Whether you’re a passionate wine connoisseur or simply want to start a lucrative online business, wine offers excellent opportunities.
The good news is that online sales of wine have skyrocketed in recent years. The not-so-good news is that competition can be steep – both from physical stores that have pivoted online and from online-only retailers.
There are many things to consider before launching your new wine business. The tips and information in this article will guide you through the essentials and prepare you to launch strong.
11 Steps to Start an Online Wine Business
A solid plan and action steps will help you achieve your goals. The following tips will prepare you to set up, promote, and – most importantly – make lots of sales in your new wine business.
1. Discover Who Else Is Out There
Competition in the wine industry is strong, so you’ll want to think about how to carve out your own niche. Run a Google search to find out which wine vendors appear on the first page of search results. These are the ones who are doing their online marketing right, so you can learn from them.
In addition to taking a close look at your major competitors’ sites, you’ll also want to check out smaller vendors based in your area. Many local wine sellers also operate websites, and these may compete more directly with you than the larger national vendors.
Pay special attention to the customer service level, special offers and promotions, how user-friendly their website is, and how they collect payments. These are areas where you can try to outdo them. With Pay.com, you can create a user-friendly checkout page that lets your customers choose how they want to pay.
2. Decide What You’ll Sell
Whether you plan on opening an online-only business or an ecommerce site for your existing brick-and-mortar business – or even if you’re launching a new wine label of your own – there are some things to consider when deciding what to sell:
Starting an Online-Only Business
It can be tempting to stock a very broad range of wines, but a niche business, designed to appeal to a specific and more limited audience, can actually be easier to get off the ground.
If you're the only seller in your region offering French wines or a certain brand of champagne, for example, it may be easier to attract customers than if you're selling the same products as your competitors. Just do some research to check whether there’s a market for the products you want to sell.
Moving Your Brick-and-Mortar Store Online
If you own a physical wine shop but want to enter the online space, you’ll need to set up a good website that allows you to accept a broad range of payment methods.
You may also need a professional photographer to take pictures of your products and a copywriter to write some catchy copy. You can hire professionals to help with these tasks.
Another consideration is whether to put your entire inventory online or just a selection. Your more expensive wines might involve high-cost packaging, shipping, and insurance, making it easier to sell only your more affordable wines online.
Launching Your Own Wine Label
Creating your own wine label means extra work, but it can be very rewarding. If this is something you’re considering, you’ll need to ask yourself a few questions:
- Do you have wine-making expertise or will you have to hire someone?
- Where will you source the grapes?
- What special equipment and licenses will you need?
If launching your own label is your dream, you can learn a lot by talking to people who’ve already done it.
3. Make a Business Plan
Your business plan is where you lay out your strategy, list the resources you need, discuss financials and address how you intend to handle potential roadblocks. A business plan is essential if you intend to take out a business loan or get money from investors.
The basic elements of a business plan are:
- Executive summary
- Company description
- Market analysis
- List of products/ services
- Marketing plan
- Logistics and operational plan
- Financial plan
If you’re finding this step challenging, you can always hire a professional to guide you through the process and help you create a solid plan.
4. Register Your Business
Before you can sell wines online, it’s essential to get the right licenses. While regulations may vary depending on the state (or country) where you plan to operate your business, the following licenses are common:
Personal license: This license permits you to sell alcohol. You might need to do a course or pass an exam to be eligible. You may also have to show that you’ll follow the laws about not selling wine to minors and that you have precautions in place to check IDs.
Premises License: This permit granted by your local council allows you to handle and dispatch alcohol from your shop, distillery, or warehouse. You’ll need a separate license for each location where you store or handle alcohol.
Alcohol Dealer Registration: In the US, you need to register your business with the Alcohol and Tobacco Tax and Trade Bureau and provide tax and other information about your business. Similar authorities exist in other countries, so check what applies to your business.
State Winery License: This applies to those who produce their own wine. The type and cost of licenses needed vary from state to state.
Local Authority Requirements: You might need approvals to ship wines to certain states.
Shipping Agreement: Sign shipping agreements with all your couriers paying special attention to the requirements each courier has in place for shipping alcohol.
5. Define Your Brand
Your brand is how you set yourself apart from your competitors. Think about how easily you recognize some of the world’s most famous brands, like Coca-Cola or BMW.
Branding includes all the elements that make up your company's identity, from the tone of your website to your logo, tagline, color scheme, and customer service policies. The stronger and more instantly recognizable your brand, the more likely your business is to be remembered.
A branding expert can help you think about how you want to come across and reflect this in the visuals and language of your site.
6. Set Up a Website
Your website is where your potential customers will go to browse your products and decide if they want to buy from you. If they don’t like what they see right away, you could lose sales.
There are many elements to consider when creating a website:
Design: This generally follows on from your branding. Once you’ve decided on your brand, a professional website designer can help create the necessary visuals. You can also find lots of DIY options online if you aren’t ready to spend the money on a professional designer.
Copy: Copy refers to the content on your website. It should reflect your brand and be interesting, concise, and appealing. Hire a copywriter to help you if this isn't your skill. A copywriter can also help with product descriptions.
Product pages: These pages should show off your wines in the best possible light. It may be worth hiring a professional to take high-quality images, although there is also lots you can do with a smartphone camera and a good editing app.
Checkout page: The checkout page on your site should make it easy and convenient for customers to pay you – and even better if it gives them a choice of payment methods. When you sign up with Pay.com, you can easily set up a smooth payment process for your customers.
7. Find a Place to Store Your Wines
Unless you have a very large house or garage, you’ll need to find a place to store your wines. This could involve renting a room or a warehouse. Make sure the conditions in your intended storage place are suitable for storing wines. Also, find out if you need to get a premises permit for your storage location.
8. Get Suitable Packaging Materials
Wine is a delicate product, so you must have the right packing materials to avoid damage during shipping. You can buy special boxes and packing materials for shipping wine.
Of course, you should factor these materials into the costs of running your business. It’s also a good idea to get some “fragile “stickers so postal handlers will know to take care.
9. Find Reliable Shipping Partners
Once you’ve figured out what wines to stock and where to store your inventory, you need a partner to help ship the products to your customers. Take the time to find reliable partners who can ship your products on time and without damaging them.
Before you choose a shipping partner, find out if the companies you’re considering have specific rules relating to shipping alcohol or fragile products.
Aside from the obvious large shipping providers like FedEx or UPS, check out smaller transportation companies that may offer better deals. If you’re only operating in one state or in a defined region, it might be more economical to use a local service or rent a truck and hire a driver.
10. Set Up a Payment System
When customers go into a brick-and-mortar shop to buy wine, they whip out their credit card and walk away with their goods without a second thought. You want your online shopping experience to be just as simple and hassle-free for your customers.
The simplest way to set up a payment system on your new website is by creating an account with Pay.com. Once you’ve completed the onboarding process, you can easily set up a checkout page that matches your branding.
Pay.com lets you accept a wide variety of payment methods, including credit and debit cards, PayPal, and digital wallets like Apple Pay and Google Pay.
11. Promote Your Wine Store
You can get the word out about your new business quickly and effectively by setting up business pages on social media channels such as Facebook and Instagram and launching some well-targeted paid ads on those channels. Paid Google ads are also a great way to raise awareness about your new business.
The Pros and Cons of Starting Your Own Online Wine Business
No matter how much you like wine and how much you know you want to run your own business, it’s worth taking a few minutes to weigh up the pros and cons and make sure it’s the right decision for you.
- Rewarding: While you’ll have to work hard, starting your own business can be very rewarding. You’ll get to grow the business in the direction you like and sell the products you love.
- Scalable: You get to choose how large or small you want your business to be. Test the waters with a small inventory and add more products later if things go well. Expanding an online business can be as simple as adding a few more web pages, uploading some photographs, and running a new Facebook ad.
- Sell to a global market: Provided you use a payment platform that offers a range of payment methods and have a good international shipping partner, you can sell to customers anywhere in the world. Of course, you must check that local legislation permits wine shipping to that region.
- High profit margins: The wine business is a lucrative one, known for its high profit margins. Online sellers report that you can expect gross margins in the region of 40%. This will give you plenty of cash to grow your business and manage your costs.
- Finding a good supplier can be challenging: It can take some trial and error to find the right supplier for your business, so you’ll want to factor this in when you get started. The ideal supplier will offer good customer service, fast delivery times, and will be pleasant to deal with.
- High overheads: Overhead costs could be significant. Aside from buying and storing inventory, you also need to consider rent, advertising, marketing costs, and paying staff. Budget for overhead costs from the start to avoid nasty surprises.
- Sales tax: If you’re operating in the United States, you’ll have to be aware of the different sales tax requirements for wine in each state. While you can account for taxes in your prices, creating the procedures for collecting and documenting them can be a hassle. If you’re selling overseas, look into the sales tax requirements for each location you want to ship to.
- Regulations: You’ll have to be proficient in the local alcohol laws in various regions. Before you launch your business, check that it’s legal to sell wines direct to the customer and if any restrictions apply.
The Bottom Line: Is Starting an Online Wine Business Right for You?
Provided you’re done your market research and taken steps to set up your online wine business properly, you can do very well.
Of course, the true measure of success lies in the sales volume. You’ll need a reliable and versatile payment service provider to keep the cash flowing. When you sign up with Pay.com, you get an easy and convenient way to accept a wide range of payment methods from your customers.