{"id":18600,"date":"2025-07-17T10:14:42","date_gmt":"2025-07-17T15:14:42","guid":{"rendered":"https:\/\/www.partstown.com\/about-us\/?p=18600"},"modified":"2025-07-17T10:14:42","modified_gmt":"2025-07-17T15:14:42","slug":"alcohol-pricing-calculating-markup-pricing-drinks","status":"publish","type":"post","link":"https:\/\/www.partstown.com\/about-us\/alcohol-pricing-calculating-markup-pricing-drinks","title":{"rendered":"Alcohol Pricing: Calculating Markup & Pricing Drinks"},"content":{"rendered":"

In addition to developing an appealing menu, <\/span>setting prices strategically<\/span><\/a> is essential to your restaurant or bar\u2019s success. If you\u2019re not sure how to strike the right balance between cost and value, this guide breaks down alcohol pricing for common types of adult beverages and explains how to calculate markup to help maximize your profits.<\/span><\/p>\n

Key Pricing Terms<\/strong><\/h2>\n

In order to learn how to price alcoholic beverages, it\u2019s important to familiarize yourself with important industry terminology:<\/span><\/p>\n

Liquor Cost<\/span><\/em><\/h3>\n

The <\/span>liquor cost<\/span><\/i> is the amount your establishment pays to purchase alcoholic beverages, such as bottles of wine, cases of beer and handles of spirits. It refers specifically to the wholesale cost of the alcohol itself and does not include mixers, garnishes or other non-alcoholic ingredients. This can be expressed as the cost of all your alcohol inventory\u2014or, less commonly, the cost of alcohol in a specific drink recipe.<\/span><\/p>\n

Bottle Cost<\/span><\/em><\/h3>\n

A closely related term is <\/span>bottle cost<\/span><\/i>, the wholesale price of an entire bottle of wine or spirits. Even if you purchase alcohol by the case, knowing the cost per bottle will make it easier to calculate the true cost of each drink you serve.<\/span><\/p>\n

Cost Per Ounce<\/span><\/em><\/h3>\n

Once you know the bottle cost, you can calculate the <\/span>cost per ounce<\/span><\/i>, the cost of an ounce of alcohol used in a recipe. Some drinks have more than one ounce of alcohol or more than one type of alcohol, so remember that when calculating the final price of a drink. To calculate cost per ounce, use this simple formula:<\/span><\/p>\n

Cost Per Ounce =<\/strong> Bottle Cost \u00f7 # of Ounces in Bottle<\/span><\/p>\n

Pour Cost<\/span><\/em><\/h3>\n

Pour cost<\/span><\/i> is more specific\u2014it\u2019s the cost of alcohol (and sometimes mixers) to make a drink, expressed as a percentage of the drink\u2019s price. Traditionally, pour cost only included alcohol, but nowadays many businesses also consider the cost of mix-ins. According to DoorDash, <\/span>pour cost percentages<\/span><\/a> can range from 15% for shots to as high as 30-40% for wine, 20-25% being the industry average. To calculate pour cost as a percentage of the drink\u2019s sale price, use the formula below:<\/span><\/p>\n

Pour Cost =<\/strong> ((Cost of Alcohol + Cost of Mixers) \u00f7 Sale Price) x 100<\/span><\/p>\n

Gross Profit Margin<\/span><\/em><\/h3>\n

Related to pour cost,<\/span> gross profit margin<\/span><\/i> is the percentage of a drink\u2019s sale price that remains after subtracting the cost of ingredients, but before taking out labor or overhead. Average <\/span>gross profit margin<\/span><\/a> on alcoholic drinks varies from as low as 60% for some wines to as high as 85% for some spirits. To find gross profit margin, use the following formula:<\/span><\/p>\n

Gross Profit Margin =<\/strong> 100 – Pour Cost<\/span><\/p>\n

Markup<\/span><\/em><\/h3>\n

Not to be confused with margin, <\/span>markup<\/span><\/i> is the amount (shown as a percentage) added to the cost of a drink to determine its selling price. According to online alcohol marketplace Provi, <\/span>alcohol markup<\/span><\/a> falls between about 200% for wine and up to 400-500% for spirits. Use the following equation to find markup:<\/span><\/p>\n

Markup =<\/strong> ((Sales Price \u2013 Cost) \u00f7 Cost) \u00d7 100<\/span><\/p>\n

Steps to Price Drinks<\/strong><\/h2>\n

Once you understand industry terminology, you can use the above alcohol pricing formulas effectively. To get a baseline for adult beverage prices in your restaurant or bar, follow the steps below:<\/span><\/p>\n