Liquor Store?

[AWDtrash]

Anyone got any experience opening and owning a liquor store? And does it have potential to be fastlane if owning more than one. Please share!

 

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[TheTruth]

This question is very vague and anyone would have a hard time giving a very detailed answer. That being said:

- I will assume you reside in the states

For anything to be fastlane you need either scale or magnitude or both. Sure you could open up a liquor store and than start franchising it and make millions.... but the obvious questions to answers would be: what is your unique selling point? why would I buy from you instead of all the other places I could go to? What's stopping a big corporation from destroying you?

 

[Vigilante]

I have a TON of experience as a customer of a liquor store if that would be helpful.

 

[Trevor Kuntz]

Unless it was a high-end liquor store, I don't think you could pay me enough to want to open one. My friend's dad worked at a liquor store for a while in an area on the other side of town that I always thought was a pretty good area, but they would get robbed all the time. It was worse than a convenience store. Plus, even in the nicer areas, you will always have to deal with some low-lifes. I would rather open a cigar shop that just also happened to sell liquor. Haha.

 

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[The-J]

In my opinion, it's more trouble than it's worth, but what do I know; I'm not even legal to drink in the US.

 

[RDudek]

Hi, I'm new here.

I've actually owned one in Colorado. Check your state for laws as they may be different than here. Here in CO, every shopping center seems to have one. And they're trying to pass laws that would allow grocery stores to sell beer/liquor which could potentially put away many owners out of business.

Let me tell you something, it's a tough business. Tons of competition. There is average less than 20% margin. I opened it in June 2006, and closed the shop in August 2009 because I just couldn't afford operating it. Seriously, I was working it 10+ hour every day.

 

[jaywolf]

The best fastlane businesses are the ones with the most passivity; how passive do you think opening up and managing a liqour store (or many) would be?

 

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[JEdwards]

I looked into buying one for a minute in the 90's.. There was way, way more money in inventory than I expected. For a little store inventory could be 100k easy.

Tough business, would not want to be a part of that, plus i would bet it is sad seeing the regular drunks everyday.. You are happy cause they come into buy something, but at the same time, you know it is sad.

Also I might be tainted this week, one of my best friends died last Tuesday from Drinking.. After being a drinker for 40 years, his Liver gave out. Bad thing.

 

[Jake]

I'd rather produce the product that other people are selling in their store.

 

[The-J]

Not to mention all the robbers and the miscreants that you would have to deal with... I dunno, still seems like more trouble than its worth. My safety is paramount. No money in the world can change that.

 

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[healthstatus]

Several issues that Liquor store owners face are brought up here. How about starting a business that solves one or more of them? That would be fastlane!

right off the top....
1) Credit only store - no cash to steal.
2) Inventory financing
3) How could you work a health screening into the biz model?
4) Security model that totally deterred theft.
5) Niche liquors that would increase margins.

 

[RDudek]

Hi healthstatus,

Some of those could be interesting, while others are a dead end.

1) My store never got robbed for cash. However, I did have few liquor bottles stolen. I've seen stores in NYC where they basically created a huge cage and the customer would come up to a window and ask for whatever product they wanted. However, this system while safe, limits the opportunity to sell extra items people might find interesting.

2) All distributors offer inventory financing interest free. You usually have 30 days to repay for the items you purchased, otherwise there are some late payment fees.

3) Not sure how to go about this. What kind of health screening options? Also, state laws vary by location and have all kinds of red tape limits on what can and cannot be done at a establishment that sells alcohol.

4) See #1? Coming up with a new system would be an interesting business opportunity. Might require some research on what works and doesn't work today with the systems stores now use and how can they be improved upon.

5) This is one thing that I have on my mind. I brew beer and wine locally at home for my own and family consumption. However, I don't think there is much money made in niche liquors. In my store, I would sell 10 cases of 1.75 cheap McCormick vodka for every one bottle of 1.75 Jack Daniels. Probably the best thing to do would be to have your own vineyard and make wine? Colorado has a few local wine producers and they're pretty popular. Only thing you have to worry about is weather. Especially here in Colorado where weather is pretty hectic.

 

[MakeItHappen]

but what do I know; I'm not even legal to drink in the US.

Then come to germany! Here you can start drinking beer with 16 years.
This is why i already have 7 years of experience in this field!

 

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[healthstatus]

Rdudek,
you're new, around here, we look for problems to solve and ways to make money, The OP asked about liquor stores, discussion ensued about troubles and problems in owning a liquor store. When you solve trouble and problems you can turn that into a business. My point was to get everyone to see the problems, quit thinking about the store as the moneymaker, and if someone wants to take the time and effort and investigate this maybe it could be something. I haven't been in a liquor store more than a dozen times, but in half a dozen posts several issues were brought up, and the statement was made, every strip mall has one. I just threw some off the top ideas based on the problems presented. Sorry they don't all work for you.

 

[Milkanic]

Check out a guy named Gary Vaynerchuk. Guy is pretty over the top but he has written some books and made millions off wine.

 

[JEdwards]

5) This is one thing that I have on my mind. I brew beer and wine locally at home for my own and family consumption. However, I don't think there is much money made in niche liquors. In my store, I would sell 10 cases of 1.75 cheap McCormick vodka for every one bottle of 1.75 Jack Daniels. Probably the best thing to do would be to have your own vineyard and make wine? Colorado has a few local wine producers and they're pretty popular. Only thing you have to worry about is weather. Especially here in Colorado where weather is pretty hectic.

Thanks for your response.

I have always wondered this about what the difference was in sales between Mccomick and others. 10 cases to every 1 bottle though seems crazy.

Was your store in a lower end side of town?

I don't think I have ever bought MCcormick or even seen a Mccormick bottle at any of my friends houses, even the broke ones.

Seems to me the broker people buy better, cause it makes them feel better.

Neat.

 

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[RDudek]

Rdudek,
you're new, around here, we look for problems to solve and ways to make money, The OP asked about liquor stores, discussion ensued about troubles and problems in owning a liquor store. When you solve trouble and problems you can turn that into a business. My point was to get everyone to see the problems, quit thinking about the store as the moneymaker, and if someone wants to take the time and effort and investigate this maybe it could be something. I haven't been in a liquor store more than a dozen times, but in half a dozen posts several issues were brought up, and the statement was made, every strip mall has one. I just threw some off the top ideas based on the problems presented. Sorry they don't all work for you.

I understand, I just wanted to share personal experience with the type of business and the troubles I've faced with it to help tackle some of the problems associated with it

JackEdwards:

My store was located on a main street in the suburbs. Pretty average middle-income area.

In the 3 years I've owned it, I did notice some pretty heartbreaking things happening. I've seen people who looked pretty financially stable. They would come and buy higher-end stuff. Over time they drop down to middle stuff and then cheap stuff. Alcohol addiction ruined a few people. I had one customer who was morbidly obese that died. It was sad seeing her coming in picking up a pint of McCormick and next day I hear she died of heart attack. She had 2 children.

 

[CommonCents]

I think there is oppty in direct wine shipping from vineyards, perhaps a direct ship home wine party setup that represents several wineries. Bring the Napa wine tasting experience to the consumer. Plenty of wine snobs around to do parties. Buzzed happy vino drinkers, pull out the credit card easier. Direct shipping laws vary by state.

What torques me is cities/states that get into liquor/beer/wine sales. They are in it for the money, not for any interest in protection. Near me I had a long time private liquor store, the city re-did the intersection and made it an act of god to reach the private store, the next year they put a city store across the street in a better spot. The guy had to close down last year.

 

[Amail]

Bev-Mo is pretty fastlane.

 

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[psaco131]

Start a business instead. Retail is a very tough business with low profit margins and isn't worth all the work, plus making money off peoples vices feels pretty shitty. The only retail business I would get into is a grocery store that carries liquor & lottery, but even then you have big competitors (Wal-Mart, Miejer)

 

[Pete799p]

Start a business instead. Retail is a very tough business with low profit margins and isn't worth all the work, plus making money off peoples vices feels pretty shitty. The only retail business I would get into is a grocery store that carries liquor & lottery, but even then you have big competitors (Wal-Mart, Miejer)

Retail is a business that can get huge and make plenty of scratch, it also doesnt have to be tough for the owner. In my area I would not be able to touch a decent grocery without 1mil and the margins are paper thin. Plus walmart is really crushing grocers everywhere. If I was to do it I would try to go for something specialty with higher margins in a nicer neighborhood.

 

[jackpotowner]

I know this is an old thread but opening a Liquor store can be very profitable if opened in the right location, where there are zoning restrictions to prevent your competitor from opening a store right next to you.

I can safely say that if you have a prime location and have a large store front and wide variety in selection, you will do more than fine. In the liquor business, your profit is made in buying. You need to have the buying power to negotiate lower prices and larger profit margins. I opened a 2nd one in September 2011. Within 1.5 years of opening, it is grossing on average six figures a month. Our store is located in a largely hispanic area so we carry a lot of variety catered to that niche as well. If someone wants a product that we do not have, we will order it, even if it's for a single person. I just wanted to clarify here since some of the posts seem to imply that it's not a profitable business. We make on average 28% margin on our sales, but then again I have that kind of buying power as I buy for two stores combined, hence I can buy 100 cases of Bacardi to get the deal I want. If you have any other questions, I would be more than happy to answer them.

 

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[Pete799p]

I know this is an old thread but opening a Liquor store can be very profitable if opened in the right location, where there are zoning restrictions to prevent your competitor from opening a store right next to you.

I can safely say that if you have a prime location and have a large store front and wide variety in selection, you will do more than fine. In the liquor business, your profit is made in buying. You need to have the buying power to negotiate lower prices and larger profit margins. I opened a 2nd one in September 2011. Within 1.5 years of opening, it is grossing on average six figures a month. Our store is located in a largely hispanic area so we carry a lot of variety catered to that niche as well. If someone wants a product that we do not have, we will order it, even if it's for a single person. I just wanted to clarify here since some of the posts seem to imply that it's not a profitable business. We make on average 28% margin on our sales, but then again I have that kind of buying power as I buy for two stores combined, hence I can buy 100 cases of Bacardi to get the deal I want. If you have any other questions, I would be more than happy to answer them.

Thanks for reviving this thread. Its kind of funny because I found my self looking at liquor stores for sale again the other day and contemplating it, there are a few that seem priced right and look to have good locations. Did you buy an existing store for your first one or did you start new? Also what are your hours like? I know with these kinds of businesses the issue is always keeping it open late and controlling employee theft.

Thanks

 

[jackpotowner]

Thanks for reviving this thread. Its kind of funny because I found my self looking at liquor stores for sale again the other day and contemplating it, there are a few that seem priced right and look to have good locations. Did you buy an existing store for your first one or did you start new? Also what are your hours like? I know with these kinds of businesses the issue is always keeping it open late and controlling employee theft.

Thanks

Both were started from scratch and both are doing fine now. I don't put that many hours in the first anymore, except for ordering, checking how much we need every week or if we're short on something etc. So that takes up 10 hours, give or take a few. This is after five years though.

My hours for the second one, since I had a lot of cash strapped to it were pretty rough initially tbh. 12 hour days were the norm, weekends up to 14 or so. That was just for the first year till we really started picking up. Now, I take weekends off for the most part and whenever I feel like it to be honest. I have had several employees in place for the past year and I am ready to promote one to manage full time. It's pretty well set so I really don't have to be there but I am also short one employee to cover more of my hours right now. I just had to fire one because he was stealing some inventory. As you mentioned, that happens sometimes. But if you want to free up your time, you can't worry about theft here and there, even from customers. That's bound to happen. Keep chugging and you'll be able to find reliable employees. We always have two employees at night time working together up till we close so it's more safer that way. Plus we have sixteen cameras around the store with the split screen viewable for everyone.

If I were you, I would recommend going with an established store that may be not be operated at it's full potential. Many owners don't market to fullest extent, ala utilizing social media, promotions, etc. to build customer loyalty and awareness. You may also find some that can't buy in bulk all the time, so their prices might be higher. If you can do that and pass on the savings, you may be able to increase your bottom line. Do your due diligence, and if the numbers are truly what they reflect - then it may not be a bad deal. That's what I plan to do for the next one. Just make sure you do proper DD, as with anything.

Hope this helps.

 

[Pete799p]

Both were started from scratch and both are doing fine now. I don't put that many hours in the first anymore, except for ordering, checking how much we need every week or if we're short on something etc. So that takes up 10 hours, give or take a few. This is after five years though.

My hours for the second one, since I had a lot of cash strapped to it were pretty rough initially tbh. 12 hour days were the norm, weekends up to 14 or so. That was just for the first year till we really started picking up. Now, I take weekends off for the most part and whenever I feel like it to be honest. I have had several employees in place for the past year and I am ready to promote one to manage full time. It's pretty well set so I really don't have to be there but I am also short one employee to cover more of my hours right now. I just had to fire one because he was stealing some inventory. As you mentioned, that happens sometimes. But if you want to free up your time, you can't worry about theft here and there, even from customers. That's bound to happen. Keep chugging and you'll be able to find reliable employees. We always have two employees at night time working together up till we close so it's more safer that way. Plus we have sixteen cameras around the store with the split screen viewable for everyone.

If I were you, I would recommend going with an established store that may be not be operated at it's full potential. Many owners don't market to fullest extent, ala utilizing social media, promotions, etc. to build customer loyalty and awareness. You may also find some that can't buy in bulk all the time, so their prices might be higher. If you can do that and pass on the savings, you may be able to increase your bottom line. Do your due diligence, and if the numbers are truly what they reflect - then it may not be a bad deal. That's what I plan to do for the next one. Just make sure you do proper DD, as with anything.

When purchasing an existing store what would be some reasonable terms for the inventory financing as well as industry standard down payments etc. I am curious because I would be looking to purchase the most profitable store I can afford and the inventory is always a large chunk. Also how did you end up getting into this business, previous experience etc.

Thanks for the great info.

 

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[ClarkWill]

Well, this thread is a little old but hopefully someone will instruct me on right path a little bit.
I'm about to buy an already established liquor store but i also found a good location place for rent that can be transformed into a liquor store, both areas are pretty good with good traffic and visibility. So i have 2 options, either start from scratch or buy the established store. The rental for the place to rent is 5500$ per months and needs all refrigerators / utilities and some rehab inside. Second, the established liquor store was in business for about 16 years, rent is 4500$ per month, gross is discretionary about 620k/year, it is located right on express exit in a populated residential area with many rentals around, owner sells the business for 350k + inventory and it also has a pizza, tobacco licence, alchool licence.
What do you guys think is better choice ?

 

[Trivium iz rC]

Any business can become fastlane. Just like people said In the above statement most of your cash is tied up in inventory. But if you keep the right stuff on the shelves cash won't be a problem because things will keep turning over quickly


Long story short one of my friends dads (Now a mentor of mine) when I was in middle school owned a chain of liquor stores. Started off with 1 now he owns 68 liquor stores. His stores currently only sell Hard Liquor & Wines (No Beer). But he's in the process of adding cigarettes & beer. He ended up doing 750 Million in revenue last year in just hard liquor & wines. He has also hit days when 1 store in 1 day has done over 500k in revenue.

He always tells me "Any business is easy, finding good people & retaining them is the hardest part in business" people will steal, cheat and lie straight to you face. He has gone through countless managers & employee's. But when he finds the right people he pays them very well & treats them before he treats himself.

So is a alcohol fastlane.... I'd say yes. But i'd rather own a brand of vodka and sell it to hundreds of millions of people instead of being a retailer.

 

[AgainstAllOdds]

So is a alcohol fastlane.... I'd say yes. But i'd rather own a brand of vodka and sell it to hundreds of millions of people instead of being a retailer.

It's also insanely harder to start a vodka brand than to buy a liquor store. No matter how fancy your bottle is, and how quality your vodka is, unless you've spent millions on ads, no one is going to buy your vodka. People walk into a liquor store already knowing what kind of vodka they're going to buy.

On the other hand, I've seen people be a lot less selective with cheap wines and champagne ... but then again, your problem lies in getting distribution.

With that said, the number thing I'd look into is a microbrew. Beer drinkers are a lot more open to trying new beers and paying a premium for something unique than someone that's been drinking the same brand of hard liquor for the past 20 years.

 

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[Nevil Jay Bhatt]

Hi,

This is really old and I realize that. I hope someone can here can help me. My father has been in business for a long time and I have learned from him, business techniques and what not. I am looking into investing into a store thats currently doing 1.5 million a year in gross sales. Has about 25% margins. I was wondering if someone here can look at the numbers and such and help me make a good decision?

The real estate is owned. And the price seems reasonable for purchase.

Thanks,
Nevil

Both were started from scratch and both are doing fine now. I don't put that many hours in the first anymore, except for ordering, checking how much we need every week or if we're short on something etc. So that takes up 10 hours, give or take a few. This is after five years though.

My hours for the second one, since I had a lot of cash strapped to it were pretty rough initially tbh. 12 hour days were the norm, weekends up to 14 or so. That was just for the first year till we really started picking up. Now, I take weekends off for the most part and whenever I feel like it to be honest. I have had several employees in place for the past year and I am ready to promote one to manage full time. It's pretty well set so I really don't have to be there but I am also short one employee to cover more of my hours right now. I just had to fire one because he was stealing some inventory. As you mentioned, that happens sometimes. But if you want to free up your time, you can't worry about theft here and there, even from customers. That's bound to happen. Keep chugging and you'll be able to find reliable employees. We always have two employees at night time working together up till we close so it's more safer that way. Plus we have sixteen cameras around the store with the split screen viewable for everyone.

If I were you, I would recommend going with an established store that may be not be operated at it's full potential. Many owners don't market to fullest extent, ala utilizing social media, promotions, etc. to build customer loyalty and awareness. You may also find some that can't buy in bulk all the time, so their prices might be higher. If you can do that and pass on the savings, you may be able to increase your bottom line. Do your due diligence, and if the numbers are truly what they reflect - then it may not be a bad deal. That's what I plan to do for the next one. Just make sure you do proper DD, as with anything.

Hope this helps.

 

[Tanu1234]

Anyone got any experience opening and owning a liquor store? And does it have potential to be fastlane if owning more than one. Please share!

I have one client operating liquor store.

Basically they import items and sell at wholesale in his country. It was good business with decent profit but they have to work very hard and there is so much to manage. They have many employees.




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