Alcohol laws vary wildly between states and counties. Some places have strange laws like you can't buy booze between certain times of day or on weekends and so on. Some force bars and establishment which serve alcohol to have more than half of their profits come from non-alcohol items. There are places which are "dry" (more than half the states allow localities to have those laws). Some tax it differently and so on.
Sounds like overcoming the regulatory hurdle here without doing illegal things will be hard part of the business.
Careful here... like many companies / industries, you should live in fear of Amazon.
Prime now already delivers alcohol in several cities, providing what seems to be a similiar service as Drizly. How does Drizly think they can compete with Prime Now? I'd think selling many products (Prime Now) has to be better than just selling one. Amazon has a history of destroying competitors (and occasionally buying them for rock bottom prices).
Competition is great, but competing with Amazon is not something in particular that I'd want to put money towards.
In Australia we have an interesting alcohol marketplace called Booze Bud. It is very hard to compete on the big brands that are stocked at the big chains and basically every bottle shop, which are everywhere here.
So instead I think they are getting most of their business by acting as a distribution platform for the smaller craft brands, who are sending stock into a centralised warehouse to sell on the platform.
I wonder if the availability of Uber and self-driving cars is a major threat to Drizly. I assume that one of the big reasons people want alcohol delivered is that they're already drunk and can't drive to get more.
I can't precisely articulate why, but this sounds a bit to me like what people said about Amazon when they started: An online bookstore? The whole point of the information superhighway is that there's endless information available. People are going to stop buying books altogether!
I suspect a barrier to growth for this company is just that lots of people don't even know such a thing is legal. I'm astonished to find out that my hometown Boston allows it, and apparently that's where Drizly started up.
Lol, tons of people know about this or want this. Unlike food, alcohol and marijuana or flowers are the only local delivery products that have wide enough margins to fund the logistics of that pesky ~$7 fixed labor cost. Fetching a $8 dollar burrito that ends up being $15 is just silly.
Back in the dot com days you would just call up Kozmo (the original Postmates) to deliver you whatever booze you want. Most high volume shops in a major metro area offer delivery. San Francisco has dozens, just yelp it.
On top of that there are ten copycats already, each covering different markets. They all offer the same app experience, they all work similar vendors. The only differentiator is marketing and branding. They're all vying for the same oxygen to burn until they run out of cash. And since the tech is commoditized down to just a few grand to build out, there's no intrinsic value, team value, product value, or any value if they don't make it.
What's been tough has alcohol by mail, which indeed is illegal in many states and is highly legislated. Turns out the USPS as the platform model is only workable for candy in a subscription box or underwear in a subscription box.
Well the end goal of this should be a central warehouse(maybe run FBA style, maybe even hired on demand,inc. fullfilment from someone ) , and instead of ordering being on-demand, set up time windows, each at a certain area, enabling optimized routes(and on top of that network do on-demand orders).
That should reduce costs to minimum and build a somewhat defensible business(unless Amazon attacks).
And having a lot of customers will be helpful in achieving those goals, so what we're seeing is just step 1.
No, the end goal is a box with wheels or a drone. What you described is called a store. Also, US is behind the curve. In China the practice is called O2O--online to offline. Buy anything you want and the closest inventoried item near you gets to you.
Wait, so this is what those silly amazon "Prime Air" delivery drones were really about. It makes sense now! I wonder whats holding up the final reveal of the flying booze\weed delivery shop.
Sounds like overcoming the regulatory hurdle here without doing illegal things will be hard part of the business.
Notice just the summary of laws:
https://en.wikipedia.org/wiki/List_of_alcohol_laws_of_the_Un...
Now think about the counties and cities having different laws as well.