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How Do Alcohol Distributors Make Money?

Starting a business is one of the sure ways to gain financial stability especially if you are able to build a profitable business that can run on autopilot or at least a business that can operate with very minimal supervision. Interestingly, there are several businesses that can operate with minimal supervision.

One such business is an alcohol distribution business, or better still, to become an alcohol distributor for major alcoholic drinks production companies.

No doubt, before any entrepreneur can settle for a business, they would want to know how they are going to make money from the business and also the profitability of the business. In this article, we will look at how alcohol distributors make money and also how they can scale up their income.

3 Ways Alcohol Distributors Make Money

  1. From Wholesale Distribution of Alcoholic Drinks

The major source of income for alcohol distributors is from the wholesale distribution of different types and brands of alcoholic drinks.

Basically, alcohol distributing businesses engage in sourcing alcoholic drinks from alcoholic drinks production companies or major importers of alcoholic drinks at a fee and then distribute or sell at wholesale prices to alcoholic drinks retailers with a controlled markup price that will ensure that they make a profit.

Please note that the markup price alcohol distributors put on the alcoholic products they distribute usually covers their logistics and overhead. With this, they can easily predict the profitability of the business.

How to Scale Up Your Income

An alcohol distributor can scale up his or her income by ensuring that they build a robust distribution network across different states and cities, and also ensure that the distribution network covers alcoholic drinks retailing businesses such as liquor stores, restaurant and bars, nightclubs, hotels, and any other business that retails alcoholic drinks.

Aside from building a robust distribution network with alcoholic retailers, an alcohol distributor can also scale up his or her income by becoming a licensed distributor for many alcohol production companies. You can also make more money when you are the sole distributor of the product in your city, state, or country.

Other Sources of Income for Alcohol Distributors

  1. From Endorsement and Promotional Deals

Another source of income for an alcohol distributor is from endorsement and promotional deals. If you have been able to successfully build your brand as a major alcoholic drinks distributor, you can easily secure endorsement and promotional deals from new alcoholic drinks production companies or importer that is trying to gain entrance into the market space you are covering.

Usually, you will be required only to sign an endorsement and promotional contract when you are sure you won’t be distributing or promoting a similar product for a competitor within the same market space.

Please note that under such an agreement, all your distribution trucks and vans will be branded in the company’s logo (the company you are promoting their products), and your staff members will be required to wear the company’s branded shirts.

  1. From Alcohol Drinks Logistics and Fulfillment Services

Lastly, alcohol drink distributors can also make money from engaging in what is known as alcohol drinks logistics and fulfillment services. This is so because alcohol distributors have the capacity to help alcohol drink production companies and importers handle their logistics and transportation for a fee as agreed by both parties.

Basically, alcohol drinks distributors that are also offering logistics and fulfillment services make sure the products under their care reach their intended destinations efficiently and in compliance with regulations.

Alcohol drink distributors can also make money by also providing warehousing and storage facilities, inventory management, and order fulfillment. Please note that these services may be charged separately, providing an additional source of revenue.

In conclusion,

Despite the fact that the sources listed above are the common sources that an alcohol distributor makes money from, there are other ways you can generate money as an alcohol distributor. All you have to do is to explore the options available to you in your city. Trust me, there are always ways you can explore to make more money as an alcohol drinks distributor.