A liquor distribution business is a business that buys different brands of liquor from manufacturers and then distributes (sells) to liquor retailers. There are over 1,100 wine distributors in the U.S. today, down from 3,000 in 1995.

Statistics have it that in the United States of America alone, there are about 41,590 licensed liquor distributors and liquor stores responsible for employing about 171,766 employees, and the industry rakes in a whooping sum of $72.5 billion annually. The industry is projected to grow at the rate of 4.5 percent annual growth between 2017 and 2022.

Steps on How to Start a Liquor Distribution Business

  1. Conduct Market Research

If you are considering starting a liquor distribution business, you would need reliable market research to be able to maximize profits from the business. The first step in the market research process for your liquor distribution business should be to develop market-based research questions in line with your overall business goal and objective.

In this regard, you should source for information that will help you maximize your business, give you a reliable clue of what your potential market will be looking out for from a liquor distribution business, and also help you operate your liquor distribution business with less stress.

a. Who is the Target Market for Liquor Distribution Business?
  • Retailers of alcoholic drinks
  • Bars and Nightclubs
  • Pubs
  • Hotels
b. Is Liquor Distribution Business a Profitable Business?

Yes, the liquor distribution business is very profitable. Available data shows that the industry is worth over 72.5 billion U.S dollars.

c. Are There Existing Niches in the Industry?

No, there are no existing niches when it comes to the liquor distribution business because the liquor distribution business is a subset of the wine, liquor, and beer industry.

d. Who are the Major Competitors?
  • Southern Wine & Spirits of California
  • Empire Merchants North LLC
  • Fedway Associates, Inc.
  • Henry Wine Group
  • Youngs Market Company
  • Alliance Beverage Distributing
  • Hardy USA
  • Wine Warehouse
  • NKS DISTRIBUTORS
  • Premier Beverage Company
  • Southern Wine & Spirits of America
  • Glazers
  • Brown Distributing
  • Silver Eagle Distributors
  • Ben E. Keith Company
  • Republic National Distributing Company (RNDC) of Texas
  • Johnson Brothers Northwest Beverages
  • Reliable Churchill, LLLP
  • Liquor Group.
e. Are There County or State Regulations or Zoning Laws for Liquor Distribution Business?

Yes, there are county or state regulations or zoning laws for liquor distribution businesses. In the United States, each state has the authority to regulate the production, sale, and distribution of alcohol within its borders. This means state and local jurisdictions may have their own requirements in addition to federal requirements.

The seventeen states that currently have monopolies and control over beer, wine, or spirits (or some combination) are Alabama, Idaho, Iowa, Maine, Michigan, Mississippi, Montana, New Hampshire, North Carolina, Ohio, Oregon, Pennsylvania, Utah, Vermont, Virginia, West Virginia, and Wyoming.

Please note that Alcohol wholesalers must complete an application for the Wholesaler’s Basic Permit and submit any additional documents, such as a partnership agreement or a corporation’s by-laws and articles of incorporation. Before you can operate your business, TTB must provide written approval of authorization to distribute liquor.

f. Is There a Franchise for Liquor Distribution Business?

No, there are no franchise opportunities for the liquor distribution business, but there are franchise opportunities for liquor stores.

g. What Do You Need to Start a Liquor Distribution Business?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • Distribution Trucks
  • Commercial Driver’s License (CDL) (at least a Class B CDL)
  • Insurance
  • EIN (Employer Identification Number)/Federal Tax ID Number.
  • A Corporate Bank Account
  • IRP Plates
  • Employees
  • Operational Capital (For Ongoing Expenses)
  1. Memorable Liquor Distribution Business Names

  • Leonard Gibson© Liquor Distribution Company, Inc.
  • Drucker Friz® Liquor Distribution Company, LLC
  • Madison Mark© Liquor Distribution Company, Inc.
  • Liquor Solutions® Liquor Distribution Company, Inc.
  • Liquor King™ Liquor Distribution Company, Inc.
  • Liquor Line™ Liquor Distribution Company, LLC.
  • Duncan Grass and Co© Liquor Distribution Company, LLC
  • Liquor Guys® Liquor Distribution Company, Inc.
  • Star Rig© Liquor Distribution Company, Inc.
  • Cornell Donnell© Liquor Distribution Company, Inc.
  • Cruse Team® Liquor Distribution Company, LLC
  • Raphael Ocean® Liquor Distribution Company, LLC
  • Sly Rhodes™ Liquor Distribution Company, LLC
  • Emmy Boston© Liquor Distribution Company, Inc.
  • Sol Dumbbell® Liquor Distribution Company, Inc.
  • Peter Stone™ Liquor Distribution Company, Inc.
  • LIBRIS™ Liquor Distribution Company, Inc.
  • The Chairman© Liquor Distribution Company, Inc.
  • Fidel Martins® Liquor Distribution Company, LLC
  • Liquor Depot™ Liquor Distribution Company, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for Liquor Distribution Business?

Even though there are several options when it comes to the business structure of a liquor distribution business, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits. Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.

b. Steps to Form an LLC
  • Choose a Name for Your LLC.
  • File Articles of Organization.
  • Choose a registered agent.
  • Decide on member vs. manager management.
  • Create an LLC operating agreement.
  • Comply with other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Open a Liquor Distribution Business?
  • General Business License
  • Commercial Driver’s License (CDL) (at least a Class B CDL)
  • IRP Plates
  • FSSAI license
  • Liquor license
  • Health and trade license
  • Lift clearance license
  • Zonal Permits
  • Signage Permit
  • Operational State Facility Inspections for your parking
d. What Type of Certification is Needed to start a Liquor Distribution Business?

You don’t need any certifications to start a liquor distribution business.

e. What Documents are Needed to Open a Liquor Distribution Business?
  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit and Building Approval (For your parking)
  • Certificate of Incorporation
  • FSSAI license
  • Liquor license
  • Health and trade license
  • Lift clearance license
  • Commercial Driver’s License (CDL) (at least a Class B CDL)
  • IRP Plates
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering starting a liquor distribution business, usually you may not have any need to file for intellectual property protection or trademark. This is so because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Liquor Distribution Business?

A liquor distribution business will cost from $50,000 – $600,000 to start and that can easily go higher depending on your overall business goals and objectives.

b. What are the Costs Involved in Starting a Liquor Distribution Business
  • The total fee for registering the business in the United States of America is $750.
  • Legal expenses for obtaining licenses and permits as well as the accounting services totaling – $1,200.
  • Marketing promotion expenses (2,000 flyers at $0.04 per copy) for the total amount of $80.
  • The cost for hiring a business consultant (writing of business plans inclusive) – $4,500.
  • Insurance (general liability, workers’ compensation, and property-casualty) coverage at a total premium – $12,400.
  • The cost of logistics software, accounting software, CRM software, and Payroll Software – $1,500
  • The cost for leasing a warehouse facility (long-term lease agreement) – is $105,600.
  • The cost for facility remodeling and installations – $20,000.
  • The cost for the purchase of distribution trucks and vans: $100,000
  • Phone and utility deposits will cost – ($2,500)
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $50,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $3,150
  • Operational capital – $50,0000
  • The cost of launching an official website – $600
  • Miscellaneous – $2,500
c. What Factors Determine the Cost of Opening a Liquor Distribution Business?
  • The size of liquor distribution business (number of distribution trucks and number of manufacturers you want to distribute for)
  • The choice of location
  • The required licenses and permits
  • The cost of hiring and paying a business consultant and attorney
  • The cost of branding, promotion, and marketing
  • The cost for furnishing and equipping a warehouse facility
  • The cost of insurance
  • The cost for registering the business
  • Cost of recruiting and training your staff
  • The cost for the purchase and customizing of uniforms
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

It is not compulsory to build a new facility for your liquor distribution business, but if you have the required finance, it will pay you to build a parking facility and warehouse.

e. What are the Ongoing Expenses of a Liquor Distribution Business?
  • Gas and lubricants
  • Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
  • Salaries of employees
  • Trucks maintenance
  • Insurance
  • Marketing costs
f. What is the Average Salary of your Staff?
  • Chief Operating Officer (Owner) – $68,000 Per Year
  • Admin and HR Manager – $48,000 Per Year
  • Transport and Logistics Manager – $48,000 Per Year
  • Marketing and Sales Executive (Business Developer) – $42,000 Per Year
  • Accountant $38,000 Per Year
  • Distribution Truck and Van Drivers – $36,800 Per Year
  • Loaders – $28,000 Per Year
  • Customer Service Officer (Receptionist) – $26,100 Per Year
  • Security Guard -$24,000 Per Year
g. How Do You Get Funding to Start a Liquor Distribution Business?
  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for a loan from your bank/banks
  • Source for soft loans from your family members and friends.
  1. Write a Business Plan

a. Executive Summary

Liquor Depot™ Liquor Distribution Company, Inc. is one of Florida’s leading distributors of wine and spirits, representing many of the finest brands in the industry and selling to license on- and off-premise retailers in the state. Liquor Depot™ Liquor Distribution Company, Inc. was formed in 2022 by a team of professionals.

Liquor Depot™ Liquor Distribution Company, Inc. is a member of The Charmer Sunbelt Group (CSG), one of the nation’s leading distributors of fine wines, spirits, beer, and other beverages. A group of privately held companies, CSG operates local distributor and/or brokerage houses in 15 markets: Alabama, Arizona, Colorado, Connecticut, Delaware, Florida, Maryland, Mississippi, New Jersey, New York (Metro and Upstate), Pennsylvania, South Carolina, Virginia, and the District of Columbia.

b. Products and Service
  • Distribution of a wide range of liquor.
c. Mission Statement

Our mission is to establish a liquor distribution business that will distribute a wide range of liquor from top alcoholic drinks production companies at affordable prices to liquor retailers, bars and nightclubs, pubs, and hotels in Miami, Florida, and other cities in Florida where we intend marketing our services.

Vision Statement

Our vision is to become the leading brand in the liquor distribution business in the whole of Miami, Florida.

d. Goals and Objectives

The goals and objectives of a liquor distribution business are to distribute a wide range of liquor from top alcoholic drinks production companies at affordable prices to liquor retailers, bars and nightclubs, pubs and hotels et al.

e. Organizational Structure
  • Chief Operating Officer (Owner)
  • Admin and HR Manager
  • Transport and Logistics Manager
  • Marketing and Sales Executive (Business Developer)
  • Accountant
  • Distribution Truck and Van Drivers
  • Loaders
  • Customer Service Officer (Receptionist)

Marketing Plan

a. SWOT Analysis
Strength:
  • Excellent operational history
  • Attention to detail.
  • Access to some of the leading liquor production companies
  • Experience and trained professionals.
  • Large storage facility.
  • Excellent customer testimonials.
  • Reliable and efficient distribution trucks and service.
Weakness:
  • Not enough clientele to run at full capacity immediately
  • The owner is new to large scale marketing
  • We will need a loan to build our facility and to purchase distribution trucks and vans
  • The owner is currently running the business solo
  • Lack of economies of scale.
Opportunities:
  • Growing liquor consumption in the United States.
  • Build upon existing clientele
  • Online market, new services, new technology, and of course the opening of new markets.
Threat:
  • Loans diminish profitability until they are paid off
  • First-year will be financially tight while we gain customers and pay off loans
  • Competition in the area could increase
  • Management of employees requires time, money, and efforts
  • The transport department could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses.
b. How Do Liquor Distribution Businesses Make Money?

A liquor distributor makes money by buying the product at a low price, then tacking on a dollar amount that still makes the deal attractive to the consumer.

c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via check
  • Payment via mobile money transfer
  • Payment via bank draft
d. Sales & Advertising Strategies
  • Introduce your liquor distribution business by sending introductory letters alongside our brochure to liquor production companies, retailers, bars and nightclubs, pubs, and key stakeholders in and around your city and state
  • Use friends and family to spread the word about your business
  • Place a small or classified advertisement in the newspaper, or local publication about your company and the products you offer
  • Leverage on referral networks
  • Advertise your business in relevant magazines, newspapers, TV, and radio stations.
  • Engage in direct marketing approach
  • Encourage the use of word-of-mouth marketing from loyal and satisfied students
  • Join local chambers of commerce and industry to market your services.

Financial Projection

a. How Much Should You Charge for your Service?

Most liquor distribution businesses charge based on the quantities of goods distributed.

b. How Much Profit Do Liquor Distribution Business Owners Make a Year?

It depends, but available reports show that on average, the distributor typically needs to make 25 to 30 percent gross profit when they sell it to the retailer. Hence, a liquor distribution business should net more than $110,275 per year assuming steady clientele.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the liquor distribution business (number of distribution trucks owned and number of liquor production companies you are distributing for)
  • The types of related services and products offerings (warehousing and advertising et al)
  • The location the liquor distribution business is covering
  • The management style of the liquor distribution business
  • The business approach of the liquor distribution business
  • The advertising and marketing strategies adopted by the liquor distribution business.
  • The number of years the liquor distribution business is in business
d. What is the Profit Margin of a Liquor Distribution Business?

The profit margin of a liquor distribution business is not fixed. It could range from 25 percent to 30 percent.

e. What is the Sales Forecast?

Below is the sales forecast for a Liquor distribution business. It is based on the location of the business and other factors as it relates to such startups in the United States;

  • First Fiscal Year: $520,000
  • Second Fiscal Year:  $780,000
  • Third Fiscal Year: $2 million
  1. Set Up your Office

a. How Do You Choose a Perfect Location for Liquor Distribution Business?
  • The demography of the location especially as it relates to alcohol consumption
  • The purchasing power of businesses and residents of the location
  • Accessibility of the location
  • The number of liquor retailers, bars and nightclubs, pubs and hotels, and liquor retailers in the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al
b. What State and City are Best to Open a Liquor Distribution Business?
  • Las Vegas, Nevada
  • Los Angeles, California
  • New York City, New York
  • Washington, D.C.
  • Scottsdale, Arizona
  • Asheville, North Carolina
  • San Francisco, California
  • Washington DC
  • Chicago, Illinois
  • Dallas-Fort Worth, Texas
  • Boston, Massachusetts
  • Palm Beach, Florida
c. What Equipment is Needed to Operate a Liquor Distribution Business?

You should be prepared to purchase forklifts, loaders, pallets, crates et al. You will also need computers or laptops, internet facility, telephone, office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.

  1. Hire Employees

When it comes to hiring employees for a standard liquor distribution business, you should make plans to hire a competent chief executive officer (you can occupy this position), admin and HR manager, transport and logistics manager, marketing and sales executive (business developer), accountant, distribution truck and van drivers, loaders and customer service officer (receptionist).

  1. Launch the Business Proper

You can choose to announce the opening of your liquor distribution business by organizing an opening party, but this is not mandatory. This is because you need to focus all your strength and finance on finding liquor manufacturing companies that you can start distributing their products.

a. What Makes a Liquor Distribution Business Successful?
  • Choose a good location and reliable distribution trucks and vans to launch the business
  • Partner with leading liquor production brands
  • Hire only competent, hardworking, and trustworthy staff
  • Be deliberate with your marketing sales approach
  • Encourage the use of word of mouth to promote your liquor distribution business
  • Leverage on all available online and offline platforms to promote your liquor distribution business
b. What Happens During a Typical Day at a Liquor Distribution Business?
  • The business is open for the day’s work
  • The distribution trucks are washed, cleaned, and ready for deliveries
  • Liquors are loaded from the warehouses of liquor production companies
  • Goods are distributed to customers
  • Schedule maintenance of trucks are carried out
  • Marketing/website upkeep
  • Supply ordering
  • Administrative duties
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Liquor Distribution Business?
  • Good driving skills
  • Customer services skills
  • Interpersonal skill
  • Logistics and material handling skills
  • Business management skills
  • Bargaining skill
  • Work experience in the transport and logistics industry
  • Experience in managing people
  • Experience in business administration
  • Experience in handling distribution, logistics, and transportation software.