Why Most Beverage Alcohol Brands Get E-Commerce Wrong (and Why You Still Have to Do It)
Harry McKaig discusses the unit economics, costs and advantages of eCommerce in Beverage Alcohol CPG
I get asked this a lot — by other founders, brand operators, digital marketers — “What’s your take on e-commerce for beverage alcohol?”
I get asked fairly often about e-commerce in beverage alcohol, usually by founders or brand teams trying to decide how much time and money they should be putting into it.
The biggest mistake I see is treating e-commerce as a profit channel early on. For most beverage alcohol brands, especially smaller ones, that’s unlikely to be the case for quite some time.
That doesn’t mean e-commerce isn’t important. In many ways, it’s one of the most important channels you can invest in — just not for the reasons people usually expect.
And as a note in full transparency: I am presenting our actual metrics from the first 12 months of operating eCommerce. Becomes much harder if you need cold chain distribution and shipping or working on heavier, bulkier or lower margin items.
The Unit Economics Are Tough
At a $39.99 retail price, a brand gives up a meaningful portion of revenue to retail and distribution margins. Even before price supports or incentives, the remaining revenue per case is limited.
On paper, gross margins can still look healthy. But once you layer in the costs specific to e-commerce — shipping, transaction fees, technology, creative, and basic site maintenance — the economics tighten very quickly.
Shipping is the biggest constraint. Sending a single bottle can cost $15–$20, which forces brands to push bundles, multi-bottle purchases, or value-adds just to make orders workable.
Before paid media is even considered, many brands are already close to breakeven.
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Paid Media Raises the Bar Further
Once advertising is added, the margin requirements increase significantly. Break-even ROAS needs to be high, and consistent performance is difficult to maintain.
Industry benchmarks suggest that even average paid media performance only gets brands close to gross profitability, not meaningful contribution margin.
This is where many teams start questioning whether e-commerce is worth it.
Availability and Speed of Learning Are the Real Benefits
What e-commerce provides is early, broad availability without the need for a fully built sales organization.
With modern fulfillment and compliance platforms, a brand can reach customers across many states quickly. That creates an opportunity to learn faster than traditional market-by-market expansion allows.
This matters less for volume and more for insight.
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E-Commerce Functions Best as a Data Engine
Direct-to-consumer sales provide information that is difficult to access through traditional retail:
Who is actually buying the brand
Where they live
How often they purchase
What messaging resonates
What drives repeat behavior
Over time, this allows brands to understand customer lifetime value, acquisition costs, and purchase patterns in a way that retail alone does not support.
That data becomes useful well beyond e-commerce.
Testing Before Scaling
E-commerce allows brands to test positioning, messaging, offers, and creative before deploying them broadly at retail.
It also helps identify where demand is strongest geographically, which can inform route-to-market decisions and sequencing of expansion.
Used this way, e-commerce reduces the risk of scaling the wrong message or entering the wrong markets too early
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How I Think About It
I don’t think of e-commerce as a short-term profit center.
I think of it as a learning system that helps:
Improve marketing efficiency
Focus sales efforts
Reduce costly mistakes in retail expansion
Build a clearer picture of the customer
The return isn’t immediate, but over time it can materially improve how a brand grows.
That’s the role e-commerce plays for us, and that’s how I’d encourage other beverage alcohol brands to think about it.
About the author:
Harry McKaig is the CEO of Double Cross Vodka and a board advisor to emerging CPG brands. An MS in Finance from Georgetown University, he has over 2 decades of executive leadership, sales and marketing in the beverage space and brings deep expertise in revenue operations, go-to-market strategy, and brand development.
