Prospective Specialty Beer Store...Questions For Owners/Managers

I have no idea what the cost would run to have those things done or obtained. I manage a wine/liquor/craft beer store in Upstate NY.

I recommend finding a good lawyer that is in the craft industry. They will help with LLC and state and federal licensing.

I don't mean to come across as prude, but if your looking to sink $ into an investment, you should be fully submerged in your hobby/passion. I recommend spending at least a year or so to become entrentched in the craft culture and industry.
Familiarize yourself with BCJP styles, understand the macro and micro economics of beer retailing. Research distributors that offer the best of the best.

I hope I helped. A lot of your questions you will have to find yourself. Anyone can walk with you, but nobody can walk for you.

All the best! Cheers!

 

Not going to be much of a help for you, but I do have a few ideas.

1. I would consider one small shelf of wine. Often times while I am picking up my beer I will get my wife a bottle of wine off the small shelves all the bottle shops I go to have. It wouldn't be the main focus, but it would be a reason to keep a few customers who like the one stop style of shopping.

2. I would keep the markup on the more common beers as low as possible. You don't want to end up in a situation where if someone is grabbing a common 6er they can get it cheaper elsewhere. Keep the prices on those as low as possible, then make your money on the less common beers that you have. Just keep them competitive. If I am picking up a 6er for a dollar less than anywhere else has it, I am not going to bat an eye paying 75 cents more per bottle for some of the rarer beers, and you would make a profit at two bottle at that rate. 3 if you overpriced by 40-50 cents. You should do a little market and buyer research for this.

3. Sound like your fridge dealers are jackasses. They should be all over a potential sale like that. I would take your business elsewhere

 

Carry a small selection. As general rule, beer people drink whiskey too. Plus it puts you in a better position if you have distributors that carry both.

Too vague to answer. Start calling contractors and restaurant supply houses.

Depends. Standard Retail Markup on Beer hovers around an average of 27% If you think you can price at a higher margin because they people around you have extra disposable income, good luck. The price wars are coming. You've been warned.

Also, Distributors dont particularly care for accounts that cherry pick. Prepare to stock some things you dont necessarily want to stock but will help when the things you do want are allocated. If you want KBS, put some effort into carrying other Founders stuff (as an example.)

Also, it's your customer that should dictate your selection, not you. I cannot stress that enough.

The only stuff i markup higher than a reasonable margin are things that i cellar for 2+ years. That makes up for lost sales, cost of storage, and paying taxes on unsold inventory. DO NOT mark up based on rarity, you'll be crucified.

Get a lawyer to help with that kinda stuff.

Cold storage helps ****** the aging process. If you've got fast turnover it's moot. Learn how to read a Julian date and keep a log of when beer hits your dock. Pay attention to your invoices.

 

I know you want to stick to craft but I wouldn't poo-poo at least a token amount of BMC. Yes, it will take up space but stick to cans mostly, center or end cap displays (distro will build them) and a minimum number of spots in the walk in. You'll capture a little more business and possibly inspire more people to but craft products. Put together some gimmicky "Maine beer sampler" or whatever and those BMC drinkers may pick something up for a friend they know likes beer, or pick some up to offer at a party, so on and so forth. Instead of viewing BMC as the devil, look to it as an option to make more money. Plus, if it doesn't move too quickly, the distros will just keep swapping it for fresh stuff. Maybe you can even become more go-to for the locals during of-season if you broadened your selection to appease a greater crowd. I'll bet even most wine stores carry a limited amount of "BMC" or whatever equivalent wines.

 

Are you looking to open in the York area?

 

Agree with the post above. Don't become the Sock, Tape, you name it store from SNL. While I find a total craft store appealing, I still have to buy the BMC stuff for my friends when I have a party, along with wine for my wife.

 

First of all, you don't need a lawyer (unless you want to tack on an extra 20 or so grand). Your state should have a website that allows you to find out exactly what you need and submit all proper paperwork to get your business legit (in FL, where I own my restaurant...it's sunbiz.org). If you can't find it on google, call your local tax collector. They'll know what the web address is. I hope you have a sh*t ton of cash to put into those coolers. They are freaking expensive. For a ten door, I would plan on at least 50k. Plus another walk-in...you're looking at serious cash. Webstaurant.com is a good supply site. Check them out. As far as markup, do your research around town or where you can buy the beers you're gonna carry. I'm not gonna buy beer x from you for $5 more than I can get it across town. I personally use the same mark-up formula for every beer I carry, whether it's BCBS, Backwoods Bastard, or Bud Light. You and your customers determine what you carry and what you sell. You will have to bite the bullet on some less than stellar beers in order to get the super awesome seasonals...but it's well worth it. And, don't be scared to spend serious coin on a few cases of beer. Think of it as advertisement. Somewhere, right now someone is talking about my restaurant saying "hey man, they carry a beer that's 14.2% alchohol, and it costs $14 a bottle." It may not sell everyday, but it's an eye catcher. And don't be shocked when you figure out that your beer rep doesn't have a clue. There are some good one's, but just because they work for Spacely Sprockets doesn't mean they know a damn thing about Sprockets.Liability Insurance...you shouldn't be required (check with local regulation) to carry it, however it may be something you want to think about to protect your stock pile. Beer Storage...for the most part your beer is going to be fine 6-12 months in a cool, dry storage area. If you have sweet beers, milk stouts, peanut butter chocolate rainbow with glitter type of stuff...put in the cooler right away.

 

There's a beer store near me where anybody can buy any single out of any six pack for (6 pack price)/6*1.25. So, a $6 six pack, you can buy one bottle for $1.25. In my head, let's say the $6 six pack costs the store $5. So, instead of a 20% margin selling by the 6 pack, the store is pocketing a 50% margin selling by the bottle (if they sell all six).

There are a decent number of single bottles floating around at any given time, but it all seems to work out, then there is just a shelf of random one off's that is the $1.50 beer shelf and that tends to turn over pretty quickly. I think that would be the key to padding your margins.

In terms of what a "healthy margin" is, call your local distributors, explain that you're looking to start a bottle shop and see if you can meet with a sales rep who will bring a price list. Take the price list and go to your competitors and see what markup they charge for a six pack, that will give you a much better guide to what you can actually get. If your area is as touristy as I suspect, people are far less price sensitive on vacation, so I'd mark up more during your tourist season. Appeal to your local crowd as well and figure out a good way to execute a good locals discount (assuming it's legal)

One thing you have to remember about BMC products (and the thousand craft/import items in their portfolio) is that regardless if it's your jam or not, they sell. While I doubt I'd put suitcases of Bud Light by the front door, if you have a lot of tourist hotels and such within a close distance, during tourist season, I'd at least have 6 packs of Budweiser, Bud Light and Miller Lite and Michelob Ultra in the cooler. I'd also stock a few imports like Corona, Stella, Heineken, etc. because again, if you have a higher income customer coming in, they don't mind paying for their normal import, but they want what they want.

I'd also definitely look at getting one of the quick chiller systems so that even if something isn't in your cooler, you can still get it cold in 2-3 minutes. Gives you an extra 2-3 minutes to chat beer with your customers and upsell some more.

 

Standard mark up on beer is 30-35%.

 

You know your area better than anyone else, so do what you know fits the market. At my place, the only "normal" beer I carry is Bud Light...'cause that guy always comes in at some point in time. My advice on that front...get a craft alternative to the grocery store beers. Oh...you like Yuengling, you'll love Abita Amber. Oh, you drink Sam Adams...here's Rooney's Old Irish Ale...and so on and so on.

 

Not really

Gentrifiers gonna gentrify

 

In addition to my ball busting above, I'd suggest that you not take the responses you get here too seriously. 1/3 of the people responding are probably bitter about their own failed careers in the beer industry, 1/3 of the people responding are probably drunk and a 1/3 of the people are probably both bitter and drunk.

 

Yeah, well said. Because the honest advice of a sober, successful "craft beer only restaurant owner" such as myself definitely plays second fiddle to a condescending troll.

 

People are indeed demanding better beer, but also remember Craft is only about 8% of the total market currently. I'd bet good money if you're in an area with high end bistros and such they're gunna ask for Stella. Like @JDW4195 said, carry an alternative to that too. If they want Stella, sell'em Stella, and offer a six pack of X beer that's similar too. Worst case scenario you still make a sale.

 

Has anybody not taken the time to say Good luck? This is definitely not an easy business to make it big in.
Best advice I can give is make sure to support the core brands of things if you plan on trying to get the limited releases, Make friends with the distributor reps (especially if you ever plan to ask for favors... and you will) and definitely don't strike out a chunk of the market because you don't want to carry a certain brand. People dictate the market, If they want Stella keep a case around. It's not hard.

Oh and as many others have said, Be sure to offer a tiny bit of wine and liquor (Whisky/bourbon) as people will always purchase it.
Basically everything else said in this thread is based on truth, I just had to add good luck.
Oh and echoing again, Watch the prices. Price wars are in fact real.