Selling beer online and issues with shipping

[einhorn]

I am looking to import a Bavarian beer into the States and act as a wholesaler for them. The brewers in Germany are hoping to market their beer online and ship via UPS/USPS. I searched the USPS Homepage and simply found the statement that hazardous materials AND alcohol are not allowed to be shipped (i.e. illegal) by mail.

Does anyone have any experience here? How is it illegal but still there are online beer sites? Does the illegality of the whole thing only refer to private parties?

Any help would be great !

Prosit

[World Class Bev]

Shipping beer to many states is illegal...

Many states prohibit the mailing or courier shipment of beer illegal unless you are going through a distributor. We're a licensed distributor and we cannot ship beer that way either in our state or outside of it.

Beyond that, shipping via UPS (even if they do it for you) is going to be relatively expensive.

There is quite certainly a small amount of beer being shipped via UPS and other services, but I would wager that it is a very, very small amount and much of that probably consists of individuals making beer trades in small shipments. There are some beer clubs, but they should only be shipping to states where that type of thing is legal.

There are two major barriers that stand in the way of mail order beer. 1 - Beer is a state controlled substance with different sets of laws from state to state. 2 - Beer is heavy and costs a lot to ship. I don't think that UPS, FedEx and other such companies have a very high interest in shipping beer for those reasons.

Not to discourage your enterprise, but you might want to look at more traditional distribution methods. Your friends in Germany may not be aware of the barriers we face in the US.

[BrewinLou]

It would have to be cost effective to ship a container of the beer to the states and FEDUPS it out from here, to the states where it is legal.

[World Class Bev]

Shipping beer via UPS

To Joel's (BrewinLou) point, you'll have to get containers shipped via ship from Europe in order for this to be cost effective for you. That means you'll likely have to order in minimum pallet quantities of 18-20 at a time.

By the way, the last time I shipped a case of beer via UPS the shipping alone cost $15. Add to that a few bucks for packaging to ship and labor to pack it and that's pretty expensive.

Here's how I would look at it - figure the cost of beer to you and your warehouse from Germany. Then add your margin which has got to be at least 20% or more (you will never be able to pay your own bills at or below 20% and 30% may be more like it), then add $20 for UPS packaging and shipping (shipping cost plus materials and labor for you to pack it).

If a case of beer costs you $15, landed at your warehouse from Germany, then you add your own margin to that.

Landed cost: $15
Your margin (not markup): 20% (which is very conservative!) = $3.75
Cost to ship: $20
FINAL COST TO CONSUMER: $38.75 per case

Can you compete with similar brands at this price level with no retailer assistance and no shelf exposure where people are actually shopping for beer? You might be very competitive on price to consumer, but you're only going to reach a very small percentage of consumers since you are bypassing the traditional retail system. Basically, when someone goes to a store to buy beer, they are not going to see yours.

Of course these are simply made up numbers, but I expect that they are pretty close to reality and I am assuming a very, very conservative margin for you, which may not be high enough for you to show a profit in this scenario.

[einhorn]

License issues

Since the original post, a few things have happened. I have a type 17 (wholesaler) & type 9 (importer) California license, the wholesaler license prohibits the sale of beer directly to consumers. Therefore, the original idea has been ruled out.

I could go through other channels, but another mark-up from an online retailer, added to the already strong Euro (more so weak dollar) has made me rethink the entire business model.

The product is nonetheless interesting, being an entirely new beer style (patented by this company), so I hope to maybe act as a general importuer for them or maybe (more feasable) brewing the product here in the US with license agreements. We'll see how things pan out...

Thanks anyway for you personal insight !