Wine Shop Income Per Month: Know how to start and Investment Tips

Can you think of one business that is never affected by the many recessions that hit an economy? Well, yes! You guessed it right– the liquor business! There is no dearth of beer and liquor shops in India, it always is looked at as a profitable business. But, is it so? Let’s understand the economics of the liquor industry and how profitable a liquor or beer shop can be.

2. Owning A Liquor Business in India

One of the main driving factors that make a liquor business a popular one is a never reducing demand. In a young country like India, craft beers have gained popularity. This has given rise to many microbreweries and set off a virtuous cycle of increased demand. Before we understand whether a beer/liquor shop is profitable, let’s look at what goes into setting up this business. You must know what your target market is, and who your customers are.

It is rather obvious that your target customers, in this case, are people who prefer to buy their drinks and enjoy at home with friends and family, rather than a drink at a bar or lounge. In India, the target includes this category of people, and a large part of the target customer are youngsters who enjoy house parties. Another important aspect to take note of before setting up your business is to research what the most sought-after drinks are. The right menu of drinks goes hand-in-hand with the right target group.

Getting this combination right is the key to a successful liquor or beer shop. The next important factor is the perfect location. You would want your shop to get the most attention, and be located close to residential areas or business districts for high sales. One of the most important factors to pay attention to, while setting up a liquor or beer shop in India, are the licenses and permits. Getting these permissions and running your shop as per the rules and regulations of the state and central governments of India is a bit of a challenge for most people setting up their first shop.

3. Liquor Shop Profit In India

Getting right to the point– Is a beer/liquor shop a profitable business in India Well, the answer is Yes! No matter what the country’s economic state is, the government makes a lot of profit by just keeping liquor shops open. One of the most recent incidents that prove this, is the fact that liquor shops were the first ‘non-essential’ shops that were opened by the different states as part of ‘unlocking’ during the coronavirus pandemic in 2020. This clearly shows the huge demand for liquor shops.

4. Profit Margin In Liquor Store In India

Here are a few reasons that make liquor shops a highly profitable business:

1- High Public Demand

No matter hail or storm, recession or a booming economy, liquor shops are always popular among people.
While those with money enjoy a couple of drinks to celebrate and relax, those with less money splurge their scanty savings on buying liquor to dunk their sorrows in.
So, no matter what happens in the country, your liquor shop is sure to stay afloat, even in the most uncertain economies.

2- High Profit-Making Business for the Government

The government of India levies huge taxes on liquor and imposes hefty amounts of money to obtain a license or permit to sell liquor.
For this reason, the liquor business per se is extremely money-making for the government.
When the country's economy was dwindling, and the states were running out of money in their coffers in the middle of the covid-19 pandemic, they allowed liquor shops to open, as that was a sure-shot way to fill in the state coffers.

Also Read: Whisky Brands in India

3- Huge Margins For Liquor Shop Owners

Just as the government makes huge margins on liquor sold in shops, liquor shop owners have a lot of margins to make profits.
This enables liquor stores to expand their range and variety of liquor, or expand to set up more shops in different localities.
All in all, a great way to make money!

4- Recession-Proof Business

As we have seen earlier, a liquor shop is profitable at all times and is recession-proof.
In fact, with more stress comes people’s dependence on alcohol, as it enables them to relax and bust their stress.

5- Year-Round Demand

There is always a demand for alcohol.
Some months the demand rises, whereas, during the religious months of Ramzan and Navratri or other festivals, the demand drops.
However, there is always a consistent demand for liquor, and your liquor store is never going to run dry of customers.

5. Profit Margin In Liquor Business & Factors Affecting It

While setting up a beer/liquor shop is profitable, there are a couple of factors that affect how profitable your liquor shop is likely to be.

1- Competition

As we now know, liquor shops are highly profitable in India. This has resulted in many stores cropping up in neighbourhoods close to where people are more likely to buy liquor. You are always going to have to compete with nearby liquor stores. However, to keep up the sales numbers and profits, you must have great offerings to your customers to stay ahead of the competition.

2- Sales And Service Strategies

While your basic goal is to serve your customers and sell your inventory, you must devise your sales and service strategies. For example, with alcohol delivery becoming legal in the country recently, adding ‘home delivery of alcohol’ to your list of services will bring you lots of loyal customers. Especially if your neighbouring liquor shops are not providing this service. Another great sales strategy is to run ‘Best Offers’ that are attractive to your customers and brings them to your shop.

3- Country’s Economic State

Though the liquor business is recession-proof, at certain times of the year when the markets plunge, liquor sales do take a slight hit. However, this is more of a speed-breaker and not a complete standstill for your shop.

4- Product Costs & Price Points

A differentiating factor that can make your liquor/beer shop business profitable is your product costs and your price points. Getting your Math, strategy, and sales on-point will help you turn a very normal liquor shop into a mega money-minting machine.

5- Range Of Liquor Available

To make lots of profits in your liquor/beer shop, you must ensure you have a good range of liquor and a good mix of different types of alcohol. The two reasons for this being:

More range would attract different types of customers
More liquor variety would ensure a good amount of profits, as different alcohols have a different profit margin.

6. How Much Does Liquor License Cost In India?

First things first you absolutely need a wine shop license to sell alcohol. The price of a liquor license in India varies from state to state. A wine shop license or regular liquor license monitors the following things:

Which businesses can sell alcohol?
Where and when the companies can sell alcohol?
Charges and quantity of alcohol being sold?
Type of alcohol being sold
Manufacturing and distribution of alcohol
Who to sell the alcohol?

7. What Are The Different Types Of Liquor Licenses?

Beer & Wine Shop License (mild liquor)
Restaurant Liquor License or All-Liquor License
Brewpub Liquor License (For microbreweries)
Tavern Liquor License (50% profit from liquor)
P-10 (Serving alcohol at a particular function in the city)
P-13 (Hotels serving Imported liquor)
L-10 (For Retail selling)
L-9 (Retail selling of foreign liquor)
L19 (Clubs serving imported alcohol)
L3/L5 (Hotels serving imported liquor in the room service/bars)
L1 (Wholesale liquor supply to other license holders)
L6 (Retailers of Indian liquor and beers)

8. Wine Shop License Price In India

Temporary Liquor License: For less than 100 members – INR 7,000 and for more than 100 members – INR 10,000.
FL-4 License: For private flats, resorts- INR 13,000.
Permit Room License: For restaurants and wine/beer shops INR 1,50,000 and to serve in permit rooms – INR 5,44,000

Other prices include anywhere between INR 5000 to INR 15000 depending on the state. It also depends on the tier type of city on a yearly/annual basis like:

Tier 1 Cities- Rs. 10 Lakh per year
Tier 2 Cities- Rs. 7.5 Lakh annual
Tier 3 Cities- Rs. 5 Lakhs per annum
Tier 4 Cities- Rs. 2.5 Lakhs per year

9. How To Get A Wine Shop License In India?

It's best to consult a lawyer before applying for a liquor license in India. Other things include-

The type of license.
Then visit State Excise Department’s official website
Download a Wine Shop License application form
Fill in all mandatory information like- premises for business, type of license, background details, and type of liquor.
Submit supporting documents to the authorities.
Pay the prescribed application fee during the time of submission.
After getting verified, you'll get a notice at your submitted address as proof.
If no objections occur, you will receive your liquor license.

10. Documents Required To Get A Wine Shop License In India

Every state has different requirements in terms of liquor license. This is a standard list of documents you will need to get a wine shop license in India.

Affidavit confirming applicants no pending dues
Affidavit ensuring applicant doesn't have any criminal records
Applicant's Recent photograph
MOA and AOA for companies
Application form with personal plus business details
Latest ITR copy
Municipal corporation’s & Fire Department’s NOC
Business address proof or premises proof
Applicant’s Identity Proof
Applicant’s Address proof

11. Key Takeaways

If you are looking to set up your own beer/liquor shop, it is a great investment.
With a growing young population in the country and increasing disposable income in modern, nuclear families, the culture of drinking is definitely on the rise.
Be it restaurants, clubs, bars, or at home; you are surely never going to run out of customers asking for their favourite poison.
Get out there, and seal your profits!

Also Read:

1) How Does the Beer Industry Work?
2) How does the cigarette industry work?
3) How does the packaged food industry work?
4) Offline Business Ideas In India

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FAQs

Q. How much does a liquor license cost in Mumbai?

Ans- A liquor license in Mumbai costs around 15,000 Rupees. It also requires obtaining temporary party permits for bigger parties or a club license to get approved.

Q. Can we sell liquor online in India?

Ans- No, Legally you are not allowed to sell liquor online in India. No laws have been previously formed regarding the same, every state has different rules in terms of liquor control.

Q. How much profit does a liquor store make in India?

Ans- In India, on average a liquor store can incur profits of around 4 to 5 Lakh rupees. It also depends on the type of store, whether it is an all under one roof kind of store or just a standard beer and wine shop. The profit margin remains higher on imported alcohol.

Q. What is the profit margin on alcohol?

Ans- Standard liquor margins can range up to 80 to 85 per cent, while draft beers hold a margin of around 80%. For bottled beer brands the margins come around 75% while the general average comes to 60 and 70. Imported liquor have more margin than domestic alcohol brands. per cent

Q. Is a liquor store a good investment?

Ans- In a generic statement, liquor stores are amongst the best retail investment compared to other business investment opportunities. It pays off generously in the long term.

Q. Is a liquor store a good business to start?

Ans- If you have got a good amount of funds/investments a liquor store can be amongst the most profitable and stable businesses to start. But always be sure to weigh the pros and cons to enter this industry before putting in all your money.

Q. How To Grow Your Liquor Store Sales?

Ans- These are some of the most-effective tips to help you grow your liquor store sales:

Offer a variety of products plus offers in-house.
Host workshops, events, and impromptu classes.
Reach out to bars, pubs, bistros, hotels, and more to increase business partnerships.
Find reliable financiers/investors.

Q. How much money do you need to open a liquor store in India?

Ans- The initial cost of starting a liquor shop in India can range anywhere from 50 Lakh Rupees to 70 Lakh Rupees. Some major factors being- location, licenses, permits, taxes, and brands.

Q. Can I sell drinks online?

Ans- There are some websites and online applications that let you set up an online wine store in India. Other than that, alcohol is not officially allowed to be on other food-based apps like the USA for sale commonly.

Q. How do I start a wine selling business?

Ans- Follow these steps to understand how to start a winery in India:

Step 1- Choose a Business Entity & Business Name
Step 2- Create a Solid Business Plan
Step 3- Obtain all your Licensing, Taxes, and Permits.
Step 4- Finalise a Budget
Step 5- Get funding/investors for your Business.

Q- How much does it cost to get a liquor shop permit in India?

Ans- Getting a liquor shop license and a permit is a slightly expensive affair. It involves depositing a huge sum of money to the state government where you wish to set up your liquor shop.

Q- What is the profit margin for selling beer in India?

Ans- Profit margins of selling beer in India varies from state to state but can lie anywhere between 23-35% on the MRP. For example, the taxes levied on alcohol in states like Goa is much lesser. Therefore, it is very profitable to sell liquor in these states.

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Wine Shop Income Per Month [Is It A Profitable Business?]

1. How Much Money Can You Make Owning A Liquor Store?