04/06/2020
What is it like to own a mid size or small liquor store for alcohol delivery?
If you’re like most liquor store owners, you are actively managing the store every day. Here is how the typical week broke down for me.
In the early part of the week, I ran analysis to determine what I needed to order for the week. I carried about 2,000 SKUs, so this was a big spreadsheet. While wine and beer were generally straightforward, ordering liquor was always a complex affair. For reasons that escape me, liquor distributors have 3 different dynamic pricing models:
About 20% of SKUs, mostly cheap booze, are the same price every month. Easy enough.
70%, especially popular brands, are “on-sale” in alternating months. If an item is on-sale in January, you need to purchase enough to get you through February, or you will be selling it for less than you bought it for in February. When your liquor store is out of an item at the end of the month, this is why.
A small number of highly popular items may be very deeply discounted for just 1 or 2 months of the year, meaning that if you want to maximize your profits, you may need to buy and store 100 cases of more of them.
So you spend the first part of the week negotiating all of this complexity and dealing with 15–20 sales reps, who generally all arrive at the same time on Tuesdays. In addition to your regular stock orders, you also need to account for seasonal items and for special orders for customers. There are about 25,000 alcoholic beverages available at wholesale, and you can’t carry more than about 10% of them. So if customers want something you don’t carry, you order it for them.
Sales reps usually are carrying samples, and while that sounds fun, I can assure you that trying 20 wines or 12 tequilas at 10 AM is not always so great. After a year or two, I eventually burned out on wine, and thankfully hired someone who was better at it and more willing than I was. I’ve hardly consumed any wine since.
My alcohol delivery would start to arrive on Wednesdays, with most arriving on Thursdays. Get ready to count every single bottle that comes through the door, because if you sign for it, you bought it. At busy holiday times, hundreds of cases plus hundreds of loose bottles would arrive daily. They all needed to be checked in and put away on the shelves. Later that night, you will be standing outside breaking down at least 100 boxes for recycling. You will get very good at it.
The late week was typically the time to gear up for Friday and Saturday, which accounted for fully 50% of weekly sales. You need to get out emails or social media posts to drive some business in. You typically have a wine or beer tasting in the store on Friday night, so you need to set that up. I worked every Saturday for years, because I felt like I should be there for my customers on the busiest day of the week. I took off on Sundays, but on Monday the whole cycle starts over again.
While I enjoyed working with my customers and staff – most people are fairly happy when they are buying booze – I grew tired of the endless cycle. My father told me early in my career to seek project-oriented work, rather than process-oriented work, and he was right. The endless buy-receive-sell cycles grew mind-numbing over time. I enjoyed the experience for awhile, but I’m glad that I got out.
http://alcoholdelivery.co.za/2020/06/04/12/39/37/what-is-it-like-to-own-a-mid-size-or-small-liquor-store-for-alcohol-delivery/
