2023
How to Sell and Ship Alcohol Online Compliantly in the US
A Guide from Coasters, the Leading Alcohol 3PL
The Easy Way
Built-in compliance across the sales process
Low-cost shipping partner
Access to thousands of products with no need to purchase beforehand
Fulfillment centers in major states where online alcohol sales are legal
48-hour fulfillment
Easy integration to your site via proprietary API
The Hard Way
Manual checks of every aspect of compliance by you (e.g., shipping permits, age verification, adherence to the three-tier system)
Sourcing multiple shipping partners
Managing and purchasing inventory
Distribution facility in every state you ship alcohol to
Compliance with each state’s alcohol laws
In general, YOU CAN’T SHIP LIQUOR ACROSS STATE LINES
The easiest and fastest way to start selling and shipping alcohol online!
With Coasters, compliant online alcohol sales have never been easier.
- Coasters is the first compliant alcohol 3PL in the United States. Coasters can ship to most major states (NY, NJ, NE, ND, AK, NH, CT, MA, DC, IL, FL, and CA) and is rapidly expanding to new markets.
- Coasters allows you to sell and ship alcohol on your site without purchasing inventory.
- Coasters’ proprietary order and payment routing solutions easily integrate with 40+ eCommerce platforms, ERPs, and marketplaces. You can learn more about how you can integrate with Coasters here.
- Coasters handles compliance, legal hurdles, and fulfillment. Once you integrate with us, you just sit back and collect the profits!
- All orders are shipped in-state via UPS to ensure timely delivery and hold for pickup options at thousands of locations throughout the country.
The Hard Way
The rules and regulations surrounding the shipment of alcohol can be confusing and difficult to navigate. In this guide, we’ll explain how liquor stores and off-premise retailers can compliantly ship alcohol in the United States.
The Three-Tiered System: Thank Al Capone for Making Shipping Alcohol So Hard
After the repeal of prohibition in 1933, the United States adopted the three-tier system to regulate the distribution and sales of alcohol. The three tiers refer to the three levels of the alcohol industry: producers, wholesalers, and retailers. U.S. alcohol laws require a three-tier supply chain be utilized for alcohol products to be offered to consumers on the open market.
1. Producers – Under the three-tier system, producers (also known as manufacturers or suppliers) are responsible for producing and importing alcohol. The producer category pertains to everything from breweries and distilleries to wineries and importers. Producers make the alcohol. Think Johnnie Walker, Don Julio, Sam Adams & Moet Hennessy.
2. Wholesalers – Wholesalers (also known as distributors) are the middlemen in the three-tier system. They are responsible for purchasing alcohol products from producers and selling them to retailers. Wholesalers are mainly responsible for storing and warehousing alcohol products, as well as delivery to retailers. Larger wholesales in the industry include Southern Glazer’s, Republic National Distributing Company & Breakthru Beverage.
3. Retailers – Retailers are responsible for selling alcohol products directly to consumers: these are liquor stores and grocery stores. Liquor and grocery stores are considered “off-premise” retailers (meaning they sell products for consumption not at the store’s location, unlike a bar or restaurant which are “on-premise” retailers).
The 21st Amendment, which repealed prohibition in 1933, stipulates that each state has the authority to govern how alcohol is imported, distributed, and sold within its borders. This structure results in each state making its own rules on how certain products get to market, how they are priced, and how consumers can access them (delivery, shipping, in-store sales, etc.) Rules on the shipment of alcohol can differ dramatically from state to state, resulting in complicated issues for online retailers. In a nutshell, if you want to ship alcohol, you need to be very, very familiar with each state’s interstate (between different states) and intrastate (within the same state) regulations.
Before even venturing into selling and shipping alcohol online, you’ll want to ensure you have a deep understanding of each state’s laws you plan to ship to and from within. Reach out, and we can review our state-specific alcohol shipping guide.
Selecting a Shipping Partner
Shipping alcohol within the United States can be a complex process due to the various laws and regulations that vary by state, county, municipality, city, borough, or town!
First, it is important to note you are not allowed to ship alcohol using the United States Postal Service (USPS).
However, private carriers such as FedEx and UPS allow the shipping of alcohol under certain circumstances.
Below are general guidelines you’ll need to follow in shipping alcohol with either UPS or FedEx.
- UPS will only ship beer, wine, and liquor in states and cities where shipping alcohol is legal. You’ll need to sign an Alcohol Shipping Agreement with UPS in each state you are looking to ship alcohol in. Good luck getting one! 😜
- UPS requires that your business is licensed in each state you are looking to transport alcohol in.
- You’ll need advanced signature request tools to notify your customers that they will need to sign for the alcohol you send them.
- You must ship alcohol with a heavy-duty box with an inner packing of expanded polystyrene foam, folded corrugated tray, or molded fiber tray.
- Every package must include a specialized UPS sticker clearly identifying the package includes alcohol.
- Similar to UPS, you’ll need to sign an Alcohol Shipping agreement with FedEx to ship alcohol with them. FedEx will also follow state laws and guidelines and only ship alcohol where legal.
- FedEx also requires that all packages include alcohol stickers.
- Also, like UPS, you’ll need to request an adult service signature and ship following FedEx’s packing requirements which mandate you use molded polystyrene.
- Unlike UPS, FedEx will not ship beer or spirits to residential consumers.
- There are numerous regional carriers that support alcohol shipping (varies by state).
- Some are good, most are worse.
- They are flexible and will work with alcohol shippers – but you need to guarantee they are properly licensed in each state, can service your full coverage area, and can furnish proof of adult signature, etc.
- Some are very good and continue to expand their coverage, but be careful, as delivery time, tracking issues and customer service can have a huge impact on customer experience.
Shipping Alcohol Around the United States
YOU CAN’T SHIP LIQUOR ACROSS STATE LINES. Each state has its own laws and regulations regarding the shipment of alcohol. You must comply with these laws to legally ship alcohol within the United States.
You’ll need to work with a licensed off-premise retailer in every state you would like to be able to ship alcohol in. The law, plus FedEx and UPS, require this.
- Licensed off-premise retailers (liquor stores, grocery stores, etc. but NOT a bar or restaurant) are the only entities permitted to sell alcohol to customers, and thus the only entities permitted to collect payment and deliver or ship products to consumers directly.
- Retail liquor licenses are controlled individually by each state and come attached with all sorts of state, municipal, and city rules.
- For shipping orders to comply with federal and state laws, the order must be shipped by a retailer within the state the customer is ordering from. With a few exceptions (NH, NE, ND, and AK), AGAIN, YOU CAN’T SHIP LIQUOR ACROSS STATE LINES.
WHERE COASTERS SHIPS
Yes, you could build individual relationships with off-premise retailers in every state and work with each of them to coordinate fulfillment and compliance. Alternatively, Coasters can be your single partner. We hold off-premise liquor licenses in major markets across the United States and have premier partner status with UPS, so you never have to stress about juggling multiple partners, compliance, or fulfillment.
Choose Your Products and Suppliers
Once you’ve obtained the necessary licenses and permits, it’s time to choose your products and suppliers. It will be up to you to determine what brands, alcohol types, and products fit best on your site and with your audience.
It is important to remember that different alcohol types have different shipping rules and laws. You’ll want to carefully check your state’s laws and regulations before purchasing any inventory. Additionally, you will want to make sure that your fulfillment partner (more importantly, their shipping software) is capable of maintaining compliance and only shipping certain products under specific conditions. Any errors that result can be costly and could result in loss of carrier shipping contract. This can put you out of business quickly.
Once you secure the alcohol you wish to sell and ship online, you’ll need to ensure you set up age verification on your website, as selling alcohol to minors is illegal.
- Pop-up: An age verification pop-up requires customers to enter their date of birth before they can access your website. This method is less secure than manual age verification or an age verification service, but it can be a simple and effective way to ensure that customers are of legal drinking age.
- Manual age verification: This method requires customers to provide a valid ID, such as a driver’s license or passport before they can make a purchase. You will need to manually verify the customer’s age by checking their ID and ensuring they are of legal drinking age.
- Age verification service: There are several age verification services available that can help automate the age verification process. These services use a combination of public records, government databases, and third-party databases to verify a customer’s age. Some popular age verification services include IDology, Veratad, AgeChecker, and AgeID.
List Your Products and Start Selling
Once you have obtained your permits and licenses, ensured you are following your state’s laws and guidelines, selected a shipper, purchased your inventory, and set your site up for age verification, you are ready to list your alcohol products and start selling.
Many eCommerce platforms and marketplaces, such as Shopify, have built-in plugins that integrate with your WMS to help your team or 3PL pick and package properly labeled orders containing alcohol.
If I can’t obtain a license or purchase inventory, how can my online store sell and ship alcohol?
If your eCommerce store or marketplace is not a licensed retailer under the three-tier system, instead of attempting the challenging process of obtaining a permit, navigating state laws, and handling packaging and fulfillment, you can turn to an alcohol 3PL like Coasters to begin selling alcohol online quickly and compliantly.
An alcohol 3PL provider is a company that offers specialized logistics and warehousing services for the storage, distribution, and delivery of alcohol products. These services can include everything from warehousing and storage to transportation and delivery. These 3PLs are designed to help both alcohol and non-alcohol sellers and marketplaces streamline sales and ship alcohol compliantly online. By outsourcing these tasks to an alcohol 3PL provider, your business can focus on its core competencies and benefit from the expertise and experience of a specialized logistics provider. Contact us to learn more about a partnership today!
