This is the fourth instalment in my quest to start a gin brand on a shoe-string budget. If you’re just joining us now you can find all the other posts on my Pipehouse Gin project page.
First off, I am really sorry this update has taken so long! It has been three months since episode 3 and we have loads to cover.
Everything has been cracking on. We have put in a huge amount of work and got a long way, while making our fair share of mistakes. We don’t yet have a product to sell (everything is always harder and takes more time than you think), but are very close. The first batch is currently being distilled and by the next episode you will be able to get your hands on a bottle of our awesome Pipehouse Gin!
I’m going to split this into two. Our marketing and sales strategy. And the product itself.
- 1 Part 1: Marketing Strategy
- 2 The Product
- 3 Mistake, Mistake, Mistakes
Disclaimer: We are working this out as we go along and there are probably mistakes in here. Do your own research.
Part 1: Marketing Strategy
A Local Focus With National Ambitions
Because we’re complete novices at selling alcohol the plan has always been to try and play to our strengths and target a slightly different market to everyone else. That is we plan to sell online, and in particular on Amazon. My main business is a table tennis brand and it gets 80% of its sales from Amazon, so I feel more comfortable competing there than via traditional sales routes.
The article above goes into the intricacies of selling on Amazon. But the short version is that you need to drive some sales of your product before it will start appearing when people search on Amazon. The more sales and reviews you can drum up, the more momentum you get and the higher you appear on Amazon searches.
To get those initial sales we are going to really focus on our local market. If we can get everyone in Tunbridge Wells raving about and buying our gin then it should give us enough momentum to rank on Amazon and (touch wood) get lots of national sales.
We have been focusing on creating as much as splash as possible here in Tunbridge Wells. I want everyone to have heard of Pipehouse Gin and we’re trying any idea we can come up with.
Our launch event is happening at Chapel Place, a gin bar in Tunbridge Wells on Thursday 7 June. If you fancy it please click attending on the Facebook launch event. It is going to be very busy so if you fancy a chat then I suggest coming to one of the markets I talk about in the next section.
It took us a while to work out how best to do the launch. Should we do a closed party and just invite local influencers? Or a big open event and get as many people as possible through the door.
We eventually decided on the latter. We want everyone to hear about us and so being open to the public is pretty important. Plus it allows us to tell everyone about our gin in the event in the month leading up. We will be leaving flyers and posters everywhere we can and send press releases to local newspapers and bloggers. Good old traditional marketing!
On the night, will be giving away free samples and selling reduced price cocktails made from our gin (£5 instead of the normal £9). And to keep it inline with our overall marketing strategy, everyone who attends we will give a business card sized card encouraging them to buy a bottle on Amazon.
The event is going to be quite expensive as we will be providing all the gin for free and the bar will be keeping any revenue from the cocktails. But fingers crossed the hype will be worth it.
Something we do hope will make money while growing the hype is having a stall at local markets. There are a lot of food and drink markets near us, and as Summer is starting they are ramping up.
There are enough for us to do one a week. But to begin with we have just signed up for two. The first is a fortnightly weekend market on the Pantiles in Tunbridge Wells (pictured above). We will be there 2nd and 3rd June and will have a stall and will be selling bottles of our gin. I will only be there personally on Saturday 2 June. I expect it will be quite quiet so if you want a good chat then that is the day to drop by!
And the second is a Gin & Jazz Festival also on the Pantiles. This event will be slightly different as we will be more of a bar, selling gin & tonics as well as full bottles.
They are both tests. They could work out really well and be good money makers, or they might not and we could end up losing money. Our philosophy at the moment is that we will try everything and stick with what works.
But we can’t just turn up with a crate of gin and hope to sell it. First off we need to do it legally. Some markets have premises licenses that we would be covered by, but most don’t which means we need what is called a Temporary Events Notice.
In the last episode, Emma and Katie had just passed a course to get their BIIAB Level 2. They were then able to get an alcohol license from the local council. It took about 6 weeks to arrive so if you plan to sell alcohol in person apply with plenty of time.
Each TEN costs £21 and a personal alcohol license holder can get up to 50 a year (max 15 per venue). Here is the cool think about TENs:
The council can’t refuse a notice unless the police or Environmental Health object to it. They must do this within 3 working days of receiving it
So we can plan for any event without having to worry about council turning it down. If they haven’t objected within three working days of receiving it the event can go ahead.
We also needed stall branding and a card reader. We are doing the stall branding now. The card reader we have gone with is iZettle. It cost £29 (exc VAT) and they take 1.75% of all payments made.
It is pretty simple and can be used anywhere my phone has signal. Plus there are no contracts so if the markets don’t work out we won’t be paying a large monthly fee like you would with traditional card machines.
Meeting Bar Owners & Local Businesses
But we don’t just want to sell ourselves. We want Pipehouse Gin to be for sale in all of the local bars. I am quite shy so the thought of cold selling to people like they do in the apprentice terrifies me. Instead, we have been going for a little warmer approach by getting referred or introduced to business owners.
One way we did that was by joining a community interest group called Tunbridge Wells Together. It is part council and part member funded and provides help for local businesses. Everything from networking events to helping you with social media.
Through them, we have been able to get introduced to some of the movers and shakers of Tunbridge Wells. From press to bloggers to bar owners. A big shout out to Lauren and Karen who have been a huge help so far!
We have slowly been making contact and meeting up with local business owners and giving them samples. But are yet to go into overdrive because we don’t have a product to sell them. I am have been pretty stunned by just how helpful everyone has been. You don’t get anywhere near as much support by doing an internet only business. And although I got a lot of support with The Wren Coffee Shop, it was in London where everyone is busier and a bit colder.
Social Media & Website
But targeting local doesn’t mean we can ignore online. In fact the opposite, it means we heavily target local online. That means a strong social media with lots of local hashtags and a website with strong local search engine optimisation. Basically if anyone Googles “Kent Gin” or “Tunbirdge Wells Gin” we want to be at the top.
Let’s start with social media as that is the easiest to understand, and also where we made our first mistake. We were pretty quick to register pipehousegin on Instagram and Facebook. But forgot about twitter. And when we got round to it someone had ponced it! I think they keep a track of new companies being registered and then just snap up the twitter handles with the hope of selling it back. We have contacted them to see if they’ll give it back, but so far not much luck. And we’re not willing to pay much for it. Instead we have registered pipehousetw on twitter.
I don’t think it particularly matters as Instagram is going to be our focus:
For something like a local gin brand, Instagram is an awesome tool. Even with just a few posts, we have been seen by lots of local people. I must have heard “ohh I saw you on Instagram” about 20 times in the last few weeks. It also ties in well with our plan to drive sales on to Amazon.
Now the website. For the moment we just have a landing page at PipehouseGin.com. The thing that is holding us back is that we don’t have the final product yet to take beautiful photos of. But we have been spending quite a bit of time building the website behind the scenes (sorry no sneak peaks).
It is built in WordPress using Divi by Elegant Themes (similar to this blog). I did a little how-to-guide on how to make a website here:
It is cheap and you have a lot of control. But if you fancy something less hands-on then I suggest Shopify. You can see my article here where you I used Shopify set up a completely automated t-shirt dropshipping business.
I’ll talk you through the website in the next episode when it is launched!
Getting Set Up On Amazon
If you remember above we are not planning on selling via our website, but on Amazon instead. To do so we needed to first get approved to sell alcohol.
I was actually really nervous about this part. Alcohol is a gated category and Amazon is notorious for being difficult for sellers to deal with if you want anything out of the ordinary.
So we signed up in early February for an Amazon Seller Account and contacted them to try and get accepted to sell alcohol. It took about six weeks of chasing them before they replied, at which point we were asked to provide some extra information, such as a copy of our alcohol and premises license (check out previous episodes for all the legal stuff) and then a few days later we got this email.
Woo!! And we got in just in time as two of my readers have since applied and were told that applications to sell alcohol are temporarily closed.
Now if we hadn’t been accepted it would not have been game over. Instead, we would have gone to a distributor who sells on Amazon and would have given up some margin to them to get them to list it for us.
Now we have two choices for how we sell on Amazon. One is to store the stock in Amazon’s warehouses and ship from there. The other is to ship straight from our distillery. They both have their pros and cons.
Pros To Fulfilled By Amazon
- Next day delivery.
- Cheaper for individual sales.
- Available for prime.
- Amazon will feature us higher in their search results.
Pros To Fulfilled by Distillery
- We only need to pay alcohol duty when it leaves the distillery. So we will get money from the customer before having to pay the £10 a bottle of duty + VAT.
- Simpler. We don’t need complex packaging to survive in the Amazon warehouse.
- Cheaper for sales of wholesale orders.
We will trial both and see what difference there is.
So now you’ve heard all about our sales strategy and the fun we’ve been having in Tunbridge Wells, on to the gin itself.
How the bottle looks and feels is really important. Especially as we are aiming at a premium market. We worked our way through a lot of different glass companies trying out different bottles. In the end we went with a German company called Kefla glass. They seemed to have the best balance between high quality and price for our order sizes. Even if we did have to pay in euros and ship from Germany.
Talking of which, for all foreign exchange I use a company called Currency Fair. It is a peer-2-peer marketplace that matches you with other people, which pretty much drops the exchange fees to zero. The only fee is a transfer out fee which is a flat £2.5 per withdrawal. It’s a little bit geeky but on large transfers saves a lot of money.
At the end of the last episode we were trying to get our label professionally created. We had got some absurd quotes from professional agencies, starting at £65k… and we had tried the other end of the market 99 Designs and had some test labels done for £229.
Neither of them really worked out. One was too expensive and 99 Designs wasn’t able to follow our very specific design brief. It is a crowdsourcing site that lets you host competitions in which freelance designers compete to win your business. They all submit a design, then you pick your favourite (or get a refund if you don’t like any) and then work with them to tweak it. Which is great if you don’t mind what it looks like as long as it looks good. But didn’t work for us.
Instead we hunted out a freelance designer who was affordable but also made some designs we really liked. Then Katie worked with them to create a really high-quality label. You can find freelancers on places like Freelancer or Upwork. After about two months we ended up with a logo and label that we are really pleased with. Drum rolll, and here it is:
The plan is that as we release new flavours we can change the colour and keep the rest the same. Which will make a statement on a bar and also look great in a smaller gift pack.
Alcohol Labelling Legal Requirements
Let’s take a little aside to talk about what is needed on an alcohol label. It is a bit of a mess! With both EU and UK laws applying and took me way too long to find out. Here is what I’ve worked out and ran past a few other distillers to confirm. Please do your own research as I cannot guarantee its accuracy:
- Batch number
- Country of origin
- Name or business name and address of the food business operator
- Packaging must show the number of standard alcohol units contained
- Alcohol strength is shown by volume
- Net quantity in the bottle. Using the ℮ mark is recommended
- Labels must be in British English
- Instructions for use
For alcohol as strong as gin there is no requirement for use-by-dates or nutritional information.
And as far as I can see there is also no requirement for the ‘do not drink when pregnant’ logo or the UK chief medical officer’s drinking recommendation. But it is a guideline and ‘suggested’, so we included it anyway.
Finding a printer also turned out to be a bigger job than anticipated.
- We wanted a small order size.
- It to be affordable (under £1 a bottle).
- And to have copper foiling.
- High-quality paper.
- Batch number to be changed every 250 labels.
- Short lead times. Some printers have 2 month plus lead times…
When I left you last time we thought we had found a cheap option. Turns out we were wrong. When the samples arrived the printing was all skewed and had come out wrong, so we went back to Google.
I think we must have got samples from just about every label company in the UK.
We ended up going with Windmill Printing who hit that sweet spot. They let us do a smaller order size, 4,000 labels (so 2,000 front and back), while still being the highest quality. They had a three week lead time and our labels should be done in the next week.
Who knew there was so much to learn about cardboard boxes? Not me.
We actually forgot we needed any until someone asked us how many bottles fit in a case. Ummm what case?
Anyway cardboard boxes has been a focus of my life for the last couple of weeks. The problem is getting them cheap enough to still make any money. To store a bottle in an Amazon warehouse we need four levels of packaging.
- The glass bottle itself.
- An airpack to protect the glass.
- An individual cardboard box to put the airpack in.
- A larger box to store the individual boxes in.
That is a lot of packaging that takes up a lot of room. And even worse it takes a lot of work to pack them, work we have to do ourselves or pay someone to do. Trust me, packing 500 bottles is not a small job!
Here is a good rule of thumb: If you can get everything for about £1 each you are doing well. The bottle, the label, the air pack, the cardboard box, and a person to pack it for you.
I think we are getting there now but it has been a bit of nightmare. And messed up our pricing!
I have been hesitant to say out loud a price we are going to sell our gin for (in episode two I said between £35 and £45) because I didn’t want to commit to something and then find out we had made a big mistake with our costings and have to up it.
Well, it turns out I was right and we made a mistake with our costings…
Apart from silly things like forgetting to include the cardboard box for storing the bottles. The big one was we discovered was you need to pay VAT on alcohol duty. I had just assumed alcohol duty would be exempt because a tax on a tax is ridiculous! But apparently not. To put that into perspective, alcohol duty is a little over £8 a bottle. With VAT we’re now talking £10 per bottle just from the alcohol duty. Let alone all the other costs and other VAT.
As we are not VAT registered yet the extra VAT is coming straight out of our profits. (we are not registered because it works out cheaper to hold off registering for as long as possible if our target market is direct to consumer).
I am going to keep my own advice and not give away a price now. We can go into more in the next episode. But the hint is that we will be similar to other craft gins:
If we look at our direct competition (other premium craft gin brands). Monkey 47 is £38 (for a smaller 50cl bottle). Warner Edwards Rhubarb Gin is £38. Silent Pool is £35. The three gins in a 50 miles radius of us (1606, Anno & Greensand Ridge) are: £41, £36 and £40 respectively.
Strangely for an article about making gin, I am not going to talk about it at all. We came up with our Earl Grey & Cucumber recipe in episode 2 and although we have been tweaking it and doing focus group testing ever since, it is still pretty true to form.
Mistake, Mistake, Mistakes
Wow. This has been a long article. To finish let me treat you to some of the mistakes we made:
- Forgot to get heat seals for our bottles.
- Forgot to register our twitter handle and had someone nab it.
- Didn’t realise you have to add VAT to alcohol duty, throwing our pricing out of whack.
- Forgot that we need to store the bottles in larger boxes. Meaning we had to source them last minute and pay a premium.
- Didn’t buy enough corks.
- Embarrassed ourselves by trying to buy 35 cucumbers wholesale from Kent’s biggest farm.
I don’t think that’s too bad and none have been completely detrimental. Not bad considering we are complete amateurs!
Want to continue following the gin saga? Then sign up to my email list and I’ll send you out a discount code when it is released and alert you to any new posts published.
Also any advice please chuck them in the comments. We need all the help we can get!