12 questions to ask your e-commerce provider…
…and a guide of what you should expect.
Selecting the right e-commerce provider in the beverage alcohol industry can be a challenging task. The dynamic nature of direct sales, coupled with intricate and niche laws governing the sale of alcohol, requires diligent compliance with federal and state legislation to safeguard your business and protect your customers. Whether you're embarking on a new venture or expanding your existing operations, conducting thorough due diligence is essential to ensure accurate compliance and set the stage for long-term success.
In this article, we delve into a series of questions that will serve as a guide in selecting an e-commerce platform tailored to the unique complexities of the beverage alcohol industry. By addressing these considerations, you can confidently choose a provider that understands the intricacies of your industry and provides the necessary tools to navigate the regulatory landscape effectively.
Does your platform prevent discounts from being applied to orders going to and sold within states that prohibit discounts, as well as block sales of items over a certain ABV as required by certain states?
South Dakota does not allow for the use of discounts, promotions, or coupons for the sale of alcohol online that differentiates based on volume. There are four states in which you as a producer are not allowed to sell wine products over 16% ABV. Your e-commerce provider should have this rule built into the system and prevent you from violating these state laws.Does the shopping cart, order confirmations, and packing slips contain the required Prop65 and BPA language for shipments into and within California?
The specific language required for Prop65 is as follows:
“WARNING Drinking distilled spirits, beer, coolers, wine and other alcoholic beverages may increase cancer risk, and, during pregnancy, can cause birth defects. For more information go to www.P65Warnings.ca.gov/alcohol.”
The specific language required for BPA is as follows:
“WARNING Many food and beverage cans have linings containing bisphenol A (BPA), a chemical known to cause harm to the female reproductive system. Jar lids and bottle caps may also contain BPA. You can be exposed to BPA when you consume foods or beverages packaged in these containers. For more information, go to www.p65warnings.ca.gov/BPA.”
The warning must be prominently displayed on the product label or in the product's packaging. Your e-commerce provider should ensure this language appears on all the required areas of the shopping cart, receipts, and packing slips.Does your platform track quantity limit requirements in real time, by buyer or by shipping address, as required in various states?
Certain states have quantity limits which set a limit on how much alcohol can be delivered to a single address or person in a month, calendar year, rolling twelve months etc., and some have a monthly and annual limit to monitor. Your e-commerce platform should automatically track this for you and not allow quantity limits to be exceeded to ensure you maintain compliance and are not subject to fines.Are your sales tax tables updated in real time and do they take into account the special alcohol taxes in various states outside of the standard sales tax rates?
Sales tax changes are made by states and counties throughout the year. These changes, while announced, can often go unseen. Your e-commerce provider should have a system in place to routinely manage and update tax rates across the US based on the nine digit zip code of the shipping address. Being asked to upload your own tax tables is cumbersome, time consuming and requires constant monitoring.Does your system automatically block sales to entire states or specific zip codes that cannot be shipped to?
You simply cannot ship alcohol to some states or counties. Many e-commerce providers do not have the controls in place to block these transactions and instead leave it up to the producer to handle, after the purchase has already been made. It’s best to confirm with your e-commerce platform that transactions will only be processed if they are going to be compliant.Does the platform integrate directly to the shipping carrier to prevent entering data twice and do my shipping labels carry my license number for the states that require it on the label?
E-commerce providers that have built in shipping integrations ensures you only have data in one place and ensures there is no data loss or confusion when having to transfer across systems. Additionally, in some states shipping labels require you to include your direct shippers license number, which is generally outside the scope of generic shipping labels provided by most e-commerce companies. Not having your license number on a label can lead to being out of compliance. Your sales and shipping labels should be taken care of within the same platform to ensure accuracy.Does your platform manage any state mandated delivery fees where necessary?
States are continuously adjusting their e-commerce regulations as the modern economy continues to evolve. Most recently Colorado added a $0.27 delivery fee which rose to a $0.28 delivery fee on July 1, 2023. Your e-commerce platform should have oversight into changes and have a system in place to implement them.Will your system be able to manage the Recycling Bottle Fees that states are starting to implement?
California will be implementing a California Redemption Value (CRV) on wine bottles, starting January 1, 2024. This will require you to collect and remit up to 25 cents per item for products shipped into or within California. Your e-commerce platform should be setup to handle the new CRV requirements. You should inquire if they are acting as the agent for you for direct sales and can they collect and remit CRV to the states for you.Does your system have embedded pre-purchase age verification that will keep records in case a customer orders a shipment to a state that requires pre-purchase electronic age verification?
A growing number of states require third party pre-purchase age verification of buyers (a “I’m over 21” check box is not sufficient). This ensures no minors are able to buy alcohol online as their transactions are prevented. This should be built into the platform to prevent minors attempting to purchase products online.Does your platform provide competitive shipping rates, and will customer service manage all damage claims?
When an item is damaged in transit, a producer must make a claim with their delivery partner, often up to a maximum amount and fight to convince the delivery partner the claim is true. This results in long claim times, lost revenue, and unhappy customers. Platforms should leverage their size and offer competitive shipping rates. Additionally, they should manage the claims for orders done through their platform to ensure the customer receives what they ordered.Does your platform manage exempt products to ensure that they are not sold outside of my home state?
Some products are approved by the TTB only for sale within a home state and not across state lines. You want to be sure that such products cannot be sold to customers outside of your state. It’s best to confirm with your e-commerce platform that transactions will only be processed if they are going to be compliant.Does your platform include integrated compliance features or is another subscription required for a separate system?
Platforms in the e-commerce space often mention they provide compliance but in reality, they integrate with a third party which comes with its own sets of additional fees and software. Check to confirm if the platform has compliance built into every transaction, so you know whenever a sale is made, whether in person, or for a cross-country shipment, you are compliant.
Final thoughts
In today's modern economy, establishing a strong online presence is paramount for the success of any business. Yet, navigating through intricate regulations while maintaining compliance can be daunting, nonetheless you deserve to feel secure and confident when selecting an e-commerce provider.
That's where Vinoshipper comes in. We answer “yes” to all twelve questions. Vinoshipper is the only beverage alcohol e-commerce provider that combines essential sales tools with built-in compliance, which empowers you to grow your business with peace of mind. With Vinoshipper, you can navigate the intricate regulations, ensuring every transaction is conducted in accordance with federal and state compliance rules.
When choosing an e-commerce provider, don't compromise on compliance. Trust Vinoshipper to provide the comprehensive solution you need to thrive in the beverage alcohol industry. With Vinoshipper, you can confidently embrace the online realm and unlock the full potential of your business.