"Owning a Liquor Store Business and the Key to Operating it Successfully"

If you have a passion for wine and spirits, and if you’re fascinated with the different blends and the processes that go into making each of them, then owning a liquor business might be an ideal fit. If you also enjoy interacting with customers and distributors and working a cash register, then you might find owning a liquor store extremely rewarding.

1. The liquor industry is heavily regulated and each state has its own laws.

Each state has its own alcohol beverage authority that regulates how alcohol is produced, sold and distributed. It’s important to know the laws of selling alcohol in your state as well as your local community. Not only will you need a license, but also a TTB permit, which is issued by Alcohol and Tobacco Tax and Trade Bureau. In some areas, there are moratoriums on the number of new licenses that are issued and some stores cannot be sold to new owners.

2. Good management and strong business acumen.

A liquor store owner must understand marketing, sales and operations, as well as managing employees. They must also have good customer service skills and be knowledgeable about their products. A typical day may include ordering inventory, meeting with distributors and helping customers. At the same time, a liquor store owner must think of ways to market their business and remain competitive.

3. Inventory needs to be managed carefully.

Purchasing inventory for a liquor store can be very expensive. To keep costs down, liquor must be purchased in bulk. At the same, profit margins can be slim and inventory must maintain a high turnover. Cost can also fluctuate throughout the year.

• Understand who your customers are, what they buy and what sells quickly.

• Know which products have a high profit margin, and which don’t.

• Stay up to date on market trends to predict popular products.

• Avoid under stocking or over stocking certain products.

4. Choose your location for a liquor store carefully.

If you’re thinking about buying an existing liquor store, make sure the area isn’t already saturated with competition. Sometimes it’s ideal to have a liquor store near a grocery store or drug store that doesn’t sell liquor. Your location should have considerable foot traffic and ample parking. Review the lease carefully and ask the landlord if there will be any issues transferring ownership. Also, each state has specific zoning ordinances for liquor stores which can vary at the state and local level.

5. Merchandise your products strategically.

When it comes to liquor stores, merchandising can make a big difference in sales. When a customer arrives in your store, they should be able to find what they’re looking for – not be overwhelmed with clutter or overstock. Your liquor should be carefully curated to serve your customers’ preferences. Help them navigate their purchase, such as by organizing wines by occasions and food pairings.

6. Leverage marketing trends

The adult beverage market has changed in recent years. According to a 2018 study by Neilsen Research, a number of demographic, social and economic trends have led to slower growth in alcoholic beverage sales while the number of places that sell alcoholic has expanded to places such as movie theaters and tasting rooms.

Retailers can learn from these market trends by offering consumers convenience and a unique experience:

• Host tasting events. You can offer monthly tastings introducing different varieties of wine, beer or other alcoholic spirits. You can also pair your beverages with cheeses and other snacks. These events can easily be promoted on social media or through an event platform, such as Eventbrite.

• Offer shipping and delivery services. Today we live in an on-demand economy where people expect speed and convenience. They expect to purchase items with a click or swipe and then have it delivered or ready for pick up.

• Carry the right inventory for your customers. This is your opportunity to stand out from your competitors and be unique. You might have the best selection of local wine or high-end imported whiskey. You might also have small pack sizes so customers can explore new products.

• Offer loyalty plans and reward savings. Motivate shoppers to return and become regular customers by offering special discounts and exclusive offers. Promote wine or beer clubs that offer discounts in return for future purchase commitments.

7. Your liquor store should have an online presence.

Whether you’re selling online or not, every business needs some sort of online presence. We live in an age where everyone researches online before making a purchase. We use smart phones to find a business that’s located conveniently nearby. Before buying, we compare online reviews for best prices, quality and service.

• Your website should be optimized for search. Always include the basics of who you are, what you offer and what makes you stand out from your competitors. From there, you can expand further. Always make sure your website can be found in local searches.

• Customers should be able to leave reviews. Make sure your business has a presence on Yelp and Google local. Set up your accounts and optimize your pages. Your business will appear with reviews, photos, description and a location a map.

• Connect with customers on social media. Social media a great place to build relationships with your customers, offer special promotions, tasting events, recipes, etc. You can also encourage customers to leave reviews and refer others to your business.
  

Sources:

“Assessing the Reduced Growth of the U.S. Adult Beverage Market”, The Neilsen Company (US), www.nielsen.com/us/en/insights/news/2018/assessing-the-reduced-growth-of-the-us-adult-beverage-market.html. Accessed May 2019.