are the weak points in your business model and your daily operations? Why are you missing out on revenue you expected to collect?

Luckily, there’s a tool to guide you through this portion of the process: our Pricing Tool Evaluation Checklist. The checklist takes you step-by-step through every facet of your wineries operations to help you determine your needs.

Document Internal and External Factors Impacting Your Profit

You know that there are a variety of elements influencing the profitability and success of your three-tier winery. As you set out to find, match, and adopt a pricing and trade-management solution, it’s important to lay them all out in front of you so you can ensure you’re considering and factoring everything into your pricing processes.

Internal factors boil down to overhead and may include:

Operating costs

  • Insurance
  • Licensing
  • Accounting/Administrative fees
  • Rent/Mortgage
  • Marketing
  • Office Supplies

Production costs

  • Equipment and maintenance
  • Safety compliance
  • Quality Control


Shipping costs

Any relevant taxes 

While objectively out of your winery’s control, planning for external contingencies is necessary when considering your operations, including product pricing. External factors often include:

  • Your winery’s location
  • Local, regional, nationwide, and global events that could impact
    • Product demand
    • Availability of materials and workers
    • The nation’s economic health
  • Fluctuations in demand

Evaluating Your Distribution-Related Factors

When choosing a pricing tool, it is imperative for your team to consider the effectiveness of your existing distribution strategy and how it can be improved upon. What does your winery’s current distribution look like?

Do your distributors order a consistent quantity of products? Is your winery offering discounts, promotions, and incentives to distributors? If so, how successful are those programs, and how is your winery tracking that success?

You may not have the answer to all these questions, but that is what you’re aiming to reveal! Find out what you want to know, what you have answers to, and what you need answers for in your distributor operations to dial up the success and profitability of those efforts. When you’re evaluating a wine pricing tool, now you have direction in what you want it to deliver.

Marketing Strategies’ Impact

Let’s go back to the four P’s for a minute. Being successful in the hyper-competitive wine industry is a balancing act of content optimization, branding, promotion, maintaining relationships in a three-tier sales chain, and meeting sales goals. When choosing a wine pricing tool, take stock of your marketing plan and strategies to examine how a pricing tool can help you support and meet those “product, price, promotion, and placement” goals.

Find the Tool that Meets Every Need

Once you have taken stock of your current situation and evaluated the many facets of your three-tier winery (with the help of the Pricing Tool Evaluation Checklist, of course), you are ready to choose a pricing solution.

You want a wine pricing tool that puts the control in your hands, is easy to use, and streamlines operations. Total control and transparency for your pricing strategy is the purpose of trade management software in the first place, and choosing the optimal solution will transform your winery’s ledger.

Tradeparency’s Solution

Tradeparency’s full-cycle wine pricing and promotions management tool is the key to success for wineries looking to improve their profit margin and streamline the pricing process.

Our all-in-one, centralized solution offers price management, promotions planning, reporting, and analytics, so winery owners always have complete control of their pricing strategy. Depletion allowances are included but with a much lower likelihood of missing out on 30% of profits sacrificed when using third-party depletion data. Tradeparency’s wine pricing tool also allows for program planning that streamlines pricing for the winery’s entire team.

Choosing a wine pricing tool is a crucial step in the success of any three-tier winery. The perfect solution is different for each business, but getting there requires preparation and a searching inventory of your winery’s current strategies and areas for growth.

Contact Tradeparency for a no-cost, no-obligation, personalized demo. Just one hour of your time can transform your entire pricing strategy.