Issue link: http://digital.copcomm.com/i/807387
{ SOMMjournal.com } 79 SCALE THE MARKUP, BUT WATCH TOTAL DOLLARS. Markups are often five or six times at the low end, one-and-a-half to two times at the high end, an approach keeps pricing friendlier at the middle and upper tiers. As Daniel Davis, so-called "Wine Guy" at Commander's Palace in New Orleans, says, "The average two-top is going to buy one bottle of wine. Do you really need to mark up a $500 bottle of wine three times? No, you don't." Westhoven uses a weighted formula: cost x 2.2 + $10. That lets him list a $10 wine at $32, but a $100 wine at only $230. It gets customers' attention. "We put Jordan on at $150—and normally it's $180 to $200 on other lists," he says. "People can't look past that, and they order that Jordan like crazy." But remember the old saw: You can't deposit percentages. Watch dollar margins, too, especially for expensive wines where the markup as a percent - age might be less but, observes Glancy, "you're going to have more cash going into the bank." CRUNCH, CRUNCH, CRUNCH THE NUMBERS. Whether you use spreadsheets plus data from a point-of-sale system, or software like BinWise, regular oversight is critical. And be sure to match your inventory with sales period, advises Glancy, otherwise "your numbers are garbage." Dan Davis keeps a dual-purpose Excel file, printable for his list but with hidden columns for cost, depletions and historical data. Westhoven creates scatter diagrams to show what's moving, then loads up on high- performance categories. Pay special attention to shrinkage—losses like breakage, theft and over- pours. Budget for 3%, but try to keep it to 1%, advises Glancy. Another common mistake? Skipping orders at the end of the month, he says. It seems to reduce costs, but it also reduces inventory and sales, making the impact on total product cost precisely zero.* But also—remember your core business. "You can't get so focused on the numbers that you're thinking of your customers as numbers," concludes Davis. "Hospitality and service is the essence of what we do—and we're very, very lucky to get paid to do it." Beginning Inventory: $80,000 - Ending Inventory $85,000 + Net Invoices $30,000 = Monthly COGS or PC ??? Beginning Inventory: $80,000 - Ending Inventory $70,000 + Net Invoices $15,000 = Monthly COGS or PC ??? Monthly Cost of Goods Sold Calculated What if we cut back our purchases? BUDGETING > TRACKING Shawn Westhoven, Beverage Director of Newport Restaurant Group in Rhode Island, passes savings on to the customer, winning loyalty. PHOTO: KRISTIN TEIG PHOTO: CHRIS GRANGER Daniel Davis in the cellar at Commander's Palace: "The average two-top is going to buy one bottle of wine. Do you really need to mark up a $500 bottle of wine three times? No, you don't."