Jump to content

Walk in Sales for Start up


saaz

Recommended Posts

I am in the start up stages of opening my distillery. My plan has been to start off smaller using an 100 gallon electrical still. Within the first couple of years I want to change over to a larger foot print and have steam ran equipment and cooling options. I do know I will have to move in the first one to two years because of the building. I will need other power options, building height and ect.

Well my question for you is in the building selection process. My State WILL allow us to sell bottles from our location. I have a building in a city that is not zoned for liquor bottling. I have talked to the city they said they would put a special use and approve manufacturing. But would also put a clause on it that I could NOT sell from my location to the public. This location is paid for other than utilities of course.

Could some of you share with me your experience of being able to sell from your location in the first years. Could you share a percent of sales vs distribution? I understand everywhere is going to be different. But how that affected your overall sales. I also live in a controlled State so onsite sells could be a big thing. It would be another liquor store (of our products only) in the city.

When I start to break it down. I would have to lease a building two to three months before I can start production. Then dealing with cola's could be another 60 to 90 days. Coming out of the gate releasing one or two products. Really I would like to take 5 or 6 months and really refine the next product that we sell. So breaking that down it could be that I lease a building five to six months before I can sell anything. The first six months I think will be a lot of sales process getting my product out into the market. But if that means selling from my location to get into the market. I do not want to miss out on that opportunity to grow sells.

Is the savings of 12 to 15K a year on a new lease worth the missed sales from walk in business? Do you think you gained 15K your first years in sales from walk in business?

Link to comment
Share on other sites

You

I do know I will have to move in the first one to two years because of the building.

Stop right there. You are concerning yourself with irrelevant details if you already know you will have to move your operation 1-2 years into your start up phase. Why-oh-why would you setup in a place you know you will have to move out of?

-Scott

Link to comment
Share on other sites

We started small in an industrial 4-plex. The building is newer and next to our city bike path so it had decent foot traffic. We negotiated for a reduced rate the first 6 months and then stepped up to normal. Then 6 months after we started selling our neighbors moved and we took over their spot. Then a year later we started hinting to the other neighbors that we wanted their spot and fortunately for us they were all thinking of moving so it worked out well. Now we occupy the whole building.

Anyway, we were fortunate to find somewhere that this was even possible. It would have been very difficult to move. It would have cost more than $15,000 in money spent, lost time and production. We aren't very large but I'm glad we didn't have to move and I dread the day we do.

I think people will visit regardless of your location if you make good use of social media and local events to get the word out. They'll go to an odd warehouse to tour/sample/buy. Just my experience, hope it helps.

Link to comment
Share on other sites

Saaz, my comments. First, I think your timetable of getting up and running with product available in 5-6 months is overly optimistic. Things that you haven't planned for will come up.

Secondly, if "the city" is going to insert a clause forbidding you from selling at your location, it's probably time to lawyer up and find a way around it. For example, getting letters endorsing your plan from immediate neighbors, etc.

Now as to whether you will be losing out from not having sales at the distillery, there remain some unanswered questions. Is your site in any kind of "destination area," tourist location, high traffic location, or any other place where there is going to be a steady stream of potential customers? Those kinds of questions will help determine the answer re: value of onsite sales.

If you have plans to grow, your distribution plan is going to be a lot more important.

Link to comment
Share on other sites

We are gearing up for a tourist location (4 month only Ny location) so we expect to concentrate our efforts on sales from our facility through our tasting room, and to local bars and restaurants. We have also come across the typical zoning ordinances that prohibit bottling plants, but have been assured by code enforcement and the municipalities attorney that as bottling of the alcoholic products we produce will be merely an ancillary function of our total operation, it is thereby permitted.

I would therefor check the legality of the zoning prohibition before I would sign anything that would prevent me from selling my product at retail.

Link to comment
Share on other sites

Saaz, from reading your initial post it seems you own the first building. Be sure when you get your variance to not have it narrowed or specific to distillery use. Plan on what you will do with the building in the future. Also, easy to say from here, Manufacture without sales is odd.

Link to comment
Share on other sites

  • 2 weeks later...

"Could some of you share with me your experience of being able to sell from your location in the first years. Could you share a percent of sales vs distribution"

I was hoping that someone would answer this portion of the original question. I also reside in a control state where we are now allowed to sell direct (to-go) from our facility. I'm debating whether it is even worth having retail sales and adding to my already long work hours. My state still collects the same amount of taxes and fees when I sell from the distillery, so I would be paid exactly the same as when I distribute through the state system.

If we can sell 50+ bottles per week, then it could be profitable. I know there are many variables, but knowing if and how other people have succeeded may help me to decide if its worth the investing the time and money.

Link to comment
Share on other sites

  • 5 weeks later...

I would suggest talking to some of the Virginia distillers that had to start out unable to sell from their location because of state law. I know a few of them were able to find or lobby for exceptions to the rule after they had already been producing. They will have the experience of what it is like to start up without on-site sales as well as the impact on their business once they could sell.

Link to comment
Share on other sites

  • 1 month later...

I would suggest talking to some of the Virginia distillers

This is an interesting comment because I had discounted the value of walk in sales until I witnessed about 25+ people roll through Catoctin Creek one Saturday morning a few weeks ago. That was the first time I considered walk-in as a viable revenue stream.

Link to comment
Share on other sites

I hate not being to sell from my farm distillery. Virginia has very specific rules on sale of alcoholic beverages. Section 4-1-119 through 4-1-128, throughout the VA ABC codes, farm wineries, breweries, and Virginia wineries get a pass on the ABC store rules. It seems the my county is dry and section 4-1-121 defines how one can get an approved ABC store on premises. The intent of all the rules concerning "Farm Wineries, Breweries, Etc. Is to provide an easy method of allowing Agri-business to flourish. Farm Distilleries are not even mentioned, so f I want an ABC store, I got a lotta work to do. Unless the legislature will insert the word "distilleries" right after "Farm Wineries,".

Link to comment
Share on other sites

  • 3 months later...

I too am looking for a reply to the original post. Are your tasting rooms and onsite sales critical to the success of your distillery and is it cost effective to have one .

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...