Things To Consider Before Starting A US Wholesale Liquor Business

Informational

 FREE Portrait of Male Seller Showing Bottle of Wine to Female Customer

The alcoholic beverage industry in the United States provides the most sales from all over the world. According to a report done by Statista, the market value reached 238 billion U.S dollars in 2018, whereas in 2019, it reached 250 billion. 

Working in the market of wholesale liquor and distribution, you sell and merchandise your products to retailers, manufactures, and other specialized industry customers. For your products to be distributed, you need to consider and follow federal laws. 

Apply for State Licensing 

Every state and jurisdiction in the United States have their liquor laws and standards for obtaining a license so you would need to submit an application to the state's department of taxes for a wholesale liquor license. 

Liquor licenses are essential in maintaining order, deciding what types of alcohol a company can sell or distribute, its cost, and more. When applying for a license, you might be expected to perform a background check and wait an extended period, usually six months, until your license gets approved. 

Types of Licenses 

 FREE In the liquor shop

You can get different types of licenses based on the type of alcohol you distribute.

  • Beer and Wine - Licenses like this don’t allow you to sell anything stronger than beer or wine.
  • Tavern liquor - This type is for establishments that sell both food and alcohol but get more than half of the liquor’s profit.
  • All liquor - This type of license permits restaurants to sell beer, wine, and other alcohol types, making it the most frequent license that people apply for.
  • Server - This depends on the state you live in since some ask for servers to have permits to serve alcohol, while in other states, they might not be regulated at all.

Alcohol is primarily consumed in establishments such as bars or nightclubs. However, many people don’t like or aren’t free enough to go to such places, so they prefer drinking on the go instead. For the most part, people will use hip flasks since they are considered the best companion when drinking on the go.

 

Categories of Licenses

Liquor licenses can generally be classified into four categories:

  • On-license - Applies to businesses that distribute their alcohol to be served and consumed in places such as bars or restaurants.
  • Off-license - Applies to businesses that distribute their alcohol in retail or any liquor store.
  • Club license - Applies to businesses that distribute their alcohol club members, including their guests and club representatives strictly on club grounds.
  • Special license - Applies to businesses that distribute their alcohol at specific and special events.

Liquor License Costs

The cost for a business to obtain a liquor license depends on which state you live in.

According to Ballotpedia’s report, license costs range from $100 to $13,800; however, the average price of license fees is $1,400. Even after paying the necessary fees, you might still need to spend some additional precessing costs if your local laws request it. 

Assess Opponents

Wine bottles in wine shop

You could discover more accessible ways to do business if you recognize the distribution networks your opponents use. 

Suppose you’re distributing your liquor brands to stores. In that case, you might find that discovering and recognizing how your opponents are moving their brand products onto shelves might provide you with technical support. That includes assistance in directing the retailers' attention to your provider products instead of your competitors’ offers.

As conducted by USA Trade Tasting, here are some tips on picking the right supplier and helping them reach the target market.

  • Ask if the retailer is willing to support the brand and help maximize sales.
  • Ask if their liquor price is appropriate for their customer base.
  • Ask if the retailer is aware that the wholesale liquor arrangement is a partnership that both sides collaborate to drive sales.
  • Ask if the supplier realizes that even when you sign with a distributor, the growing sales aren’t guaranteed.
  • Ask if the supplier brand has products ready for advertisement. 
  • Ask if the supplier has written down sale goals that they plan to achieve.
  • Ask if the retail brand has the amounts of liquor that he wants to sell to ensure a reliable and continuous supply.

Make Connections 

Consulting Client in Winery

To purchase alcoholic beverages from distributors or other retailers, you must connect with vendors and suppliers, which means choosing the right items for the most reasonable prices. 

Technology has made it easier for distributors to connect with their customers and traditional marketing strategies. For example, you can use social media to communicate with suppliers directly. 

Attract Suppliers

Following the collection of a limited number of wholesale liquor dealers to touch, vendors should provide them with a pitch. Manufacturers should demonstrate their worth since many distributors are picky about their products when trying to make a deal.

One of the biggest concerns that alcohol beverage distributors have is whether their product will sell, so this issue should be addressed by receiving assurance from retailers that there is already a market requesting your brand.


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