Alcoholic beverage suppliers, whether they are distillers, wineries, or breweries all hold licenses issued by the federal government and the state government. With limited exceptions such as DTC sales for wineries or sales from tap rooms, these licenses do not allow the sale of products directly to consumers.
Understanding the Three-Tier System
The three-tier system, established after Prohibition, separates the alcohol industry into three distinct levels: producers (Tier 1), distributors/wholesalers (Tier 2), and retailers (Tier 3). Each tier must be independently licensed and operated. This system exists to prevent the monopolistic practices that existed before Prohibition.
How It Affects E-Commerce
When a consumer places an order online for alcohol, that order must be fulfilled by a licensed retailer. The brand cannot ship directly to the consumer in most states. This means any compliant alcohol e-commerce solution must have a network of licensed retailers who can receive, store, and ship the product.
AccelPay’s Approach
AccelPay works within the three-tier system by partnering with licensed retailers across the country. When a customer orders through a brand’s AccelPay-powered store, the order is routed to a licensed retailer in a state where the product can be legally shipped. The retailer fulfills the order, and the customer receives their product.
Why Compliance Matters
Operating outside the three-tier system can result in severe penalties, including loss of your production license. Brands must ensure that any e-commerce partner they work with fully understands and complies with these regulations.