How to Start a Liquor Delivery Business – and Make Money with It?

Did you know that the global alcoholic beverages market size, valued at USD 1,643.24 billion in 2023, is projected to reach USD 2,105.53 billion by 2032, growing at a CAGR of 3.15%?

While this stat may be tempting enough for you to venture into the alcohol delivery service industry, it is crucial to understand that alcohol delivery needs much more than meets the eye, setting it apart from other delivery services. 

 This is because alcohol delivery is a heavily regulated industry that requires you to plan and coordinate multiple aspects, including ensuring legal compliance, obtaining necessary licenses and certifications, hiring professional delivery partners, and ensuring excellent customer experience.

If you are looking to start your own alcohol delivery business but don’t know the right approach, this blog is for you. It guides you through the steps to start a local alcohol delivery business and explains how to succeed in this booming industry.

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7 Steps to Start an Alcohol Delivery Business

As mentioned above, starting your own alcohol delivery business involves creating a well-thought-out business plan while ensuring compliance with local alcohol delivery regulations.

So, below are the steps that you can follow to start and boost the likelihood of a successful alcohol delivery business.

1. Ensure you stay legally compliant

If you want to start your own alcohol delivery business locally, you must find out if it is legal in your region. There are no national-wide laws regarding liquor delivery services; the business is rather governed by state-specific laws.

So, you will need to investigate your state laws to see if any alcohol delivery is legal. If you are luckily from one of the states that allow alcohol delivery, your next step will be obtaining the required licenses to deliver beer, wine, and liquor. You’ll probably want to bring your lawyer into the discussion at some point.

2. Develop Your Business Model

Once you know you can start a home alcohol delivery business or liquor subscription service, it’s time to develop your business model. This should describe exactly how you’ll do business:

This should describe exactly how you will do your business by determining the following:

  • What spirits will you deliver
  • Where and how will you purchase the liquors you sell
  • How will you sell alcoholic beverages – via a liquor delivery app or website
  • How will you meet the demand for liquor products
  • How will you generate revenues, and will you charge pickup/delivery fees, processing fees, subscription fees, etc.?

You should also consider using additional revenue-boosting strategies, such as selling premium subscriptions for same-day alcohol delivery and loyalty discounts. 

3. Determine whether you will use a third-party service or do it by yourself

When you plan to start an alcohol delivery service, determining how you will implement online delivery services is also crucial. You can consider two options: hiring your own delivery drivers and maintaining your own fleet of delivery vehicles or contracting with services, such as DoorDash or Minibar, to deliver what you sell.

The first option involves the high upfront costs of handling alcohol deliveries yourself and may be challenging if you have tight budget constraints. However, it can help you have full control over your delivery mechanism and ensure a top-notch delivery experience from day one.

The second option provides you with full delivery capability on day one, is easier to scale as your business grows, and doesn’t require a huge upfront investment. However, you may need to pay a heavy commission fee, have limited control over their delivery mechanism, and risk losing a customer for a bad delivery experience that you aren’t directly responsible for.

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4. Estimate your startup and operating Costs

This is a crucial step before you start a liquor delivery service business. It includes determining the start-up expenses that you may need to bear upfront. 

These costs include:

  • Purchasing liquor delivery drivers
  • Developing a website and liquor delivery app (if you are interested in setting up your own online liquor store that accepts orders)
  • Acquiring all the necessary licenses and permits you need to ensure legal compliance
  • Creating an inventory of alcohol products
  • Finding and hiring alcohol delivery drivers
  • Renting a warehouse for stocking your inventory (in case you don’t have a physical store already)
  • Obtaining different types of insurance, including commercial auto insurance, general liability insurance, and liquor liability insurance
  • Equipment required for order processing and fulfillment

While these costs are often one-time and fixed, operating costs are often recurring and keep varying based on market conditions, fluctuations in demands, and even geopolitical factors. It is also worth noting that some costs, like rent form a part of both start-up as well as operating expenses.

However, some common examples of operating costs involved in a liquor delivery business are: 

  • Software subscriptions
  • Inventory replenishment
  • Alcohol delivery driver payroll and commissions
  • Vehicle maintenance and fuel costs
  • Rent and utilities
  • Marketing and advertising
  • Insurance premiums
  • Accounting, legal, and consulting
  • Contingency funds

5. Purchase Inventory and Supplies

You should identify your suppliers as a part of your business plan. As you get closer to activating your website, you will need to stock all the products and supplies you need to fill customer orders.

If you run an existing liquor store or dining establishment, you probably already have inventory but might need to-go packaging. If you’re starting your alcohol delivery business from scratch, you will need to set up contracts with suppliers who provide all the items you intend to sell.

6. Rent Your Facilities

Hardly any liquor delivery business can operate from home. This implies that you must look for storage space to store your inventory. If you are already operating a physical alcohol store and setting up an online liquor store, you can skip this step. If not, you may need to research and find facilities in your area to operate out of.

Having a physical store is slightly more beneficial as it eliminates the need to rent an expensive, high-visibility retail space. Depending on your local zoning laws, you may be able to operate out of cheaper facilities in an out-of-the-way business park or something similar that is enough to accommodate your inventory and staff.

7. Get a Delivery Route Planner

When it comes to the private liquor delivery business, a delivery route planner like Upper plays a significant role in managing the delivery process. From finding cost-effective delivery routes to delivering the parcel on time, Upper assists you in achieving your desired business goals. 

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6 Primary Advantages of an Alcohol Delivery Business

Is there money to be made in liquor/alcohol delivery businesses? Yes, there is.

According to IBISWorld research, online wine, beer, and liquor sales in the U.S. comprise a $983 million industry. The online liquor delivery market is growing by 11.6% year over year, yet it still represents only 1.8% of all alcohol sales. In short, home liquor delivery is growing, but there is still plenty of room for growth.

In short, home liquor delivery is big and getting bigger but still has lots of room to grow.

1. Desired profit margin

Alcohol delivery businesses usually have a better profit margin as they require less effort than preparing food. Offering liquor delivery to the customer’s doorstep can help you accomplish your financial goals. When you provide a customer’s favorite liquor drink via an online alcohol delivery business app, you are likely to increase the customer base and provide elite customer expectations.

2. Greater customer scope

Online alcohol delivery is not limited to your business area; it can be expanded to other states and countries as well. Liquor businesses have the potential to attract regular customers who can provide stable income to your business. Hence, there will always be a good customer scope in this business.

3. Better inventory management

If you are offering a home delivery service of alcoholic beverages, you can get an overview of your orders using an online ordering system. It can help you track consumer product delivery so that you don’t overspend on inventory. You can encourage your buyers to go after your products in one go using alcohol delivery apps.

4. Higher Customer Retention Rate

One of the biggest benefits of performing alcohol delivery is that you get more customers in a short time. Also, there are high chances that your customer base may turn into repeat buyers. This will boost your retention rate, and your business may flourish. This means won’t need any business strategy to lure potential clients.

5. Effortless automation of processes

After making a smooth start, you can also automate your processes over time. For instance, you can schedule your daily delivery routes and assign them to different drivers based on their start and end points and availability using route scheduling and planning tools like Upper.

You can also use reporting tools to track your delivery team’s daily workload and analyze their performance to identify issues like work under/overload. Accordingly, you can take proactive measures like assigning additional drivers or rescheduling deliveries to eliminate them and ensure realistic and achievable deadlines.

6. Adoption of a simple business model

As a business owner or entrepreneur, you won’t require a complex method to launch your new liquor delivery service. This is because it requires a simple business model that helps you establish your business with the desired start. 

With the adoption of a simple business model, you might not need to stretch your financial budget. Such a simpler process can assist you in expanding your delivery network as well. 

Now that you are clear with the advantages, let’s understand some downsides of this business.

5 Cons of Alcohol Delivery Business

1. Extended sales process

With the increasing list of online purchased orders, you need to make extra effort to achieve your targets. Otherwise, you might miss the deadline and leave the customer disappointed. You may need a marketing team to promote your business 24/7 across online and offline platforms. 

In some rural areas, it might take more than usual to achieve the desired number of sales. This might be due to the lower delivery frequency, which may harm your business productivity. Hence, while serving existing clients, you should also keep a tab on the sales process. As a business owner, you may demand round-the-clock service from your delivery team.

2. More phone calls

Whenever customers fail to receive orders on time, they are likely to contact your customer support team. This means that you have to answer more phone calls to update your clients. 

Alcohol delivery demands are higher in urban areas, where you may take longer routes to complete your deliveries. This would be frustrating for your clients who may not wait longer. 

3. Work inconsistency

In the alcohol delivery business, there are always higher chances of work inconsistency as you need to deal with a lengthy delivery process. The reason could be the work assignments provided to the dispatcher and drivers. 

If you don’t have drivers available to hand over the alcoholic beverages, your delivery process is likely to get extended. Such inconsistency may dent your source of income. 

4. Unfulfilled time commitment

During the alcohol delivery process, the major concern is time fulfillment. Business owners are likely to miss the deadline due to driver shortages or running out of stock, which means they may not stick to their commitment. 

Thus, you may fail to satisfy customers. Since the delivery process requires proper time management, your delivery team also needs to exert extra effort to achieve time-sensitive deliveries. 

5. Safety concerns

The alcohol delivery service also needs to be run while ensuring all safety norms are fulfilled. It may remain a real cause of concern whenever you are into alcohol delivery services. 

You need to monitor your drivers and dispatchers to ensure they are following safety protocols. Also, you may need to inspect your equipment in a timely manner while serving alcoholic beverages. 

How to Hire and Train Your Staff?

One of the nice things about a business that operates primarily online is that you don’t need much staff to run it. You will need people to fulfill orders and make them ready for alcohol delivery, as well as staff to manage your stock.

Of course, you’ll also want to hire the right delivery person(s) to help you move your craft beer, wines, cocktail kits, and other spirits as well. Besides, you may also need a person who tends to customer service duties and can answer questions or concerns that FAQs and forms can’t address.

If you decide to handle your own home deliveries, you will have more hiring and training to do. Remember, your delivery drivers will be the physical face of your business, so make sure they’re personable and well-versed in what you’re selling.  Since you’re selling alcohol, make sure all your drivers are of legal drinking age.

How can You Promote Your Business?

Before you flip the “on” switch, you need to let potential customers know about your business. That means marketing and promotion, in whatever ways, best reach your target customers.

Today the fastest, easiest, and most cost-effective way to get the word out is via social media, so make sure you have one or more people on staff who are social media marketing experts. You’ll want to be on Facebook, Twitter, and Instagram at least – everywhere your customers gather (virtually).

What is the Best Route Planner for Local Alcohol Delivery Businesses?

Business owners handling their own online liquor delivery services business, it would be challenging if you try to do it manually. A route planning service relieves you of that headache – and gets alcohol delivery orders into customers’ hands that much quicker.

Route planning isn’t as simple as giving an address to a driver. In creating the optimal delivery route, you need to consider all factors, including traffic, weather, and avoidance zones. That’s exactly what Upper Route Planner does.

Upper is the best route planning and optimization software for alcohol delivery businesses, complies with more than 50 states’ laws, and requires minimal time to expand your business network. 

Here are some benefits of using Upper:

  • Upper can help you plan unlimited routes, including stops up to 500, and then optimize them within seconds.
  • A feature-rich route planner offers a fully automated process, which means there would be no chance of human errors.
  • Drivers are informed prior to the delivery process and directed to the destination using map navigation.
  • With Upper, you can send automated delivery notifications to your clients regarding the delivery process.
  • It helps you manage consumer deliveries and gives you an in-depth report on driver performance.
  • Drivers can record an electronic delivery proof (ePOD) at the end of the successful delivery.

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Frequently Asked Questions

Liquor businesses are profitable, but ultimately, a liquor shop owner needs to consider many factors, such as administration laws, consumers’ inventory, and suppliers’ inventory. According to the Forbes study, alcohol store owners are gaining 1.7% profit.

Yes, below are the additional requirements that your drivers have to fulfill.

  • Previous delivery experience
  • Training certificate (mandatory delivery training course)
  • Copy of employment contract from liquor delivery services company
  • Approved driving license
  • Clean criminal background

A training certificate is considered valid for two years from the date of issue. Therefore, drivers need to renew it when it expires after two years.

Your delivery team of drivers definitely needs to comply with local administrative laws. It is a significant factor for your drivers while applying for a license.

The primary reason for this is the convenience of ordering from the comfort of the home. Other reasons include 1) Access to a large variety of alcoholic beverages they may not find at local liquor stores, 2) Competitive prices and discounts, and 3) Savings on fuel costs they would incur to go out and buy alcohol from physical retail stores.

The solutions you need to start an online liquor delivery business are 1) A website along with a client portal for online ordering, 2) a SAAS-based delivery management system, 3) a custom mobile app, and 4) route optimization software. A very crucial tool you must have is an ID verification tool equipped with specialized SDKs that you can integrate into your delivery staff’s mobile devices to authenticate your customers’ identity and age and prevent statutory violations.

There are 4 types of alcohol, as stated below.

  • Ethyl
  • Denatured
  • Isopropyl
  • Rubbing

Here is the list of the least harmful alcoholic drinks that should be considered while setting up the alcohol business.

  • Red Wine
  • Tequila
  • Light Beer
  • Gin & Rum

Ready to Get Started with Your Liquor Delivery Business?

As you can see, there’s a lot of work involved in getting an alcohol delivery startup off the ground. However, all that hard work can be worth it as more and more consumers are shifting from shopping in-store to shopping online liquor apps. 

As a liquor store owner, if you can offer your customers a superior online shopping and delivery experience, you are likely to be successful.

Author Bio
Rakesh Patel
Rakesh Patel

Rakesh Patel, author of two defining books on reverse geotagging, is a trusted authority in routing and logistics. His innovative solutions at Upper Route Planner have simplified logistics for businesses across the board. A thought leader in the field, Rakesh's insights are shaping the future of modern-day logistics, making him your go-to expert for all things route optimization. Read more.