Opening a liquor store is a way of earning a stable source of income, because people drink alcohol in both happy and sad times. However, it also affects the level of consumer demand so that the profit margin is low – this means that you can't get rich just by setting up one shop. In addition, the sale of alcohol is also strictly regulated and the business is quite difficult for a novice businessman to run. Despite this fact, with the right way and a powerful strategy to find customers, your store can be a reliable source of income for years.
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Method 1 of 2: Preparing to Open Your Store
Step 1. Find a suitable location
The liquor store's profit margins are quite low and the level of demand is constantly changing. In other words, your income will not change much over time. So, the success of your store is very dependent on choosing its location. If you open a liquor store in a location filled with bars, your store may fail, and become the butt of a more successful local competitor.
The success of a liquor store is greatly influenced by the people around it. Products that work in one area may not sell in another. Keep this in mind when you search for locations. Market conditions are strongly influenced by the distance of competitors' shops, but there are various other factors that must be taken into account, such as demographic factors and cultural influences of the local community
Step 2. Hire an attorney
Once you've found a good location, you'll need to find out if it's okay to build a liquor store there. There are many countries that strictly regulate the sale of alcohol – for example it is not allowed near places of worship – and complying with government regulations is not always easy. In fact, regulations regarding the sale of alcohol in different regions are so inconsistent that you should seek the help of an attorney who understands local laws and can guide you through the entire licensing process.
- For example, some areas of the United States strictly restrict the sale of liquor. In these areas, a license to set up a liquor store can cost a lot of money – more than 1 billion – because you have to buy the permit from the person who owns it. In areas with less stringent regulations, you can get a permit for just a few million rupiah.
- Obtaining permission is only the first step. Some areas prohibit the sale of alcohol on certain days, while others prohibit the sale of spirits along with beer and wine. There are also those who prohibit the sale of any form of liquor. Usually, the regulations vary from region to region, but the sale of alcohol at the district and city levels is usually quite strict, so you will need the help of someone who understands the law there.
- One thing is the same everywhere: breaking local regulations costs you a fortune. It's a good idea to pay the attorney's fees up front to get the proper license, rather than getting the wrong one, being fined, and then paying an attorney.
Step 3. Pay attention to market conditions
Once you're sure you want to sell alcohol at a location, you need to start creating a business plan. The first step is to research the market conditions around the location.
- The success of a liquor store is greatly influenced by the people around it. Products that work in one area may not sell in another. Demographic and cultural factors of the local community are very influential. The more detailed the market analysis in your business plan, the more detailed your initial capital estimate will be.
- Take factors such as ethnicity, age, marital status and income into account when analyzing the market, as all of these factors influence drinking habits.
Step 4. Create sales and expense projections
Market analysis is created to give you an idea of your potential customers. By mapping potential customers, you can project sales and expenses based on buying habits and selling prices of products in that area.
- For example, if the area has a large number of young, unmarried prospects, you might anticipate selling beer and liquor such as tequila. Approach liquor distributors, then look for product prices whose selling prices are in accordance with “reasonable” rates in the area. If you combine this data with the estimated number of customers and additional expenses (such as store rent and employee salaries), you can calculate the initial capital and sales targets.
- Don't ignore the influence your competitors have on your sales.
Step 5. Find a loan if necessary
In general, a novice businessman has difficulty getting a loan. This applies to the liquor business as well, but because the market demand for alcohol is quite stagnant, many investors consider this business a safe investment.
When seeking a loan, bring your business plan along with all required documents (such as income records, fixed and movable assets, and tax documents). Even if you have a detailed business plan, you have already completed the toughest task, namely market analysis and revenue projections. Find out how to make a good business plan on this page
Step 6. Get an Alcoholic Drinks Sales Business Permit (SITU-MB) and Alcoholic Beverage Trading Business Permit (SIUP-MB)
SITU-MB and SIUP-MB are two forms of permits issued by the government to regulate alcohol sales in Indonesia. While there are no special fees that need to be incurred other than taxes, all liquor store owners should have them.
For information, in the United States, alcohol sellers in the past had to pay special taxes to the State Treasury. Now, not anymore. They just need to fill out a form with information about the name and address of the shop owner, the name and address of the shop, and the type of alcohol sold (beer, wine, liquor, etc.). You can view the form at
Step 7. Purchase store supplies
This will be your biggest expense. Liquor stores with large capital stock have liquor worth hundreds of millions to billions of rupiah. Don't be tempted to compete with those numbers. Fill your inventory with the fastest-selling products – the more you sell, the less capital you will need – before adding other types of products.
The price of alcohol is usually determined by a distributor who has a monopoly on a particular brand (this is why the price of alcohol is the same everywhere). So you most likely can't haggle the price. If you want to sell Jose Cuervo drinks, you can't compare prices from distributors – there is only one distributor who sells them at wholesale prices, so you can only get a discount based on the number of drinks purchased
Step 8. Consider finding an employee
In general, liquor stores are not a business to be left at will. The owner usually works all day in the shop, especially in the early days. However, hiring one or two employees can make your business operate more efficiently than managing yourself.
Method 2 of 2: Keeping Profits High
Step 1. Host a wine tasting or brewing class
Since consumers are now much smarter, they usually enjoy learning how to make a drink or enriching their knowledge of wines that have never been tried. Take advantage of smart consumers to make a profit.
- Even if this isn't always possible due to local laws, if the laws in your area allow it, these classes can be a powerful way to attract visitors into the store.
- Even if you can't host a wine tasting or brewing class there, you can get creative to achieve the same result, such as partnering with a local restaurant or creating other classes.
Step 2. Offer complementary foods
As some somelier said, "What grows together, fits together". Providing complementary food options that go well with beer, wine, and spirits can make your shop look professional, as well as attract big-pocketed diners.
You can even increase the efficacy of this strategy by selling certain types of food (such as fruit, seasoned meats, or cheese) that go hand in hand with liquor. Your customers will be willing to pay for it
Step 3. Boost online sales
Build a nice, professional website, build an email list, and ask visitors to leave reviews online. Be active on social media and offer special sell-off promos (sell your product at a loss in a short period of time to increase visitor numbers). Do everything to make your store more popular and known in the community.
Step 4. Become a local event sponsor
One way to blend in with the community around your store is by sponsoring events such as festivals or concerts. Besides being able to increase sales at the event, you can also offer various promotions so that viewers will come to your store.
Step 5. Request promotional items from distributors
Most distributors will offer a variety of exciting new product variants. Make sure to keep abreast of product developments on the market so that your shop still looks up-to-date.
Step 6. Obey the law
Selling alcohol to minors, even if unintentionally, can result in a fine of up to millions of rupiah and result in your life ending up behind bars. Check the identity of each buyer and ask the police for help to find out how to distinguish a fake ID card from a real one.
