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Written by : Orval Collen |
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hey guys it's charles here liquor ceo uh it's been a hot minute since i put some content out uh so i'm back at it uh really took some time to you know tread water a little bit and see how covered was going to impact the marketing of brands uh the logistics of new brands uh how it's going to change the consumption of brands how hard it's going to be to get into distribution there's just a lot of changes that were coming down the pipeline and i really wanted to take my time to sit back and be in it but to really absorb it and understand what was going on so i could come back with some relevant content uh for you guys we've had a lot of inquiries recently over the past several months uh folks wanting to get into the space understandably so listen the liquor business is first and foremost a business it's it if you want to do a hobby that's fine you can do your craft little breweries your little craft distilleries or your little craft wineries you know on the side at home that's fair but you know honestly i'm i'm more focused on the business aspect of this industry so if you're looking to really get into this space understand that it is a business first and foremost so what i've noticed a lot about calls lately is there's really a lot of misunderstanding and confusion about what does it take financially to get into this space and i broke it down to three buckets there's brand development uh there's buying your initial inventory that you're going to sell and there's the marketing and activation of this inventory in a market or a series of markets as part of that distribution plan i'm gonna give you just cut you some real talk here if you're not looking at upwards of seventy five thousand dollars to just develop a brand and you're really kind of missing the boat here uh there are firms that will do this uh for uh sets amounts of money and and that's that's great you know um my opinion and and i've done this for several brands that i personally own and i've done this for several brands that i have nothing to do with in terms of equity but i am an alignment partner with them in terms of developing these brands and taking them to market and i know for a fact that my brands are well into the six figures uh in just in development there are other brands that get very close to 100 000 in terms of the overall cost just to develop the brand uh so you need to really be looking at 50 to 75 000 just to develop the brand you know that includes legal trademarking all your agreements with your alignment co-packing partners distillery partners everything like that but i want you guys to have some real talk here i don't i don't want you to think that this is a 5 000 project because it is not uh in my opinion if you really want to make a stink in the liquor business with a brand that can be taken seriously and have a legitimate shot at at making a business out of this you're looking at like i said 50 to 75 000 easy in terms of your inventory you know you need to you need to figure out you know how much you're going to need and that's going to be based upon how many markets you want to to launch my opinion is that for a new brand unless you've got some serious seven figure legs to really kind of capitalize on and to turn to as a resource you need to be looking at one to two markets to debut for proof of concept to really iron out the kinks and to understand the nuances of what it's going to take to actually activate a brand depending on the type of product or spirit you're working on that can be anywhere from you know 5 000 to you know 10 to 12 000 bottles just to start that is variable as well because if you have a very aggressive marketing campaign you could do you would need a lot more so for instance i'm working on an rtd right now uh we have 9 000 cases and each case has 24 cans in it so there's 9 000 cases and that's 132 pallets of product and that's for three markets and and there's an ongoing conversation about is it going to be two or is it going to be three just to make sure that conservatively we have enough inventory to handle that at those costs you're very rapidly in in an rtd space you're very rapidly looking at getting into the few hundred thousand dollars of inventory just in the rtd space in a canned i'm sorry in a bottle product say a vodka i would probably say you're looking at you know 65 75 000 you know depending if it's a domestic or an imported product um of which there's a lot of that's going to be excise tax so or you know the liquor tax depending upon the spirit your tequilas can get you upwards into you know 10 12 15 a bottle cost per bottle so you're looking at 120 000 right there just to have a full 40 foot container of that brought across so i think you need to to understand that these numbers very quickly just for that product inventory piece can get up over a hundred thousand dollars really quick the marketing and activation and branding uh the the the activation and the launch and the debut debut of that product in a market again um i've had market research just to really understand who we're talking to and how to talk to them and understand their attitudinal and behavioral patterns that can get you up into the six figures very easily too uh i don't necessarily think you need to have that for every category and and the quality of the firm that you align with will if they're actively debuting products and brands in that category will have this information on hand that they can repackage repurp for you uh we we have a vodka tequila we have a rum we have uh irish craft beer we have mead we have a mescal we have gin we have several categories we have cognac we have several categories that we're actively working on so we have uh nuanced market research for those spirits those categories so there might be some fine tuning to figure out if your brand's a more youthful brand you know that we may need to skew that down if the brand i'm working on tends to skew a little bit more millennial versus you know gen x versus you know really young gen z so we really want to understand that but you need to accrue some money for the marketing and activation and that's just the study for the research or for the actual plan to actually activate do events samples tastings promos incentives quality discounts you know very easily uh i like to tell people ten to twenty thousand dollars per month per market uh that to me is uh a reasonable uh and it can maybe can vary up and down just a little bit but that's going to get the attention of the distributors and really get them to understand that you know if complement that with a with a good plan that you know what you're doing you have the legs to do it and you're serious about your brands one final note here is that i think it's very important that your brand and products are dominant in your hometown as a founder you need to own and put the flag in the ground in your turf and because if you go to another market another city another distributor in another state they're going to ask well how are you doing in your hometown or your initial launch market if you don't own that i i personally think you're f
Thanks for your comment Truman Seelbinder, have a nice day.
- Orval Collen, Staff Member
hello welcome to shawn academy today in this video we're going to learn how to start an alcohol business my name is james and i will be your business consultant in this video now before we start an alcohol business let's take a closer look at what goes into starting one and how we can make yours profitable people are enthusiastic about alcoholic beverages creating a lucrative market for liquor entrepreneurs if you want to start a business selling spirits wine or beer you should be aware that obtaining licenses and permits may be your most difficult challenge after securing funding then it's all about building your brand and attracting a devoted following of restaurant buyers bartenders and customers if you've been thinking about starting a liquor company you've probably developed some strong preferences for various types of alcohol choosing your favorite spirit such as rum gin vodka or whiskey is one way to combine your love of tasty drinks with a way to earn money on the other hand it may make sense to conduct some research to determine which type of liquor can be produced most profitably while also having the greatest appeal to your consumer base to operate all businesses must obtain government permits and licenses businesses that manufacture or sell controlled substances such as alcohol are frequently subjected to extremely stringent regulations and layers of red tape working with an attorney who is familiar with liquor startups will ensure that you comply with all laws and regulations you'll need to apply for a permit from the alcohol and tobacco tax and trade bureau on the federal level state regulations vary but you should expect to need a business license as well as separate licenses and permits to manufacture spirits ship products directly to consumers or own a still similar laws may exist at the local level as well the types of permits you require can be determined by your local liquor control board you will need to work with your local government to obtain permits for your business facilities including approval from your local health department in addition to obtaining permits for business and liquor specific authorizations early in the startup process determine what types of licenses and permits you'll require as well as the cost of obtaining these permits you can't open a liquor store without the necessary permits and the application process can be time consuming you'll be able to plan your debut better if you know the cost and timeline for licensing and permitting you are not the first or the last liquor entrepreneur what distinguishes the spirits wine or beer you bottle what is the back story of your company develop your brand including its logo and product labels in collaboration with branding experts and graphic designers you'll need to decide whether you want to outsource or handle your own manufacturing as you develop your business plan outsourcing the production of your products can help you save money in the short term and avoid the headaches that come with trying to obtain permits for breweries wineries or distilleries furthermore the experienced staff at these operations can assist you in avoiding costly errors that can delay or even prevent the launch of your business many people however start businesses because they enjoy doing things themselves developing your own production facility is an option if you want complete control over the production of your products you will have more control over the quality of the liquor you produce and it will be more profitable because you will not be paying a third party to do this work for you third-party manufacturers may also be able to handle distribution for you which can be beneficial when you are just getting started in the market inquire about potential suppliers distribution capabilities one of the most difficult aspects of growing your business is distribution working with bartenders in the early stages of your startup can help you get feedback and hopefully persuade their employers to stock your products according to some experts renting a booth at a trade show and participating in local promotions can also help you launch your new business if you found this video useful please show your appreciation by clicking the like button also let us know in the comments if you'd like us to make a long comprehensive follow-up video to learn more about how to start an alcohol business also don't forget to click the subscribe button to see more videos from sean academy an extension for education
Thanks Nikita your participation is very much appreciated
- Orval Collen
About the author
I've studied ecology at Lebanon Valley College in Annville and I am an expert in probability (outline). I usually feel restless. My previous job was mining machine operator I held this position for 21 years, I love talking about kart racing and herping. Huge fan of Olivia Colman I practice badminton and collect postmarks.
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