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Elite
08-13-2010, 01:53 AM
Hello everyone!
I am looking for someone to share their experiences and knowledge. I decided to start a liquor store in Georgia. I already know what it takes to open a liquor store as far as permits and lisences I need to obtain from the state and my county. I also went to a training on laws and regulations specific to GA alcohol sales and started to write a business plan with the help of SCORE.
I have some startup capital, but not sure if I will have to also borrow a little more. My problem is not knowing what are wholesale pricing on alcohol are. Distributors do not provide their prices unless you already have a liquor license and create an account with them. So how do I figure out what my initial inventory will cost me?
I know about other expenses to include license cost (over $5000/year in GA), rent and utilities, insurance, security system, equipment (shelves, coolers, cash register, computer). Is there any other fixed or variable expenses that I am forgetting about?
If I cannot figure out wholesale prices, then is it possible to figure out the markup? I am pretty sure that no one of my local liquor store will be willing to give me this information so I am hoping there is someone on this forum that will be able to help.
Thank you everyone! =)

Spider
08-13-2010, 09:10 AM
Go to a liquor store as close to home as possible but far enough away that your new store will not be competition. Tell them that you are starting a liquor store in X-town, miles and miles away, and would they please help you with some figures? They know you cannot get the information you want from the suppliers, and if you are no threat to them, they have no reason to not help you.

Alternatively, ask a salesman at the suppliers for rough estimates. They know you cannot get the exact information from their company but if you get started in business you could be another account for them. They have an incentive to find a way to help you within the framework of their own restrictions.

Alternative: local bars buy liquor, too. They may not pay the exact same price as a liquorstore but they will likely be able to give you a good approximation. They may even know what liquorstores pay. Hotels, too, might be a source.

I hope this helps.

Harold Mansfield
08-13-2010, 04:45 PM
Not sure how liquor is purchased in Georgia, for instance in Michigan it is all state controlled so there is one catalog. In NV there are many distributors so there are many catalogs.
I would try and get a hold of those catalogs so that you can see wholesale pricing.

If you don't have any luck and don't want to to ask other store owners, then talk to the distributors..they are likely more willing to help you since you will be a future client especially if it is not state run and multiple distributors can carry the same items.

Elite
08-13-2010, 05:03 PM
I very much appreciate your responses. I will go ahead and try to call a few distributors as see if they will willing to at least provide me with an estimate cost of my initial inventory.

Is there anything else I am missing as far as general business expenses? No necessarily liquor store specific, but overall.

Patrysha
08-13-2010, 05:25 PM
Marketing and Events Budget...don't see that in your list...

Harold Mansfield
08-13-2010, 05:45 PM
I very much appreciate your responses. I will go ahead and try to call a few distributors as see if they will willing to at least provide me with an estimate cost of my initial inventory.

Is there anything else I am missing as far as general business expenses? No necessarily liquor store specific, but overall.

They won't be able to provide you with an estimate. All you need is a price list. You will have to figure out your inventory on your own, there are too many variables such as how much storage, shelf space, cooler space, and what products you want to carry, in what sizes.

You will also need price lists from other distributors that carry things like sodas and mixers, basic bar supplies like napkins, straws and cups and other products commonly found in liquor stores that help keep the register ringing.

I didn't see mention of any employees so I assume you plan on running it all hours 6-7 days a week.

Elite
08-13-2010, 05:51 PM
I'd like to start it as a family business as first. In GA no alcohol sales on Sundays, so yes, I will be running it 6 days a week all hours with the help of my family.

What business are you in, eborg9?

Patrysha, thanks. I will add marketing to my list. I knew I had it in the back of my head =)

Patrysha
08-13-2010, 06:08 PM
It doesn't have to be a large amount if you are creative. The most important things are making sure the in-store experience matches whatever marketing you do undertake...whether it is flyers, radio, online marketing (facebook, twitter, website), customer rewards/frequent buyer/referal program or whatever...it's going to be your interior display and design, signage, cleanliness and customer service that are going to actually bring customers back and to bring their friends :-) There are tons of fairly inexpensive things a liquor store can do to attract traffic :-)

Harold Mansfield
08-13-2010, 06:14 PM
I'd like to start it as a family business as first. In GA no alcohol sales on Sundays, so yes, I will be running it 6 days a week all hours with the help of my family.

What business are you in, eborg9?


I provide Wordpress Website Services and Consulting now, but I spent 18+ years in the Bar, Restaurant and Nightclub business in Las Vegas, Florida, and Michigan and remember how things worked behind the scenes dealing with different distributors, opening inventories, employees, different laws, and in Vegas you can add gaming to the list (Poker machines).

Elite
08-13-2010, 06:27 PM
eborg9, as you can probably tell I have 0 experience with liquor retail. A lot of people say that it's best to go work for a liquor store before going into business to get much needed experiense and I agree, but I believe that doing research and talking to the right people will do the job for me.
I read that a lot of wholesale distributor's won't even talk to someone "who doesn't speak the language". Is there a special way of talking to distributor's sales representative?

Harold Mansfield
08-13-2010, 06:50 PM
eborg9, as you can probably tell I have 0 experience with liquor retail. A lot of people say that it's best to go work for a liquor store before going into business to get much needed experiense and I agree, but I believe that doing research and talking to the right people will do the job for me.
I read that a lot of wholesale distributor's won't even talk to someone "who doesn't speak the language". Is there a special way of talking to distributor's sales representative?

I would have agreed that working the business would have been preferable, but if you got the funds, have done the research and believe in yourself then I say go for it.

As far as talking to distributors, accounting for any cultural differences in the business in GA compared to NV..don't take everything that they tell you as gospel.

Their job is to get you to stock product and they push harder to sell newer items or items that aren't moving.

In my experience they will offer incentives or try to package dead weight products with popular products to get them out of their warehouse or get them on more shelves...sometimes it's a good deal. Other times you end up spending more money on crap that was never going to sell anyway.

Just starting out I recommend that you do more research and plan to carry the products that are no brainers..stuff that you know is going to sell regularly, before you dive into specialty and boutique stuff.

You of course have to give a certain amount of leeway depending on the demographic of the area that you are serving, which is why stores in poorer areas carry every brand of malt liquor in 40 oz bottles that they can stuff into the cooler while other stores in middle class areas don't sell more than 3-5 brands...and have coolers filled with imported beer and microbrews.

Distributors are salesman. If you happen to be in a place where each product is only handled by one distributor then you have to watch your P's and Q's, but if there is fair market competition and 3 different distributors can carry Jack Daniels, then you will have to shop around to get an overview of who is best for a multiple products, not just one.

Common tactics:

"Buy a case of this crappy liquor that no one has ever heard of and I'll give you 10 percent off of a case of Seagrams 7" - and then you are stuck with a case of crappy liquor that never sells.


Only selling certain items by the case, such as Galliano, which will probably take you 3 years to sell 12 bottles.


Fighting for shelf space in your store. Make sure you control it. Premium placement deserves premium consideration on the pricing or some other consideration.


If in doubt about carrying new items, follow the advertising in your demographic. People really do try and buy stuff that they see on T.V, promoted by their favorite celebrities, or plastered on a NASCAR...which means that you have to pay attention to what is being mass marketed and to whom they are marketing it to.

If you have never seen any marketing for it, don't let them talk you into carrying it. Don't stock up on a rapper's new Vodka line if you aren't in an area where people listen to, like, or even know who it is.

A good distributor will offer you sound advice, help with point of sale displays, and take an interest in your businesses success.
Remember, these guys sell to all kinds of liquor businesses in every demographic...their job is to move product, they are not marketing or business consultants.
Just because a store across town is blowing out a certain product, doesn't mean that you will have the same results..follow your demographic and listen to them.

Just remember that distributors need you. You are their customer and you are spending money on their product. Not the other way around.

I just wanted to add:
The hardest reps to deal with are one that are the only game in town. For years out here, a certain Energy Drink had the worst reps because they distributed their own product, they didn't go through a middle man. They were indifferent, many times unavailable, overpriced, and downright rude and as a result, many bars, and nightclubs just stopped carrying the product.
Just remember that you are in charge,
The only "language" that need be worried about is dollars and cents.

wlaxyfamily
08-19-2010, 10:44 AM
Hey, I am looking to do the same thing in the Marietta area? Is this anywhere near you?? I have a lot of the same questions and I don't think I have gotten as far as you have on the planning, etc. I would like to see if we can compare notes and maybe help each other out. Thanks.

shayla
11-22-2011, 05:54 PM
Hello! It is now Nov 2011. Did you start your liquor store? I hope so. I am thinking of starting one in TN....would like to know if you had success. Thanks, Shayla

billbenson
11-22-2011, 07:24 PM
I'm the same distance from an ABC Liquors (large chain in FL, not sure if they are national) and a family owned and run liquor store. I pretty much buy at the most convenient one at the time, but the small business one is quite a bit more expensive.

I talk business with the owner of the small one. No details, but it seems like a hard low margin business.

jrozi
09-13-2012, 04:23 PM
Hi Elite,

Im considering trying to open a liquor store in SC. Im running into the same issues as you were. Any additional pointers on how to get some pricing?

kimoonyx
09-15-2012, 03:28 AM
Hi,

I have been consulting small business startups for some time. I pay for several reports and am seemingly always providing margin data for different businesses. For your direct question I have some very direct data that may interest you. for the years 2008 and 2009 I have National Average Margin numbers on Liquor and wine sales in Convenience stores. I purchased this information from convenience store news and obtained permission to share the info purchased in 2011 as it became a few years old, because250 the same organization in terms of parent company has sold me dozen of reports for other industries. I would like to provide a disclaimer that every market is different, and a reminder that these are convenience store numbers, and I am willing to bet your margins would be slightly higher in a specialty store. But here is some hard data for you... I hope it helps...