Market research surrounding liquor store ownership is notoriously conflicting. On one hand, they’re viewed as a dangerous buy, considering their startup and operating costs are high.
On the other end of the spectrum, liquor stores are considered one of the most recession-proof businesses due to their consistent product demand. After all, from champagne toasts at weddings to the Budweiser Clydesdales, alcoholic beverages are ingrained in our culture.
Taking all information into consideration, if you’re interested in buying or operating a liquor store, follow these recommendations to avoid common pitfalls and capitalize on the benefits.
Keep Your Inventory Balanced
Inventory is the most challenging and expensive operating cost for liquor stores. Having too much product can lead to lost profits but having too little inventory can lose customers.
If you don’t have what a customer wants once, you’re unlikely to get a second chance as they’ll shop elsewhere to find their
It’s helpful to understand which products have a high-profit margin, and which don’t. Beer, for example, has a lower profit margin than wine or spirits.
Stay informed on your industry’s market trends to predict popular products. By understanding current market demand, you can begin buying more of what people want and starting promotions on less-popular options.
By understanding what is and isn’t working in your market, you can avoid under- and
Know What You’re Selling & Who’s Buying
Understanding your current market and their ideal product supply requires a deep knowledge of who your customers are. After all, urban college students and middle-aged suburbanites will have vastly different product preferences and priorities when shopping.
If you’re unfamiliar with your area, contact your local Chamber of Commerce to learn who your major buyers are. Amend your selections, promotions, and displays to accommodate their preferences. As you get more traffic in the door, you’ll have a better understanding of whose needs you’re catering to.
As important as it is to understand your customer, it’s equally—if not more—important to know your product. Some customers will know exactly what they want before they walk in the door but others will expect your expertise and guidance while shopping.
You should have the ability to help someone pick out a rich, hearty wine for their next housewarming party or decide on the perfect rum for a drink recipe they found on Pinterest. In general, knowing your product supply inside and out, regardless of industry, is essential for success.
Take Licensing Seriously
After all your hard work, the last thing you want shutting down your business is a license issue. This is often a thorny issue for liquor stores though, and it’s important you take the licensing process seriously, especially early on or if and when the rules change.
First, it’s important that you know how much a liquor license will cost you. The correct license can cost anywhere from $300 to $14,000 depending on where you’re located. You can find the necessary information from the Alcohol and Tobacco Tax and Trade Bureau.
Laws and requirements vary by state, city, and county though, so it’s usually the best practice to hire a professional to guide you.
Develop an Online Presence
Similar to any other business right now, it’s important that your liquor store has an online presence. With 81% of shoppers researching online before making a purchase, your business needs to show up in search results.
Ensure your business has a working website and that it’s optimized for search, especially for local search results. A large number of customers shop based on location, so if your business shows up as a nearby option, you’ll see a valuable increase in foot traffic.
Additionally, encourage shoppers to leave positive reviews for your business online. This will increase your credibility when you show up in search results. Offer discounts or invitations to exclusive events for customers who leave reviews on social media, Google, or Yelp.
By having a social media presence, you can easily connect with your customers and encourage them to leave reviews or refer others to your location. Posting value-added content on social media can be another major business driver. For instance, if you’re trying to sell a certain brandy, posting a mouthwatering drink recipe featuring the product can help push it off the shelves.
Aim to Be a One Stop Shop
Consumers are accustomed to buying everything on their list in one place. As a liquor store, your customers will expect you to carry (almost) everything they need for their event. Stocking cups, mixers, garnishes and ice will save your customers a stop while increasing your revenue.
Offer Exclusive Events
Begin creating a full in-store experience with exclusive events. Wine and spirit tastings generate foot traffic, allow you to connect with your customers, and provide an easy opportunity to push new products or try to get over-stocked products off the shelves.
During these events, you can introduce yourself and your business while encouraging repeat visits, referrals, and reviews. These value-added events may be a key differentiator between you and the liquor store a few blocks away.
Running a liquor store has many advantages and challenges that any owner needs to consider. When properly stocked, legally licensed, and well-publicized, your liquor store can provide you with a financially secure future.
If you’re interested in a liquor store for yourself, check out the options currently available on BusinessesForSale for more information.