As Al Capone knew well, liquor businesses are a good way to make money. There are certain brands, kinds, and variants to satisfy all palates and a never-ending demand. But you don’t want to end up in jail as the mobster did, so you’ll have to follow explicit processes to import and sell spirits.
To do this, you’ll need contacts and, of course, the right financing to get you started and create a solid business. You can find out more about working capital loans and other financial solutions by visiting Camino Financial. Once you have that clear, the real work begins.
Make sure you follow legal processes to the T, so you don’t end up breaking the law and having no business because you skipped on something. So, before starting your new business, take a look at the process you’ll follow.
Partnerships
International friends and/or contacts will be important to get your business up and running. Find the right partner in the right country, say tequila and a Mexican producer. You can also look for companies that commercialize spirits so you can buy everything from one supplier. The main idea, though, is that you reach out to the producer, so your costs remain low.
Permits
Before you go closing deals, you need to be aware of the trading agreements with those countries and, of course, get your local and federal permits in order. For starters, you’ll need a Federal Basic Importer’s Permit that can be processed at the Tax and Trade Bureau (TTB), and, once you have it, you need to obtain a Certificate of Label Approval (COLA) for each product you import. Take a hard look at specialized products, that have special laws such as the Protected Destination of Origin (PDO) in scotch or tequila. Be mindful that you’ll need to maintain and staff a business office in the United States to get the permits.
Mind the expenses
Once you have all the permits, not sooner, you can start closing deals with vendors. But you’ll need money, not only to pay for the product but also to settle taxes and border charges. Consider a working capital loan to get you started because these will be expenses previous to your very first sale. Start paying off this loan with your profit and save for the next shipment. You should include these expenses in your profit and loss statement to not end losing money.
Reach out to your customers in advance
Even though you can close a deal before you have your permits, you can start working on some deals. Build up your client base to help you on two fronts: first, you’ll have a better understanding of the market and its needs, and you’ll know which spirit will be the star of your business; second, you can plan out how much stock you’ll need to buy and where will it go.
Other business, other permits
If you plan to become a brick-and-mortar business. You’ll need to start thinking about local permits to open up a store. But also, whenever you import certain products, but you’ll be selling these and other products, you’ll need a Wholesaler’s Basic Permit. Find out all you need from your local government so you’ll start with the right foot and don’t go wasting time and money out of ignorance.
Don’t be discouraged by the hassle that a liquor importer has. The truth is that once you get the hang of it, you can do good business out of it. Make sure that you follow the rules, stay up to date with changes in policies and trading agreements so you won’t miss a better opportunity, and make your way around this profitable business.
