DtC Essentials: How to Get Your Alcohol Shipping License

Alexandra Daniels
June 30, 2021

This blog was last updated on November 12, 2024

Entering the direct-to-consumer (DtC) alcohol shipping market is an exciting opportunity to expand your business’s reach and serve customers directly. However, shipping directly to consumers comes with a unique set of legal hurdles. Before a single bottle can legally cross state lines, the very first step is to secure the correct licenses.

But here’s the catch: licensing requirements vary significantly from state to state. This can make compliance a complex web to navigate. From paperwork to renewal deadlines and background checks, there are plenty of steps—and potential pitfalls—along the way. To make the journey smoother, we’ve outlined the essentials to get licensed and stay compliant, plus the risks of falling short.

What do you need to become licensed for DtC alcohol shipping?

If you’re seeking a DtC alcohol shipping license, you likely already have an alcohol-related license, such as a permit for operating as a winery or a retailer. However, to legally ship alcohol directly to consumers, you’ll need to ensure you’re complying with the specific requirements for DtC shipping in each state.

When preparing to obtain your DtC alcohol shipping license, start by asking yourself some key questions:

  1. Which states will your business ship to?
    Some states have favorable laws that make it easier and less expensive to ship alcohol, while others might have more restrictive policies, higher fees or additional regulatory hurdles. Evaluating each state’s regulations in detail—such as specific license requirements for wine versus spirits, allowable shipping volumes and tax obligations—can help you identify the states that make the most business sense to enter.
    For example, some states impose limitations on the quantity that can be shipped to each household, which may affect your business model if you rely on bulk orders. Starting with a phased approach, focusing first on high-potential and low-barrier states, can allow you to generate early revenue while gradually expanding your reach.
  1. What are the forms required for each state?
    Each state has specific forms, fees and timelines, often demanding specific details about the business structure, ownership and operations. In some states, forms are standardized and can be submitted electronically, allowing for quicker processing and easier tracking. Other states, however, may still require paper applications or in-person submissions, leading to potential delays and increased administrative overhead.
  1. Have you prepared the supporting documentation for your application?
    States often require you to provide copies of your existing alcohol licenses, to help prove that you are the right type of entity for that specific type of license. For example, if a state only licenses wineries for DtC shipping, you will need to prove that you are a winery (provide TTB license, home state license, etc.). Preparing these documents in advance helps avoid delays, as missing information could lead to applications being returned or delayed in the processing queue.
  1. Do you need to include background checks and/ or disclosures of ownership?
    Different states have varying levels of scrutiny when it comes to background checks and disclosures for DtC shipping. Some states require in-depth personal and financial information from all corporate officers and key stakeholders, including criminal background checks, financial histories and business affiliations.

Pro tip: Since states may review dozens or even hundreds of applications at a time, completing the process can take several weeks or even months. Having all your documentation prepared ahead of time can help expedite the process and avoid unnecessary delays.

Why Do I Need a Specific DtC Alcohol Shipping License?

Holding a DtC alcohol shipping license allows you to legally ship alcohol to a state’s residents—whether you’re shipping beer to consumers in Ohio or shipping wine to a customer in California. Each license is state-specific, meaning that every state requires its own license for each type of alcohol. Additionally, each state has specific compliance rules, such as shipping limits, labeling requirements and tax obligations, that must be strictly followed to maintain compliance.

It’s important to remember that the consequences of non-compliance with DtC shipping requirements can be serious and will continue to grow the longer that you wait. These risks can include cease and desist orders, fines and extreme monetary penalties, and even refusal of renewal or complete revocation of your license.

States are increasingly cracking down on non-compliant DtC alcohol shipping, especially as demand surges. Many states are now leveraging the 21st Amendment Enforcement Act, which enables them to seek federal injunctions against out-of-state businesses that violate their laws. Additionally, any compliance failures by your DtC shipping partners may also reflect on your business, leading to potential legal consequences.

Three Ways to Manage DtC Shippers Licenses

Choosing the right approach to manage licensing can make a significant difference in the efficiency and success of your alcohol shipping strategy. The process requires careful organization and an understanding of each state’s unique regulatory framework. To help you tackle these challenges, here are three popular ways to manage DtC licensing, each tailored to different business needs, resources, and compliance goals.

Approach Description Pros Cons
DIY Self-managed approach where you handle all research, documentation and filing independently. – No external costs involved
– Direct control over the process
– Ideal for limited-state DtC shipping
– Time-consuming, especially for multi-state shipping
– High risk of missing state-specific requirements
– Requires ongoing tracking for renewals
Hire a Consultant Outsourcing all licensing tasks to a professional compliance consultant who manages the entire process on your behalf. – Saves time and reduces compliance workload
– Access to expertise and regulatory insights
– Reduced risk of errors in applications
– Often more expensive than other options
– Limited direct control over the process
– May require ongoing consultant fees for renewals
Hybrid A mix of hands-on work and automation using software like License Management to organize requirements and track progress. – Balances efficiency with control
– Software provides state-specific guidance
– Simplifies tracking of documents and renewals
– Some manual effort still required
– Initial costs for software
– May need additional support for complex compliance needs

 

Given the complexity of DtC shipping laws and the risk of non-compliance, partnering with an experienced compliance provider can be invaluable. The right partner can guide you through licensing requirements from the start, helping you navigate the regulatory landscape and freeing you to focus on growing your business.

Gain all the insights you need to navigate the complexities of shipping wine, beer, spirits, cider and sake. Download our eBook, DtC Alcohol Shipping Essentials: Getting Started & Staying Compliant today.

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Author

Alexandra Daniels

Alexandra Daniels is a Senior Content Marketing Manager at Sovos, leveraging 7+ years of experience to develop and execute high-impact content strategies. Specializing in digital marketing, SEO, and demand generation, she is adept at collaborating with subject matter experts to translate complex concepts into compelling insights that clearly resonate with a diverse global audience.
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