Owner of a good local wine shop is retiring and he’s looking to sell. I’m thinking of buying the business and expanding their online presence.
Anyone with similar experience that can help me understand the process? Truly don’t know much about the retail business but am interested for a number of reasons. Trying to do my due diligence on wholesale-retail margins, sourcing, legal(…etc) before jumping in. An online pro-forma would be incredibly helpful too.
In the UK, you’d need a licence to sell alcohol, and I’d expect that to be true in the US.
Remembering a friend of mine running a shop, he was very much aware of his opposition, and would adapt to them. Where do you compete well, and where would you choose not to compete?
How much would you want to expand the online business? It might give you a safer start to go completely online, but running regular tasting events to generate / maintain local customer loyalty, without the overhead of running a shop. Or you realise it’s the hand-selling / social aspect of it that appeals, and the shop remains your key focus. Whichever way you fall on that question, may have a significant impact on the margins / pricing. Shops cost money and so are rarely cheaper than online specialists, but can survice well on se3rvice and customer loyalty, even a sense of community.
Things/process vary by state. You would probably want you and the outgoing owner to overlap some time there, so they can train you up on the day-to-day, processing invoices, learning about your state’ ABC (alcohol beverage commission/liquor control board) rules, regulations, licensce transfer and renewals… and how to send in your invoice checks on time to your distributors.
You might have to deal with local and state tax reporting in addition to other obligations. You may want to hire someone for those matter.
CityHive seems like a solid company you could tap to help build your online store. You would upload your inventory files from your dashboard/point of sale.
Get acquainted with the sales reps who call on the store.
If you have no prior retail experience, you will probably have to hire some managing help eventually. Good help. If you have the time and energy for it, it might be wise to put in your hours at the shop for a year…get to know the pulse of the customer base, business flow and start developing and building relationships with customers, sales reps, vendors and so forth. Amount of time you put into it depends on your financial picture coming into the opportunity and how you want to put your stamp on the business as you take the reigns.
Other things to consider, your nearby competition, how the wine curation is at the shop now (and where you see it going) and the sales summary at this store in the past 3 to 5 years.
Texas here and I’ve racked up about 7 years of retail wine & spirits experience and additional time as a management consultant for new shop owners. Assuming you’re a wine nerd with a seasoned palate, it does give you some advantage compared to some new shop owners. Don’t be afraid to ask questions when dealing with the owner, any current staff, sales reps, customers and so forth.
New shop owners tend to hit struggles when they don’t know what questions to ask or they’re reluctant to (hence, be prepared to hire proven and experienced help).
Is this in a control state or three-tier state?
which store? location / state matters greatly re: online business.
Too many variables and not enough info in the OP.
Long Island, NY
Long Island is pretty big and broad for the conversation here? What part/township/boro?
Nassau
Jay,
Every spot is different. It’s hard to offer advice if you’re vague. Run the numbers-median income in a certain radius of the store, number of homes/residents, is it in a place with good traffic? Was it a good operator who bought the right allocations and can set you up to keep some or all of them under new ownership? Do they already have a good inventory/POS System? What % is walk in traffic vs shipping? Will you deliver? Do they have a delivery van? So many things…
And how close is the shop to Total Wine!!!