The cost of wine is $15.

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Distribution Most wines are sold through distributors because few wineries have sufcient sales to justify an independent sales force. The distributors want to make a prot, so they will equently want a 25% margin for representing the wine. Thus if a winery sells a bottle of wine to a distributor for $10, the distributor will price it at $13.33 to sell it to the retailer. And of course the retailer wants to make a prot and generally they expect at least a margin 30% of the retail price (up to 35% for wines that retail for more than $3 0). For example, a bottle of wine the retailer paid the distributor $13.33 for will retail for $19.04. And the winery wants to make a prot also. For wines that retail under $20 a bottle, the margins can be as low as 30% because the winery is dealing with a volume product. For more expensive wines the margins need to be higher, typically around 40%. Part of this is because it is very hard to allocate some of the overhead costs to individual vintages or types of wine. So things like electricity, staff costs, and rents have to be covered by the margin for the wine