Hello, I am interested in starting my hard spirits/ distillery business and I am researching and learning different sides of this business as well as technology. And I understand that as in any other businesses, business is about sales, not about making or technologies. So, my main goal is to focus on sales. But how to sell without making or having a product? The biggest problem as I see, people invest thousand of the dollars into the equipment when they do not have organized sale. A couple distillery, I have talked, already have huge loans, loans with collateral houses and they just start working on sales. And it is hard to organize sale (hard to promise to deliver box of spirit today and deliver it by next Friday), because it would require 1-2 years to get federal/state permits (and at least some of the equipment should be there), make spirits and age it, so real sale start after 3 - 4 years of investing th initial money.
Idea that I have is to not invest into equipment, invest into already made product. So, buy whisky in barrels and age it. Once they will be reasonably aged, I will bottle them and will work on real sales with realistic promises.
For example (numbers are quite generic and may be even too conservative), I can buy 50 gallons barrel of whisky for $2000 that would be about $40/gallons. In order to MAKE this ONE barrel (in big scale), conservative, I would need about $5 in materials, $5 in utilities (electrical, water, sewer), $3 in federal taxes, $1 in labor (salary, taxes) and about 2$ in equipment (300K spent for the equipment paid in 3 years making 100 gallons per day 200 days per year plus possible loans). So, I would already pay about $15 per gallon that is obviously less than $40/gallon, but it would require almost nothing from me, especially controlling the distilling process, buy ingredients, and all these actions it will be almost impossible to keep with full time job, family. Especially if location of the distillery/aging facility would be in hour or hours to drive from home/work.
I do not need much investment into equipment (mostly shelves), so I will spend portion of the saving ($60K) to buy whisky and rent/utility for the facility will be paid from my regular paycheck. Plus, part of the paychecks will be used to collect money for buying next barrels.
With the assumption that my aged spirits will increase the bulk price 10% per year (double the price for 10 years aged spirit), I will have about 30 - 50% of the covered monthly expenses (obviously, when I sale barrel or bottles), the rest I will try to cover from certain extra services like age/store somebody else's private casks, store other people stuff (as public storage with limited access), rent it out as a photo studio (high ceiling), etc. It will require some extra work, but not as much as be involved in real distilling every day (supply, accounting, actual work, etc).
In two years, after I buy first barrel, I will have a product (bottling does require a lot of expenses), and will start deeply working on sales and marketing. Most likely, I will not get a lot of profit, so I will be initially working on covering expenses. But learning to sale should be priceless. If sales is not good, I will be sitting with barrels that keep aging and increase their value every day with reasonable expenses.
And only when I will have a strong sale, I will start investing in distilling equipment and will start to make my own spirit.
Any comments, suggestions, critics, etc? I will appreciate any feedback. If this plan has certain chance to pass, I will start working on detailed plans with accurate numbers.