Even though there are over 15 states in the United States where liquor stores are run by the state, others allow entrepreneurs to open their liquor stores.
If you are in one of these states and looking to open your own liquor store, you might have some questions. The first question people generally wonder is how much does a liquor store make?
With the right strategies, you can make good money off of your liquor store. They are generally rewarding and profitable businesses overall.
This article will take a look at the details of a liquor store, how much you can expect to make, and some tips to maximize your income.
Average Income of a Liquor Store
Just as with any other business, the income of any liquor store will vary by location and some other crucial factors.
If the liquor store is in a less populated area, the average income is about $70,000.
If the store is in a densely populated area and preferably with a higher income population, then the average is between $100,000 to $150,000.
There are other variables that are at play in determining income, but the most crucial one is the location of the store.
Looking at these average numbers, we can say that the average income of a liquor store is between $50,000 to $200,000.
If you are a bigger liquor store with employees and more than one location, you can make way over $200,000, even up to $1 million.
Average Profit Margin
The typical average profit margin for liquor stores is between 20% and 30% annually.
However, depending on many different circumstances, this profit margin could be higher or lower than these typical numbers.
You can even aim for a 50% profit margin if you want and if your state laws allow you.
Generally, profit margins depend on the type of products you offer, your rent, and the overall costs of your business.
If you are offering unique brands and located in a high-income neighborhood, you can have premium price tags, which could put you at a 50% profit margin.
If you are in a lower-income area and not offering unique brands, your profit margin could be lower than the average to match the income level of the customers.
Monthly Average Income
Looking at the average annual profit numbers, we can have some sort of indication of how much your monthly average income will be as a liquor store owner.
The average monthly income could be anywhere between $4,100 to $16,600 for a liquor store. This could also be well above $20,000 or $25,000, depending on many factors.
Average Money Liquor Store Employees Earn
The average income of a liquor store employee varies by location and some other factors, such as experience.
However, according to Indeed, the nationwide average salary starts from $9.95 per hour for servers or cashiers and goes up to $18.80 per hour for sales associates.
Depending on where you are working, the average of these salaries might be different, either lower or higher.
Factors Affecting Liquor Store Income
Liquor stores are not one-size-fits-all. There are many different variables that affect your store’s success and income.
These factors are essential to be aware of and take precautions when needed.
For example, you need to know how much your rent takes up your overall costs; if it’s too much, it will kill some of your income.
Here are some of these crucial factors that affect a liquor store’s income.
Location is probably the number one factor determining both your costs and your income at the same time.
If you are located in a very busy and densely populated area, your customer base will be much higher, and you will make more sales.
In addition, the rent or your mortgage payment will vary quite a lot on which region you are in, putting a dent in your profit margin and income.
How many employees will you need? How much inventory do you need to fill in your store? How many people can be at the store at the same time?
All of these questions are a matter of the size of your store and will directly impact your income.
If you need more employees, your profit margin will be lower as the costs will be eating on your income.
This is not generally an issue in small neighborhoods, but if you are in a big area with a big population, you will most likely have local competition.
The more competition you have, the more sales you will lose to them, taking your income down. You have to find ways to fight off this competition and win over more customers.
You might be in a densely populated area, but what is their income level?
If they are not high-income earning people, chances are, your income will vary because you have to keep your profit margins lower for your customers.
In areas where people earn more, they will be more likely to pay a premium on unique items.
Inventory Size & Quality
If you buy too many items and go for the highest quality items, your profit margins will be lower if you don’t charge higher prices.
Either way, you have the potential to lose income if you order too much and go for the highest quality.
You have to be aware of much you should order per item and what their quality should be.
How Much Does a Liquor Store Cost to Open?
Knowing exactly what are the estimated costs and expected fees will help you forecast your income better for the future.
By knowing how much you will spend on opening a store, you will have a more solid business plan.
The average cost to open a liquor store varies quite a lot, going upwards of $100,000 in most cases.
The building, licenses, permits, marketing budget, inventory, and all other startup costs are included in this estimated range.
It’s essentially up to you how much you will end up spending, but some costs are mostly the same such as the inventory and licenses.
|Marketing||$0-$10,000 (7-8% of gross profits)|
Tips to Maximize Liquor Store Income
You can always increase your liquor store’s income by utilizing different things around your shop. These will increase awareness of your shop and bring in more customers.
Here are some of the proven tips that will increase your income.
- Follow the market trends: Your customers are your trendsetters, and make sure that you listen to them and keep a good relationship with your suppliers to hear what they see in other stores. Try to be aware of which products or brands are selling more than others.
- Host events if you have the space: Bring the community together and host events such as tastings in your store. Some don’t have enough space for that, but if you do, think about doing it.
- Have loyalty clubs: Reward those that always choose you for their shopping. Create a loyalty club where they will get rewards when they constantly shop from you.
- Offer unique products and brands: You need to set yourself apart from the competition around you. This happens by offering things that they don’t. Find brands or products that are quality and unique.
- Evaluate the supply and demand: Constantly evaluate your pricing strategy by looking at the supply and demand of the products and changing it up as you go.
Is Owning a Liquor Store Profitable?
In the end, profitability is the result of many different factors playing out in your favor.
The suppliers you choose, your customer base, overhead costs, and inventory are all factors that could either eat up all your profits or make your store profitable.
Some studies suggest that, on average, a liquor store nets a 15% to 20% annual profit, making liquor stores quite profitable.
Liquor stores are generally good businesses to open if you are looking to own a business because they could be very lucrative.
On average, a liquor store makes between $50,000 to $200,000, but this number could be well above $200,000, hitting over $500,000 depending on many factors.
These factors include things such as location, size, inventory, and other crucial parts.
As the liquor store owner, you can expect to have 15% to 20% annual net profit, making this venture a profitable one.
If you follow the market trends, offer unique products, and evaluate your supply and demand well, you will likely manage your store well and be successful as a liquor store owner.
How much does a liquor store owner make a year?
The exact numbers vary based on several crucial factors of your store, such as your location, size of the store, overhead costs, and others. However, the average number is between $50,000 to $200,000 annually.
How hard is it to run a liquor store?
Liquor stores have long hours of operation, have expensive inventory, and involve quite a lot of cash transactions. You need to work long hours and handle all this cash on daily operations.
How profitable is running a liquor store?
Liquor stores will always be open, no matter the country’s economic situation. So they are always profitable businesses and have a steady income in all seasons and situations.
Amit Gupta is the founder of DrFranchises – a digital marketing agency that helps brands rank better on Google Maps through local SEO strategies. Amit has over 11 years of experience in digital marketing, SEO, email marketing, and social media marketing. He’s also the owner of multiple franchises and has helped countless brands achieve success online. When he’s not working, Amit can be found playing with his dog.