Starting An Online Liquor Store: Requirements and Best Practices

Posted 2 years ago by Max Komonov

Can you sell alcohol online? This is a question that many aspiring entrepreneurs have asked in recent years. As more and more people shop online (over 2.5 billion and still growing), businesses are seeking new ways to adapt. Online food retail has already been a trend for several years. But the online liquor market is not quite as large. That means there is opportunity out there for business owners.

To answer the initial question: yes, it is legal to sell alcohol online. There are certain legal requirements that vendors must meet, of course. But, beyond that, the process of starting an online liquor store is not too complicated. If you are interested, here’s everything you need to know about how to start an online liquor business.

What Are the Legal Requirements for Starting an Online Liquor Store?

Any business that intends to sell alcohol must acquire a liquor license. Liquor licenses in the U.S. are issued by individual states, and each state has its own legal requirements. You can find a basic overview of the state-by-state requirements here.

Regardless of what state you are in, a few things remain consistent when applying for a liquor license. First and foremost is the distinction between an on-license and an off-license.

An on-license is assigned to a business that sells alcohol to be consumed on the premises. And an off-license is assigned to a business that sells alcohol to be consumed elsewhere. As an online liquor store owner, you would be required to get an off-license.

What Documents Are Required to Apply for a State Liquor License?

While state laws may vary, some requirements are fairly standard when applying for a liquor license. Some of the documents and information you should prepare include:

Business license or certificate of incorporation
Health license
Sales tax permit
Inventory/menu proposal

Again, the requirements may vary from state to state. But it never hurts to provide as much useful information as possible when applying for a license. At the very least, you should have your business license before attempting to apply for a liquor license.

Choosing What To Sell At Your Online Liquor Store

As with any retail business, narrowing down what to sell will be very important to your business plan. Offering a wide selection of alcoholic beverages is not a problem. But, particularly early on, budgets can be tight. It is often easier to start with a more limited inventory before attempting to branch out. But, to stand out, many online vendors will choose to specialize in a certain niche. As an online liquor store, your business could choose to focus on carrying a wide selection of a certain drink type.

Beer

Beer is the most widely-consumed alcoholic drink type in America, with men heavily favoring the beverage. The rise in craft beer brewing has reinvigorated the market in recent years, creating more variety and competition among products.

The advantages of selling beer are that it’s relatively inexpensive and always in high demand. However, there is a tradeoff for both of those factors. It can be harder to stand out from the competition when beer is your primary focus. Additionally, beer has a lower price point than other drinks.

Wine

Wine is also in high demand, though not consumed quite as much as beer. Prices for wine tend to vary based on product quality. But, in general, wine has a higher price point than beer, so it can lead to higher profits. There is also less competition in the online wine market, which can help your business a lot when starting out.

Spirits

Spirits, like whiskey, vodka, and gin, are the third primary category of alcoholic drinks. This category is more broad than the other two, meaning there is greater variety. Many spirits, particularly whiskey or bourbon, are in relatively high demand and can be sold at a high price point. Specializing in carrying a wide range of spirits can be a good way to stand out from the competition while also making good profits.

However, the tradeoff when selling spirits is that the market may not be quite as robust as beer or wine. Additionally, it can be more expensive to keep your inventory stocked with fine spirits than other drink types.

How to Start an Online Liquor Store: Setting Up the Business

Once you have your liquor license and know what to sell, it’s time to get your business set up. While there are several steps involved in this process, including writing a business plan, we will focus on two key elements. Those are choosing your supplier(s), and creating a website.

Choosing Supplier(s)

Most online retailers can choose between two business models when it comes to supplying their inventory: dropshipping, and wholesale.

Dropshipping is an arrangement in which the retailer (you) facilitates purchases between the manufacturer and the end consumer. You do not need to worry about keeping your inventory stocked or fulfilling orders with dropshipping. Instead, you simply list items on your website and pay a small fee to the manufacturer when a customer buys from you.

When using a wholesaler, the retailer buys their inventory in bulk from a manufacturer or distributor. In this arrangement, you are usually responsible for item storage and shipment. This gives you greater control over your inventory and customer service. However, there is a greater upfront cost.

Creating a Website

For many new business owners, the prospect of building their online store may seem like the most daunting task. But entrepreneurs can easily sign up for and use ecommerce platform store builders to simplify this process significantly. Using Ecwid’s ecommerce platform, for instance, business owners can quickly and easily customize their website, or add an online store to an existing website.

Using an ecommerce website builder provides access to all of the tools necessary to build an excellent online store. For example, features like product displays, easy checkout, and multiple payment options can all be added to your website with ease.

Want to learn more about how Ecwid can help your online store? Read about some of our shipping features that can help improve your customers’ experience.

About The Author

Max has been working in the ecommerce industry for the last six years helping brands to establish and level-up content marketing and SEO. Despite that, he has experience with entrepreneurship. He is a fiction writer in his free time.