When thinking about entering the US market, there is certainly not a lack of things to consider. From the three-tier system to label approvals to sales and marketing, the complexities are never-ending. In this blog, we will provide a summary of everything you need to know to start importing your brand into the US.
Understand the three-tier system
When importing alcohol into the US, the first thing you’ll need to understand is the three-tier system. The first tier consists of the domestic or foreign producer, who sells their product to the second tier, the importer or distributor. That sale is on a state level. Each state in the US operates independently of one another and has different alcohol laws and regulations, so be sure to research the requirements wherever you do business. The importer or distributor then sells to the third tier, the retailer. This could be an on-premise retailer like a restaurant or a bar or an off-premise retailer like a package or liquor store. Finally, the consumer purchases the alcohol.
Identify your customers and partners
The next step to consider when bringing your brand to the US is identifying your target customers. This will help you strategize and select an importer and distributor that align with your plans. To gain insight into your customer base and develop a solid strategy, consider attending trade shows and connecting with people knowledgeable about the US market.
Choose an importer
When picking an importer, you have two different options: traditional importers and service importers. A traditional importer typically has a portfolio of products that they handle the sales and marketing for internally. This means importers are typically looking for specific types of products at certain times. The brand sells to the importer, who then takes control of where and to whom the product is sold. For their services, importers usually take a significant margin, sometimes 30-50%.
Service importers, like MHW, give brands more control over the sales and marketing of their products. They have the licensing and processes in place to handle everything from compliance to logistics and allow the brand to own their own sales and marketing initiatives. This means the brand gets to decide where and to whom they sell to.
For example, MHW is licensed to sell to in-state wholesalers and distributors in all 50 states and is an in-state wholesaler in New York, New Jersey, California, and Florida. This enables us to help brands sell in any state they choose. Additionally, we offer our guidance and expertise to advise on the best places for you to start.
Prepare for wait times
Finally, the two biggest factors to always keep in the back of your mind are time and funding. It is important to remember that each stage of this process will take a different amount of time and sometimes longer than you expect. Compliance aspects like Certificate of Label Approval (COLAs) and price posting can take time so it’s important to be realistic with your timeline. In addition to time, having more funding than you think you need is always recommended. Even with a strategy, your journey is unpredictable and can bring about unexpected expenses.
If you’d like to learn more about importing into the US, listen the Episode 21 of The MHW Mark Podcast entitled “How to Import into the US,” with MHW’s Senior Enterprise Account Manager Michelle Street Beaudette. If you have any questions or are interested in working with MHW, please email hello@mhwltd.com.