Asking “how much does it cost to open a liquor store?” is kind of like asking “how much does a bottle of wine cost?” It depends. When asked how much a bottle of wine costs, most seasoned liquor store salespeople would ask a follow-up question like, “how much are you looking to spend?” If you’ve never bought a bottle of wine (or opened a liquor store) before, you might not have a reasonable guess, which is perfectly understandable. Let us save you some time. The average cost to open a liquor store in America is somewhere between $50,000 and $100,000. If that’s all the information you came for, great! We’re glad we could help. If you’re interested in learning more about how that number breaks down, you’re in the right place — that’s exactly what we’re going to do in this article. By the end of this article, you’ll have a better understanding of the upfront, ongoing, and phantom costs of opening and operating an independent liquor store. Similar to buying a home, opening a liquor store comes with a variety of costs that can be put into three general categories. The first are upfront costs. These are the costs associated with just getting started, and include things like mortgages, permits, and inventory. Next are ongoing costs. These are the recurring monthly costs of running a business. Ongoing costs can include things like payroll, insurance, marketing, and advertising. Finally, there are phantom costs, also called hidden costs. These could be one-time costs or recurring monthly expenses, but they’re less obvious and sometimes overlooked in the budgeting process. This article will break down these three types of costs — upfront, ongoing, and phantom — and provide real numbers to help you decide if the liquor store business is right for you. Throughout this article, you might see some numbers that seem rather large, so make sure you read to the end to see why the liquor store business is a great one to get into. Let’s begin by looking at the upfront costs of opening a liquor store. The first cost to consider for your liquor store is a mortgage or rent. This article will assume you’re renting your retail space, which is quite common for business owners.
The True Cost of Opening A Liquor Store
Upfront Costs to Consider
Asking “how much does it cost to open a liquor store?” is kind of like asking “how much does a bottle of wine cost?”
When asked how much a bottle of wine costs, most seasoned liquor store salespeople would ask a follow-up question like, “how much are you looking to spend?”
If you’ve never bought a bottle of wine (or opened a liquor store) before, you might not have a reasonable guess, which is perfectly understandable.
Let us save you some time.
The average cost to open a liquor store in America is somewhere between $50,000 and $100,000.
If that’s all the information you came for, great! We’re glad we could help.
If you’re interested in learning more about how that number breaks down, you’re in the right place — that’s exactly what we’re going to do in this article.
By the end of this article, you’ll have a better understanding of the upfront, ongoing, and phantom costs of opening and operating an independent liquor store.
Similar to buying a home, opening a liquor store comes with a variety of costs that can be put into three general categories.
The first are upfront costs. These are the costs associated with just getting started, and include things like mortgages, permits, and inventory.
Next are ongoing costs. These are the recurring monthly costs of running a business. Ongoing costs can include things like payroll, insurance, marketing, and advertising.
Finally, there are phantom costs, also called hidden costs. These could be one-time costs or recurring monthly expenses, but they’re less obvious and sometimes overlooked in the budgeting process.
This article will break down these three types of costs — upfront, ongoing, and phantom — and provide real numbers to help you decide if the liquor store business is right for you.
Throughout this article, you might see some numbers that seem rather large, so make sure you read to the end to see why the liquor store business is a great one to get into.
Let’s begin by looking at the upfront costs of opening a liquor store.
The first cost to consider for your liquor store is a mortgage or rent. This article will assume you’re renting your retail space, which is quite common for business owners.
We’re also going to assume you’re paying the average cost for retail space in America — about $18 per square foot.
If your retail space is 2,000 square feet, you can expect to pay about $36,000 per year or $3,000 per month in rent.
Next are licenses or permits, which are a legal requirement to sell alcohol in the States. Again, costs can vary, so depending on your state, you can expect to pay between $300 and $14,000.
To get you in the ballpark, let’s take the average cost and assume it’s about $7,150.
You’ll also need to register your business, a cost of about $300.
Of course, you can’t run a liquor store without any liquor to sell, so you’ll need to purchase your initial inventory.
An initial inventory purchase order will cost around $35,000 to get you a respectable selection of beer, wine, and spirits.
Here’s a quick summary so far:
- Rent ($3,000/month)
- License or permit ($7,150)
- Business registration ($300)
- Inventory ($35,000)
So far the upfront costs are $45,450 — before we factor in ongoing and phantom costs. Let’s look at ongoing costs next.
Ongoing Costs to Consider
When discussing ongoing costs, we’re referring to recurring monthly or annual costs.
One of the most common ongoing costs to consider is payroll. It’s impossible for us to know what your payroll costs will be without first knowing how many employees you’ll have.
Under the above conditions, the total cost per employee is $1,800 per month.
If you choose to pay for 50 percent of your employees' health benefits, you can expect to pay roughly $4,000 per year per employee. That works out to $333 per month per employee.
Your business will also need to be insured, which bears an average cost of about $100 per month.
If you want your liquor store to be as successful as possible, you’ll also need to invest some capital in marketing and advertising.
Even though we’re listing marketing and advertising as an expense for your business, it’s really an investment — one that drives sales.
A Small Business Trends report indicates that retail stores spend roughly four percent of revenue on marketing and advertising.
Therefore, if your liquor store does $100,000 in sales each year, you’d spend about $4,000 per year or $333 per month on marketing and advertising.
Finally, your business will need to pay for utilities in order to keep the heat and lights on. The average utility cost per square foot of commercial property is $2.10.
For our hypothetical 2,000-square-foot liquor store, that averages out to $350 per month.
Here’s a quick summary of the ongoing costs so far:
- Payroll ($1,800/month per employee)
- Employee benefits ($333/month per employee)
- Business insurance ($100/month)
- Marketing and advertising (4% of annual revenue)
- Utilities ($350/month)
The ongoing monthly expenses for a store with three employees are approximately $6,849 — plus marketing and advertising costs.
Phantom Costs to Consider
These are costs that are necessary but often overlooked.
Let’s start with the cost of your website. If you want to be a competitive business person, you need to have a website — more to the point, you need to be able to make sales through your website.
Web design prices can vary as much as the cost of a bottle of pinot noir. But we’d like to be a little more specific than that.
The going rate in 2022 to build a modern, professional small business website is about $5,000-$10,000.
To follow suit with earlier examples, let’s pick a number in the middle and say a website will cost about $7,500.
Next is signage. You’ll need a sign in the front of your business to let people know what you do. This will cost somewhere between $2,000 and $3,000.
To run a successful liquor store business, you’ll need a point of sale (POS) system to help you keep track of inventory, process payments, check IDs, order from distributors, and so many other things that are critical to running a successful business.
For our Bottle POS system bundle, you can expect to pay $999 for the hardware and $29 per month for the software.
If the retail space you’re renting isn’t already set up as a liquor store, you might have to purchase shelving to display your bottles as well.
The cost of shelving for a liquor store varies, like everything else — but a good estimate is about $7,000.
To summarize, the phantom costs when opening a liquor store are:
- Website ($7,500)
- Signage ($2,500)
- Bottle POS hardware ($999)
- Bottle POS software ($29)
- Shelving ($7,000)
That puts the total phantom costs to open a liquor store at $18,028.
The Next Step Toward Opening a Liquor Store
First, take a deep breath.
You’ve just read an article that says in order to open a liquor store it’s going to cost $70,000 or more.
While that might be true, owning a liquor store can be a wise business decision for the following reasons:
- The liquor business is recession-proof.
- Products are shelf stable and won’t expire quickly.
- There’s year-round demand.
- There’s relatively low competition due to limited licenses per area.
- You have a replicable business model if you decide to open multiple locations.
Now that you have a rough estimate of how much it costs to open a liquor store, you might be ready to take the next step — or at least look into it a little further.
Of course, the actual cost of each category will vary depending on where you live, as well as the amount of capital you have at your disposal.
If you’d like to read more about how to open a liquor store, check out this article titled How to Open a Liquor Store in 5 Simple Steps.
While you might be able to save on costs in certain areas, such as signage, shelving, and rent, one thing that’s worth going for the best available option is your liquor store POS system.
The right POS system can help maximize profits in the long run by reducing waste and theft, identifying top-selling products so you can reorder them, as well as starting and creating a customer loyalty program to help you get more repeat customers.
If you’d like to speak with one of our POS sales representatives about the right liquor store POS system for you please, schedule a demo with one of our experts.
Want to see Bottle POS in action? Schedule a Demo!
Post byNelson Guerrero
November 29, 2022
If you want to start a liquor store, you can expect to spend between $50,000 to $100,000 minimum. The costs will range from items like inventory and equipment to staffing and legal requirements. Here's a breakdown of a few of the items. The money liquor store owners need to stock shelves can add up to $35,000.How profitable is a liquor store? ›
Your liquor store profit margin will typically be between 20% and 30%. These profit margins are in line with averages from other retail businesses. If you're looking to open a beer or wine store, those businesses have about 40% average net profit.How much does a liquor store owner make a year in USA? ›
How much does a liquor store owner make a year in USA? The average liquor store owner in the United States makes between $50,000 and $100,000 per year, according to an industry survey by the National Association of Wine Retailers.How do I start a profitable liquor store? ›
- Stay on top of trends. ...
- Host informative events and tastings. ...
- Provide a selection of impulse buy products. ...
- Create loyalty clubs. ...
- Include unique items in your inventory. ...
- Leverage proven pricing strategies.
How much does a liquor license cost in Texas?
|Liquor License||$500 - $2000||TABC|
- Anheuser-Busch InBev US$118.52bn.
- Diageo US$116.05bn. ...
- Wuliangye Yibin US$98.98bn. ...
- Pernod Ricard US$54.16bn. ...
- Shanxi Xinghuacun Fen Wine Factory US$48.91bn. ...
- Constellation Brands US$46.99bn. ...
- Jiangsu Yanghe Brewery US$32.79bn. ...
- Brown-Forman US$32.09 billion. ...
DaveCo is a liquor store in Thornton, Colorado, United States that has been named by the Guinness Book of World Records as the largest liquor store in the world.How much do local liquor stores make? ›
Most liquor stores see a profit margin between 20-30% annually for a ballpark figure, but this figure can go as high as 50% with the right circumstances and tools in place.Who is the largest liquor purchaser in the world? ›
Liquor Control Board of Ontario.
It can cost anywhere from $10,000 to $100,000 to start a liquor brand. The amount of money you'll need to start a liquor brand depends on the type of liquor you want to produce, the distribution method you choose, and how much marketing you do.
The average net profit margin for a bar is between 10 and 15%. The gross profit margin is the difference between total restaurant sales revenue and cost of goods sold (COGS). The net profit margin is what's left of the gross profit margin after all operating expenses have been taken care of.How do I start my own liquor brand? ›
- Step 1: Determine Your Business Structure. ...
- Step 2: Research the Laws and Compliance. ...
- Step 3: Determine Your Niche. ...
- Step 4: Locate a Manufacturer. ...
- Step 5: Create Liquor Brand Elements. ...
- Step 6: Decide Where to Sell Your Liquor. ...
- Step 7: Market Your Liquor Brand.
Requirements to get an alcohol permit:
As the business owner, you must have these three things: no felony convictions within the past five years. zero violations of state liquor laws within the past two years. no moral turpitude violations of liquor laws within the past six months.
How long does it usually take to obtain a license or permit to sell alcoholic beverages? It takes about 45 to 60 days. This time can vary depending on the type of license or permit you've applied for and the certification required by the local governing authorities in the city and county of the proposed location.Can you have a mobile bar in Texas? ›
I want to operate a mobile bar/food truck. Which license or permit do I need? Under current law, alcohol permits are only issued to a permanent physical address that has been certified by local authorities.How does liquor make money? ›
Liquor stores profit by buying products and selling them at a higher cost. Efficient inventory management can increase profit and revenue by optimizing stock in versus stock out. This includes regularly reviewing and updating your product mix to ensure that you carry the right products to meet customer demand.What is the average markup in a liquor store? ›
What is a typical markup on spirits at a liquor store? The average rule of thumb is that the distributor is going to mark the spirit up between 25 to 30% from their wholesale cost, and then the liquor store is going to mark up the bottle an additional 25 to 30% before it hits the shelves.How do liquor companies make money? ›
An alcohol distributor's role is to buy goods in large quantities to sell at a profit. According to Entrepreneur Magazine, an alcohol distributor makes money by buying the product at a low price, then making a profit by tacking on a dollar amount that still makes the deal attractive to the consumer.Who is richest in the alcoholic? ›
- Carlos Alberto Sicupira & family ($8.5 billion) ...
- Marcel Herrmann Telles ($10.3 billion) ...
- Charoen Sirivadhanabhakdi ($12 billion) ...
- Jorge Paulo Lemann & family ($15.4 billion) ...
- François Pinault & family ($40.4 billion) ...
- Bernard Arnault & family (158 billion)
The Top-Selling Spirits and Categories
Tito's Vodka tops the list, as it did in 2019, 2020 and, 2021, while whiskey continues to be the dominant liquor subcategory.
Spirytus. Proof: 192 (96% alcohol). Made in: PolandApproved a few years ago to be sold in New York State, the Polish-made Spirytus vodka is the strongest liquor for sale in the U.S. “It's like getting punched in the solar plexus,” one sampler told the New York Post.Which state sells most liquor? ›
- QUOTA STATE LIQUOR RETAIL DATA. State. Population. Quota Per Capita Stores.
- Pop Per Store. Alaska. 731,449 1/3000. 101.
- 7242. Arizona. 6,553,255 varies locally. 1466.
- 4470. Arkansas. 2,949,131 1/4000. 318.
- 9274. California. 38,041,430 1/2500. ...
- 2755. Florida. 19,317,568 1/7500. ...
- 14131. Indiana. 6,537,334 1/3500. ...
- 18210. Kentucky. 4,380,415 1/2300.
The average profit margin for breweries is typically around 20%. And according to Beverage Trade Network, a “good” profit margin for a brewery is around 25% or higher. If we compare this to a restaurant, it's significantly higher, as profit margins for restaurants tend to average around 5%.How do you calculate liquor margin? ›
The profit margin on alcohol sales by taking the gross profit from a sale of drink like a cocktail or bottle of wine, and subtracting the liquor cost from that gross profit to provide the net profit margin.How to calculate profit margin? ›
To determine the gross profit margin, we need to divide the gross profit by the total revenue for the year and then multiply by 100. To determine the net profit margin, we need to divide the net income (or net profit) by the total revenue for the year and then multiply by 100.Who owns the most expensive liquor? ›
Isabella Islay Whisky – $6.2 Million
Isabella Islay is among the most expensive bottle of liquor globally due to its extremely rare nature. Luxury Beverage Company, UK owns the whiskey. The single malt Scotch whisky is 30 years old.
- Founders: Mike Meldman, George Clooney, and Rande Gerber.
- Founder, Bethenny Frankel.
- Instagram: @sarahjessicaparker.
- Founder, Post Malone.
- Founder, Travis Scott.
- Founder, Kendall Jenner.
- Co-Founder, Drake.
- Founder, Kate Hudson.
|Characteristic||Sales in million U.S. dollars|
|The Coca-Cola Co.||38,655|
Being an entrepreneur in any industry is a challenge. Being one in the liquor industry is downright difficult. Creating your own liquor brand isn't simply about having the best product around, it is about creating a story to go along with your brand and getting the brand into the hands of those who will talk about it.What is a good profit margin for liquor? ›
Net Income ÷ Revenue = Bar Profit Margin
This number represents how many cents per dollar of revenue is net income. Most bars aim for a profit margin of around 80 percent; the key to reaching that number is to measure and control your pour costs. Pour cost is an essential benchmark for your bar's profitability.
When you add in the cost of the packaging–even if you are going with cheap, standard bottles, labels, and caps–and add in excise taxes, distillery fees, and harvest and transportation, you are looking at approximately $15.86 USD in costs just to make your product.Can you make a living owning a bar? ›
If you are still wondering if owning a bar is profitable, the answer is yes. But only if the business owner has a solid grasp of business structure and financial projections with a business plan. The intricacies of menu pricing, table management, and gross profit margins are only a part of a bar's profitability.What type of bar is most profitable? ›
- Bars without a kitchen: Pizza.
- Bars short on table space: Burgers.
- Bars with an established kitchen: Pasta.
- Bars open early or late: Breakfast.
- Bars serving wine drinkers: Tapas.
You can be your own boss, network with others, and make a pretty penny. However, bar ownership is not for everyone—the long work hours, high startup costs and already saturated market mean opening and running a bar can be a considerable challenge.What is the largest alcohol company? ›
Largest Spirits Companies Research Summary
The largest spirit company in the world is LVMH Moët Hennessy Louis Vuitton, with a revenue of $79.2 billion. As of 2022, the global spirits industry has a market size of $484.40 billion.
Many craft distilleries state it takes an about a million dollars to get a distillery up and running. Thoroughbred Spirits Consultants, who specialize in helping new, regional and national spirits companies start and build their brands, states it takes anywhere from $3-5 million at a minimum.Can a felon get a liquor license in Texas? ›
Who Is Eligible to Obtain a Texas Liquor License? You will be ineligible for a Texas liquor license if any of the following apply to you: You received a felony conviction up to five years prior to your application. You broke the Texas liquor and alcohol code at least two years before you applied for a new license.How much do liquor reps make in Texas? ›
As of Apr 22, 2023, the average annual pay for the Liquor Sales jobs category in Texas is $34,489 a year. Just in case you need a simple salary calculator, that works out to be approximately $16.58 an hour. This is the equivalent of $663/week or $2,874/month.
To sell alcohol to your guests, you need a license under the Texas Alcohol and Beverage Code or you need to hire a licensed caterer. Note that, for a variety of reasons, licenses are not generally available to sell alcohol at a private residence.Can you sell alcohol in Texas without a license? ›
You cannot sell alcohol without having an appropriate license or permit. There is a potential for fines and/or jail time if you sell alcohol without TABC authorization.What is the blue law in Texas? ›
The first Texas blue law, prohibiting working, drinking, horse racing, gambling, and other heathen practices, went into effect in 1863. Since then our blue law has become the state's most celebrated statutory dinosaur.Why can't you buy liquor on Sunday in Texas? ›
Texas has restricted liquor sales on Sundays since 1935 when the Texas Liquor Control Act was passed in response to the repeal of Prohibition. Bills to allow liquor stores to open on Sundays failed in the past.Can a bartender carry a gun in Texas? ›
According to the Texas State Law Library, Texas law limits the carrying of firearms at any place that primarily sells alcohol. This applies to bars as well as restaurants that serve alcohol. On a related note, Texas Penal Code Section 46.035 prohibits the carrying and use of a handgun while intoxicated.Can a bartender drink behind the bar in Texas? ›
As commonplace as it may be, bartenders cannot drink on the job and this is against Texas Alcoholic Beverage Code policy. The TABC even has a suggested form for all bar employees to sign, stating explicitly that they won't drink on the job at all.Is collecting liquor a good investment? ›
Cask investing is often considered a more stable investment.
Prices are likely to go up when the barrel is bottled and investors could get a return of 5%-25%. However, like any investment, there is some risk and profits are not guaranteed. Plus, it can require a high up-front cost.
The average gross profit margin for a bar is between 70 and 80%. That's enormous considering businesses like general retail and automotive are around 25%. And that's mostly because of liquor cost. A beverage program with low pour cost is the beating heart of a profitable bar or restaurant.How much profit does a bar make per drink? ›
In general, pour costs can range from 15% (for premium spirits) to 28% (for wine). Beer generally has a pour cost of 24%. As a rule of thumb, you will want to aim for a pour cost of 20%. This will help to generate the 80% profit margin that is the benchmark of a well-run bar.What is the profit margin on whiskey? ›
Standard Whisky Industry Margins
The whisky industry works on a 50-60% mark-up from wholesale to retail.
The beverage alcohol industry is generally considered recession-proof, but there are certain market changes that occur during recessions. For example, in the 2008 recession, beer sales went way down, and hard liquor sales went way up. Wine and ready-to-drink products (RTDs) were either flat or increased slightly.How much is a 50 year old bottle of whiskey worth? ›
Only an infinitesimal number of special barrels have gone the distance of 50 years, and their rarity and longevity always command top dollar. Current offerings of 50 year old scotch, like Dalmore, can cost as much as $60,000 a bottle, making others, like Benromach, look like a veritable bargain at $14,500.What liquor to invest in? ›
- Constellation Brands (NYSE: STZ)
- Brown Forman Corporation (NYSE: BF. B, BF. A)
- Diageo (NYSE: DEO)
- Pernod Ricard SA (EPA: RI)
- LVMH Moet Hennessy Louis Vuitton SE (EPA: MC)
- MGP Ingredients (NASDAQ: MGPI)
- Rémy Cointreau SA (EPA: RCO)
- Boston Beer (NYSE: SAM)
- Website and app development. It should be no surprise that tech is one of the fastest-growing industries. ...
- Financial consulting. ...
- Online business consulting. ...
- Information security. ...
- Digital marketing. ...
- Social media marketing. ...
- Writer or author. ...
- Graphic design.
- Coca-Cola. The company is celebrating its 130th birthday this year. ...
- PepsiCo. In 1893 Caleb Bradham challenged Coke and released its own cola brand. ...
- Red Bull. ...
- Bud Light. ...
- Budweiser. ...
- Heineken. ...
- Gatorade. ...
Pour cost is calculated thusly: it's how much booze you had when you started, plus how much you spent, minus how much you have on hand, divided by how much you sold. Multiply that number by 100 and throw a percent symbol at the end of it, and you've got your pour cost.What does pour cost mean? ›
Your bar's pour cost is the percentage of costs that your drinks cost compared to your bar's resulting sales from those products. It is a way of measuring your gross profit margin on your bar's products and goods.How many shots in a bottle of 750ml? ›
We know that in a 750 ml bottle there is 25.36 fluid ounces. Since a traditional shot glass(jigger) is 1.5 fl oz. We multiply the 29.57 mL we had previously by 1.5. And lastly, 750 ml/44.46 mL = 16.90 shots.