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September 25, 2024

Navigating New York’s DTC Shipping Changes for Spirits & Cider

Understanding how the new New York legislation will impact NY spirits and cider producers

Navigating New York’s DTC Shipping Changes for Spirits & Cider
Navigating New York’s DTC Shipping Changes for Spirits & Cider

As the holidays approach, expect an influx of gift purchases across the next few months — an annual event that’ll only be heightened by the post-COVID e-commerce shopping boom.

Even more so, broader delays in global supply chains are trickling down to affect availability and shipping for e-commerce brands across all segments. Our recommendation? Beat this year’s slowdown by getting a head start on your seasonal campaigns, promotions, and more. 

We’ve laid out four steps below that every alcohol brand should take to beat the annual gift rush, while also maximizing the profitability and potential of this concentrated shopping period. 

Step One: Time Blocking

First, you can start building out a major messaging campaign by looking ahead on your calendar and selecting key dates to lay out a time frame from early November up until Christmas.

Specifically, we recommend blocking out three primary phases for your campaign delivery.

Pre-Black Friday

By pushing messaging campaigns out as early as mid-November, you’re gearing folks up for the holiday season around the corner, as well as letting potential buyers know to keep an eye out for a promotion in the works. 

More importantly, you’re setting your brand up to start the season on a strong note — and to not get caught unprepared by the sudden arrival of Thanksgiving crunchtime. 

Thanksgiving & Late November

From Thanksgiving onward, particularly that first weekend including Black Friday, you’ll want to host and advertise some kind of actionable event, i.e. a special release or promotional discount, to jumpstart customers into their seasonal shopping cycles. 

Cutoffs for Christmas

Finally, you’ll want to round out the season by selecting a cutoff date for placing new orders. 

Seven to 10 days before December 25th is a safe bet for buyers to receive a bottle at their door by Christmas Day, and reminders should be sent out in the days leading up to this cutoff. 

In terms of the broader time crunch that’s anticipated due to global supply chain slowdowns, you should emphasize the convenience of purchasing from a domestic brand paired with the reliability that you offer for a timely, safe delivery of your product.

Step Two: Spice Up Your Specials

Once you’ve laid the initial groundwork, it’s time to elevate your campaign by crafting it into something creative and exciting for the spirit of the season. 

In other words, your buyer’s inbox may be flooded by holiday deals, but you can capture their attention and help them recognize the thoughtfulness through your core brand messaging.

For instance, Far North Spirits is offering a holiday two-pack for drinks that’ll warm you up in the colder months. Imagine a whiskey, rye, or bourbon for your spicy cocktail or mulled wine. 

Ultimately, you’re working with the inventory you have and considering which themed products can play into people’s holiday spirit — even better if it’s in a bundle to boost your AOV. 

On the other hand, this period offers a practical opportunity to look back at the year’s releases and offload any remaining inventory through a unique discount or exclusive holiday promo. 

Step Three: Ramp Up Your Promotion Game

Next, consider the tactical logistics of your promotions. After all, it can be tricky to time promo launches, depending on whether your customer pool skews toward early or late gift grabbers. 

There are two general approaches you can take: 1) offering enticing deals early on to preempt other sales or 2) holding off until late in the buyer’s window to pull the trigger on your promo. 

The former can snag early shoppers, or at least convince late shoppers to try an early purchase, but could also lose its appeal by mid-December when fresher deals are dropping every day. 

The latter can appeal to buyers who play the long game and wait it out for the most optimal deal, but can still ultimately result in you losing out on early or average shoppers. 

Ultimately, there’s no gold-standard method and you’ll need to use your judgement depending on what aligns with your brand’s target demographic, metric goalposts, and even inventory

For instance, returning to your campaign calendar, you can skew discounts away from marking down products and toward offering cheaper, faster shipping as Christmas creeps closer. 

Step Four: Email Marketing On Deck

As we pointed out in our advice for email marketing, setting up your email flow so your comms can run seamlessly is a simple yet essential step of the process that’s easily overlooked. 

We recommend starting with a quick info sweep: pull last year’s seasonal purchase data and make sure that customer cohort is consistently re-engaged early on. 

In turn, your team won’t be stressed out and frantically attempt to piece together the perfect layout in MailChimp just a few days before Thanksgiving — which circles back to our larger point: the holidays are a time of year with promise of high ROI for your alcohol brand. 

You can utilize this opportunity to the max by planning thoroughly and creatively, not stressfully executing a last minute, makeshift campaign. 

If your brand has these moving parts staged within the first weeks of November, you should be ready to hook the earliest seasonal shoppers and take full advantage of the holiday rush.

Sit Back and Enjoy the Holidays! 

Once you’ve got these steps locked in — a killer campaign calendar, creative promos, and ready-to-launch email marketing — you’ll be the one leading the holiday rush, not falling behind. 

Whether your user base is composed of individuals shopping for friends and family or corporate customers with high-volume needs, Accelpay is the platform of choice for your alcohol brand. 

To get access to our instant storefront setup and stress-free bulk ordering, get started here.

Overview

In August 2024, New York Governor Kathy Hochul signed legislation allowing distilleries in New York State to ship directly to consumers, reviving a capability temporarily granted during the COVID-19 pandemic but rescinded by the previous administration. This legislation, effective November 19, 2024, opens direct-to-consumer (DTC) shipping for NY distilleries, both intrastate and to seven other states: Arizona, Washington DC, Kentucky, North Dakota, Nebraska, New Hampshire, and New York.

The Impact on Distilleries

For distilleries, this legislation presents significant new opportunities to expand market reach, particularly as DTC alcohol sales have seen strong demand in recent years. According to a report from Sovos ShipCompliant, DTC alcohol sales grew by 27% in 2020 and continue to represent a major channel for distilleries and wineries. The flexibility of shipping directly allows producers to cultivate stronger relationships with consumers, bypassing traditional retail distribution models.

Some suppliers in other states already have limited DTC capabilities, often restricted to local deliveries or within-state shipments. AccelPay’s technology enables distilleries to manage these shipments more efficiently. AccelPay allows producers to carve out zip codes or states where shipping is permitted, while also using a hybrid approach by leveraging AccelPay’s network of licensed third-party retailers to fulfill orders across 40+ states. This gives distilleries the best of both worlds—direct fulfillment where possible, and broader reach through retail partners. Producers considering self-fulfilling alcohol orders even to a limited footprint of states should consider using the AccelPay platform to simplify their customer’s ecommerce experience, manage order routing and even taxes. 

Key Dates

Legislation Passed: August 19, 2024

Effective Date: November 19, 2024

Eligible Producers for Self-Fulfillment

Class A-1: Micro Distillery (up to 75,000 gallons annually)

Class B-1: Micro Rectifiers License (up to 75,000 gallons annually)

Class C: Fruit Brandy Distillery

Class D: Farm Distillery (up to 75,000 gallons annually, using at least 75% NY-sourced ingredients)

Shipping Reach

Eligible NY distilleries can ship to customers in:

Arizona (AZ)

Washington DC (DC)

Kentucky (KY)

North Dakota (ND)

Nebraska (NE)

New Hampshire (NH)

New York (NY)

This reach is subject to state reciprocity and may roll out in phases. Initial shipments will likely be intrastate (NY), similar to what was permitted during the pandemic.

Licensing and Tax Requirements

As of September 2024, producers must navigate several regulatory steps before shipping out-of-state. These include:

Licensing: Producers must obtain a certificate of authority from the New York State Department of Taxation and Finance and register as a distributor under New York tax law.

Tax Obligations: Distilleries must calculate and remit taxes based on the destination of each shipment. They will also pay an annual $125 licensing fee to the state.

Additional compliance requirements, such as record-keeping and labeling standards, ensure transparency and consumer protection.

Key Takeaways for NY Distilleries

Carrier Approval: Producers need to partner with an approved carrier (e.g., UPS) to set up fulfillment accounts, ensuring the correct packaging, labeling, and compliance with shipping regulations.

Shipping Limits: The legislation allows distilleries to ship up to 36 cases of liquor per year to a single New York resident. It is likely this restriction will apply to out-of-state recipients as well.

Record-Keeping: Producers are required to maintain detailed records for three years, including data on:some text

Total product shipped

Value of shipments

Destination states

Purchaser and recipient details

Date of purchase and delivery

Carrier used

Considerations for Distilleries

To maximize the opportunity of self-fulfilling DTC orders, distilleries should evaluate their operational readiness.

Order Management Systems (OMS): Utilizing an OMS like ShipStation can streamline the fulfillment process, linking carrier accounts and tracking shipments. It’s crucial to include adult signature and ID verification for customers aged 21 and over.

Carrier Relationships: Producers should engage with UPS or other carriers to establish fulfillment accounts. They should estimate shipping volumes and negotiate preferred rates when possible.

Tax Management: Consult an accountant or tax professional to navigate the complex tax implications, especially for out-of-state orders. Software solutions like Avalara or Stripe Tax (TaxJar) can simplify tax calculation and remittance.

Operational Readiness: Ensure adequate staffing to manage order fulfillment and customer support, especially during high-demand periods like the holiday season. Consumers increasingly expect fast shipping (2-3 business days), so it’s critical to align fulfillment capabilities with customer expectations.

Next Steps

To learn more about how to implement this DTC shipping model for your distillery or brewery, reach out to AccelPay’s sales team at [email protected] or your account manager at [email protected]. Special pricing is available for NY producers looking to self-fulfill orders.

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Braxton Freeman

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