68. One for $3, Two for $5, aka Shakedown Economics

In my earlier touring days as a student at Pratt Institute in Brooklyn, working as a barista, I didn’t have a lot of money. So hitting the road with Phish tour, I made money selling beer and cigarettes on Shakedown Street.

Over the years, I’ve certainly glamorized the experience, telling and retelling stories to friends, but really, it’s not a very exciting or creative activity. You buy the best beer you can at the least expensive price, and mark it up according to the supported market price of the beer on Shakedown Street. And then you hope people buy it and you hope you don’t get in trouble.

Are there easier ways to make money? Perhaps. Are there more lucrative ways to make money on Shakedown? Yes, and likely more illicit as well. High risk yields high reward, ya know? You’re probably not going to get in trouble for selling $1 grilled cheese sandwiches from a George Foreman grill on the trunk of your Honda Civic, but you’re not going to make much money, either.

Here’s the thing: everyone on lot, everyone on Shakedown, has money to spend. And while not everyone drinks beer and smokes cigarettes, I think it’s safe to say those are the lowest common denominator. Most people do one or the other. And most people will pay $5 or $10 for cold beers or a fresh pack of smokes. In fact, in my experience, people will likely spend their last $5 or $10 on a pack of smokes or a few beers. And that’s the real opportunity here.

Julia S., 38 years old, has been professionally vending on Shakedown since 2014, though she first started seeing Phish in 1998. “My first vending experience was at Big Cypress,” she says, referring to Phish’s 1999 NYE Festival in Florida. “We had happened on this bottled water sale on the way down and they were ringing up really cheap so we were getting, like, cases of water for 50 cents, so we bought a bunch of them and that got us gas money for the way home.”

In those early days, Julia would tour and try to sell her original artwork and drawings on lot. She had always been interested in art, and often made art to relate to personal experiences. Living in Vermont, having grown up in New England, her exposure to Phish and Phish fan art only fueled her passion. “Through Deadhead friends I was familiar with the legacy of making bootleg T-shirts,” she says. “And, ya know, vending food or beer on lot as a means of supporting yourself and just sort of having fun.

“Everybody has their personal history with the band and touring,” she admits. “I had sort of done a bunch of it early on and then not for a really long time and then made the decision, ‘Okay, I’m ready to go back and check out Phish again.’ So in 2014, I found all the Facebook groups and starting making friends and actually met the man who’s now my husband.”

Her husband had spent years touring with Phish and The Dead and making his own merchandise to sell on lot. “We started going to shows together and he was already vending, so I just started helping him set up,” Julia says. “We did a bunch of shows in 2014 and then we did almost all the shows in 2015, and summer tour in 2016, vending most of the shows—not all of them, but most of them.”

And, of course, the scene was much different than Julia remembered from the 1990s. “It was a lot less organized back then,” she says. “I was just sort of floored coming back to it now and seeing all the new forms of creativity and also how it then becomes merchandise. Ya know, twenty years ago it was enough to get a T-shirt printed but now people have fabrics made and they make pins and they make all this stuff that you couldn’t even have thought about getting done back then.

“We have T-shirts and pins and some hats, a disc golf imprint, a lot of our own merchandise that we make and sell and then we’ll take on some merchandise that our friends make. And we always have beer,” Julia says. “If you’re just looking to make money, like, night to night, to supplement costs, I think beer is probably the easiest thing to sell. You just buy beer, and you sell it. You need coolers and ice and that’s about it. A lot of people who sell random other things just sell beer too. Beer is probably the best thing to sell.”

The Dark, the Dank, and the Dreamy—the street bazaar of Shakedown Street has it all! (Mike Force)

That’s been my experience too: beer sells. It’s a relatively easy, inexpensive setup, and most everyone on lot is interested in buying a beer or two. It’s risky in regard to the police, but very much a sure bet otherwise. If you’re smart about it, you can pay your way through tour. You just have to play by the rules. And Shakedown has its own, very particular set of rules.

Here’s the thing: a cold bottle of Yuengling or Dale’s Pale Ale on Shakedown costs $3; two bottles, $5. It’s been this way since the 1990s. “One for $3, two for $5” is pretty much the gold standard for Shakedown. It doesn’t matter if it’s domestic bottles of beer or store-bought frozen chimichangas, that’ll be “one for $3, two for $5.”

Back in the day, even if someone was selling something for $3 or even $4 apiece, say, simple chicken tacos with salsa, if you hit them with a “two for $5?” question, they almost always acquiesced. Quoting this ratio, this rule, seemed like a secret code phrase at times, a hush-hush covenant between vendors and those in the know. Nine times out of ten, five bucks would get a pair of those chicken tacos with salsa.

“I was going to try and get a personalized license plate with the numbers 143245,” says another vendor named Ben Ray Ginwright, 30. “With stickers, it’s definitely one for $3, two for $5. With lighters, too. The sandwiches I make are one for $3, two for $5, beers are one for $3, two for $5.”

But recently, things seem to be changing.

“One for $3, two for $5 is starting to get hard to stick with,” says our vendor friend Julia. “I think people try to get a little bit more and then, ya know, if you need to drop the price, you do. But a lot of it depends on where you’re at. Like, it’s harder to get people to pay more for beer in the South, whereas, at SPAC [The Saratoga Performing Arts Center], people are used to paying more. I think a lot of it is showing up and trying to get what you can get, and then if you’re not getting it you realize you just wanna sell it as opposed to not selling it. It also depends on what beer you’re selling. If you’re selling Budweiser, yeah, totally. If you’re just selling your cheap water beer, that’s fine.

“We all try to get on the same page,” Julia says, speaking about the loose group of her neighboring lot vendors. “If we all decide that we’re going to charge $4 for a beer instead of $3, then it’s all okay. But inevitably somebody’s like, ‘Fuck it, I’m not selling any beer. I’m gonna charge $3.’ And then everyone’s gotta lower their price or people complain at you. That’s lot economy.”

Lot economy or price collusion, call it what you will. But it seems that pricing is still set by the demand—not exactly the level of demand, but a form of price collusion on the side of the consumers, effectively “complaining at you” or not buying until the weakest link breaks and one vendor caves and lowers her prices, forcing the other vendors to drop their prices, as well.

“Yeah, it’s weird,” our vendor Ginwright says. “Because if you look at the prices of different beers, you’ll have Yuenglings two for $5 and you’ll have Dale’s Pale Ale two for $5. And you can get 12 Dale’s Pale Ales for $20 and 12 Yuenglings for $12. So it’s definitely a different price on the beer, but for some reason, you just can’t raise the price on Dale’s Pale Ale.”

The truth is the laws of supply and demand are just as true on Shakedown as anywhere. But regardless, there is a ceiling for pricing. Phish fans will only pay so much, no matter how craft or delicious your beer or food.

Unless, of course, you’re selling Heady Topper.

Heady Topper

Some vendors have opted to sell nicer beers as a means to differentiate themselves and move away from the established price point. The idea here is that while someone wouldn’t be able to sell swill domestic cans for more than $3 each, no one on lot would expect someone to sell two 20oz cans of rare, craft-brewed double IPA for just $5.

“I can sell 16oz craft beers for $5 and not have a problem,” says Ginwright.

For Julia, it’s precisely these types of locally crafted beers that she aims to sell. “If you want to talk about purely dollars,” she says, “selling those super well-known, super high-end craft beers can actually be a really good racket. Heady Topper definitely funded our tour. Because that’s the kind of thing that will sell immediately. And at $10 a can, that’s really good money.”

Heady Topper, an American Double/Imperial IPA brewed by The Alchemist in Stowe, Vermont, is only available in Vermont. And despite that, or in part because of it, this IPA has come to make a reputation for itself within the craft beer community.

“We’re just lucky,” Julia says. “Because it’s got this sort of national mystique and you can only get it in the Northeast, and when you bring it somewhere else everybody’s really, really excited for it. We brought it out to Bend, Oregon, for the start of 2015 tour, and for every one person who’s like, ‘What the fuck are you charging $10 a beer for?’ there are five other people who are lining up to buy it, like, ‘I’ve heard about it and wanna try it!’

But even in Vermont, it’s not an easy score. Supply is limited and most stores sell out quickly.

“We spend a couple weeks before tour amassing a stock of beer,” she says. “And we’ll just sell all of it in the first two or three shows. If we go to lot with 10 or 15 cases, well, if you sell 15 cases of beer, that’s $3,000 in two or three nights. And so then you’re not stressing as much because you’ve got a cushion. It’s always better to have a wad of money up-front because you can then keep investing it and buy some cheap beer to sell and make another couple hundred dollars a night.

“We have quite a few friends who will make trips up here, a couple hours, and come a couple times a week, just to take 10 cases of Heady Topper on tour with them. And it’s not cheap, like $15 for a four-pack of cans. But if you break down the economics of it, transportation, hourly rate, ice, I can justify charging $10 per can.”

Clearly, this is an exception to the one for $3, two for $5 rule. Julia is overtly targeting a specific consumer base of craft beer aficionados, moving away entirely from the range of gold standard beers and consequently taking herself out of the broader “beer economy.” It’s that outlier demand for something consumers can’t have, paired with the higher cost of goods wholesale, that allows her to sell outside of The Golden Rule of Shakedown Street.

“Heady Topper has become lot currency,” says Ben Ray Ginwright. “Those are $10 a can, ya know? No matter what. Even though they distribute more now and have a broader distribution area, they’re still $10 a can. You can trade ’em for whatever, if you got ’em.”

I mean, I think we’d all agree that buying or selling $10 cans of beer is a bit exceptional, just generally speaking, but if you really think about it, Julia S. is an importer/exporter. She is bringing a product to a region where it was previously unavailable. And she’s successfully charging a premium for that imported product. That’s Shakedown Economics!