When done correctly – and when the conditions allow – alcohol delivery can be a successful business. It’s a particularly appealing expansion for established liquor stores or restaurants that serve alcohol, particularly given COVID-19 limitations on on-premises sales. All you have to do now is do your homework, follow all local rules, and build a viable business model.
Table of Contents
- Alcohol Delivery Opportunities
- Stay Legal
- Write your Business Plan
- Do it By Yourself or with a Partner?
- Create a Shopify Account and Set up Your Website
- Rent Your Facilities
- Purchase Supplies and Inventory
- Hire and Train Your Employees
- Promote Your Business
- Use a Route Planner
Alcohol Delivery Opportunities
Is it profitable to provide liquor/alcohol distribution services? There is, really.
According to IBISWorld, online beer, wine, and liquor sales in the United States are worth $983 million. While the online liquor distribution market has grown by 11.6 percent year over year, it still only accounts for 1.8 percent of total alcohol sales.
To summarize, home liquor delivery is large and growing, but there is still plenty of space for expansion.
If you want to start a local liquor delivery company, you must first determine if such a business is legal in your state. There are no federal regulations governing liquor delivery; instead, the industry is governed at the state and local levels.
To find out if any alcohol distribution is legal, look into your state and local laws. You’ll need to acquire the necessary licenses if you’re allowed to sell beer, wine, or liquor. At this point, you’ll definitely want to bring your lawyer into the conversation.
Write your Business Plan
It’s time to build your business plan once you’ve determined that you can start a home liquor delivery business or a liquor subscription service. This should be a detailed description of how you’ll do business:
- What spirits are you going to sell?
- Where and how can you get the liquors you’ll be selling?
- How will you market those items? (probably online via a mobile app or website)
- How can you deliver those goods?
- Will you charge shipping/delivery fees, subscription fees, or other fees to generate revenue?
You can also include any other revenue streams you may have, such as premium subscriptions or a monthly revenue “beer of the month” club.
Do it By Yourself or with a Partner?
If you want to provide alcohol delivery services, you’ll need to figure out how you’ll handle the delivery aspect of the company. You have two choices: recruit your own delivery staff and manage your own fleet of delivery vehicles, or hire a third-party delivery service like DoorDash or Minibar to deliver the goods you sell.
The first choice is more expensive to set up and maintain, but it gives you more leverage and allows you to retain more of your income in the long run. The second choice gives you maximum distribution capabilities right away, is easy to scale as your company expands, and doesn’t require a large upfront investment. You must make the decision up front, though you might begin by partnering with a delivery service and later create your own fleet.
Create a Shopify Account and Set up Your Website
Now that you’ve completed your planning, it’s time to get to work. One of the first orders of business should be to create a website where your customers can place orders. You can either start from scratch with your own web developers or use a service like Shopify to quickly set up a website and store to begin selling.
Rent Your Facilities
Most likely, you aren’t working from home. This necessitates the acquisition of a beer, wine, and/or liquor store. You can skip this phase if you’re working out of an established company. However, if you’re starting from scratch, you’ll need to conduct research and locate facilities in your field.
The advantage of not getting a physical store is that you don’t have to pay for high-traffic retail space. You might be able to work out of less expensive facilities in an out-of-the-way business park or something similar, depending on the local zoning laws. You won’t need a lot of room; just enough for inventory and a few employees.
Purchase Supplies and Inventory
You should have listed the vendors you’ll use as part of your business plan. You’ll need to stock all of the goods and services you’ll need to fill customer orders as you get closer to launching your website. If you already own a liquor store or a restaurant, you probably already have inventory, but you can need to-go packaging. If you’re starting a company from the ground up, you’ll need to set up contracts with vendors that supply all of the products you want to sell – and make sure they’re okay with you selling their goods online and having it delivered to your house.
Hire and Train Your Employees
One of the benefits of running a company that is mostly online is that you don’t need a lot of people to run it. You’ll need people to fill orders and prepare them for distribution, as well as stock management personnel. Of course, you’ll need to employ the right delivery person(s) to assist you in moving your beer, wines, and other spirits. During business orders, you’ll also need a person to manage customer service and answer questions/concerns that can’t be answered through FAQs and forms on the website.
You’ll have to hire and train more people if you plan to do your own deliveries. Remember that your delivery drivers will be the face of your business, so make sure they’re friendly and knowledgeable about what you’re selling. And, since you’re selling alcoholic beverages, make sure all of your drivers are of legal drinking age.
Promote Your Business
You must inform potential customers of your company before turning the “on” switch. That means using whatever marketing and promotion methods are most effective in reaching your target customers. Today, social media is the quickest, simplest, and most cost-effective way to spread the message, so make sure you have one or more social media marketing experts on staff. At the very least, you should be on Facebook, Twitter, and Instagram – wherever your customers congregate (virtually).
Use a Route Planner
If you want to handle your own liquor deliveries, you can invest in a route planner for your delivery crew. If you try to manage your orders and distribution routes manually, it can be difficult. A route planning service relieves you of the burden – and expedites the delivery of orders to customers.
It’s not as easy as giving a driver an address and handing him the keys to plan a route. It’s a difficult process that only gets more difficult as the company expands. You must consider a variety of factors when planning the best delivery path, including traffic, weather, construction, and other customers who need their orders delivered right away.
All of the work is done for you by a route planner like EasyRoutes. Simply pick the orders you’d like to route, and the system will calculate the most suitable routes for your drivers. It knows where your drivers need to go — first, second, and last — if you’re transporting individual bottles to homes or cases to businesses. It allows them to spend more time on the job and less time waiting for the customers.
As you can see, starting a liquor distribution company requires a significant amount of effort. However, as more customers move from in-store to online shopping, all of the hard work will be worthwhile. You would be effective if you can provide your customers with a superior online shopping and delivery experience.
Like this article? Check out our other article in this series: How to Start a Meal Kit Delivery Service.