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The Pros and Cons of Owning a Liquor Store

Austin Chegini
25 May 2021

No matter where you go, it seems like a liquor store is not too far away. In fact, there are about 34,000 liquor stores in the United States alone.

With these stores being so popular, you may be wondering if opening your own is a good idea. Keep reading to see the pros and cons of owning a liquor store to see if this venture is right for you.

The Pros of Owning a Liquor Store

You are the boss

As with any entrepreneurial venture, opening a liquor store allows you to be your own boss. From setting working hours to deciding how things will operate, you get to be the ultimate decision-maker. 

For many in the retail industry, this is the ultimate dream. You can say goodbye to the days of taking orders from poor managers. This is your chance to hire the employees you want to work with and build a business to your liking. 

Best of all, being self-employed lets you decide your annual income. With most millionaires being self-employed, your earning potential is limitless.

Relatively low competition

Opening a liquor store is no easy feat. Because the industry has many legal regulations and significant financial hurdles, fewer people attempt to open liquor stores. For example, many new business owners do not have the patience or resources to obtain a liquor license. 

Even better, many cities and counties limit the number of liquor stores that can be open in one area. As long as you can acquire all the right paperwork and initial capital, you will benefit from the limited amount of competition. 

Consistent demand

For better or worse, there has always been a need for alcohol. Whether to celebrate a special occasion or unwind after a long day, people turn to liquor. 

Worried about the economy? Don’t bother. Unlike other retail industries that might suffer when money is tight, alcohol sales often remain steady during economic downturns. For this reason, many people consider the liquor business to be recession-proof. 

Long shelf life

For many retail businesses, overstocking inventory is a major concern. When it comes to groceries, food and perishable items will quickly go bad and result in a loss. In the clothing world, styles change quickly, often causing owners to liquidate their stock to buy the latest fashions. 

For liquor stores, worrying about shelf life is rarely a concern. First off, alcoholic beverages can last quite a long time without going bad as long as they are properly stored. Secondly, new products may enter the market, but very few fall out of style. For example, Jack Daniel’s has been making whiskey since 1875 and still has a captive share of the market. 

Replicable business model

Once your store is up and running, you can expand quite quickly. Unlike restaurants that need to ensure food quality remains consistent, liquor stores simply have to stock their shelves and promote their products. Once you have enough capital to open a second store, you can build an identical floorplan and hire the right personnel to hit the ground running. 

The Cons of Owning a Liquor Store

While all the above sounds great, no business is without its downsides. Let’s see some of the drawbacks that come with owning a liquor store.

Legal restrictions

As we stated earlier, the government does not make it easy to open a business that serves alcohol. For you to legally sell wine, beer, and other spirits, you will need to obtain a liquor license. In most states, the process involves quite a few steps and can be downright impossible. 

To start, obtaining a liquor license often requires you to file paperwork, place public announcements in newspapers, and even attend a hearing with local officials. While these steps are not very hard, they require hours of work and come with some fees. 

In some states, there is a very small amount of available liquor licenses. Even if you qualify for one, the government may not have any available permits. In this case, you will need to buy one from an existing business or attend an auction. 

Startup costs

Alcohol is expensive, even at wholesale prices. On top of this, you will need to pay for rent, utilities, payroll, insurance, and more. Add this all up, and you could see your startup costs reaching as high as $100,000 or more. 

If you need to buy a liquor license from a private party, you may also be in for a shock. In California, for example, liquor licenses auctioneers sell permits for as high as $250,000!

Theft and other risks

Like any product that is regulated and hard to obtain, alcohol is often the target of thieves. From people looking to resell their stolen goods to underage teenagers in search of fun, you will have to keep a watchful eye on your stock. As more products go missing from your shelves, your shrinkage costs will increase and your profit margins will shrink. 

Similarly, selling alcohol is highly regulated. Buyers must be at least 21 years old to buy liquor. Failing to properly verify a shopper’s age could land you in legal trouble and even cause you to shut down your store permanently. 

Manage your liquor store effectively with Epos Now

If you plan on opening a liquor store, make sure to choose the right tools to run your business. From managing inventory to processing transactions, you will have a busy workload each day. Luckily, you can make running a business easy with a reliable liquor store point of sale system. 

Epos Now is a global POS provider, helping all types of businesses operate more efficiently. Our cloud POS hardware and software is perfect for:

  • Managing inventory
  • Recording transactions
  • Verifying customers age
  • Building reports
  • Integrating third-party applications

Contact Epos Now today to see a demo of our liquor store POS.