Selling wine on line

by Eve Resnick on October 8, 2008

in General

Selling wine on line is not a novelty. Wine.com was one of the pioneers and, after many ups and downs, became the major wine store on line we now know. Nowadays on line wine stores are more and more numerous, inversing what’s happening in the brick and mortar world. Thirty years ago, there were 12,000 wine wholesalers while there are only 200 nowadays, said Jeremy Benson to New York Times journalist Claire Cain Miller. “As a result, more and more people visit vineyards, can’t find the wine they want in the store and go online to buy it.”

This statement is in direct contradiction with Barbara Insel’s analysis as reported by Miller: “Wine purchases are driven by recommendations from trusted firends or salespeople, a visit to a winery or a special experience at a restaurant. You don’t get that just from going to a Web site. It’s the ultimate experiential purchase.”

It is not true anymore with the Web 2.0 on line stores, such as snooth.com, redpinkwhite.com or americanwinery.com. Those sites have all the Web 2.0 features: on americanwinery.com, for example, winemakers can post their tasting notes and give tips to potential tourists, wine drinkers can buy, rate, review and discuss their bottles, a blog offers recipes, wine pairings and interviews, a wine encyclopedia defines terms from A to Z. This is the ultimate experiental purchase – with a total refusal of the top-down messaging strategy.

What is the business model of americanwinery.com? The site is free for wineries and customers. The wineries set the price of their bottles. When a bottle is bought, the site processes the payment and the winery is in charge of the shipment. Lloyd Benedict, founder of the site, doesn’t want to deal with shipping: it’s too costly and complex. Americanwinery.com keeps 10% of the purchase and gives back 90% of the paid price to the winery. This is the big difference between Benedict’s site and other resellers or wholesalers: a typical distributor would give 50% of the sale price to the winery.

The philosophy behind the site is very trendy. Benedict, a 24-year old entrepreneur, surfs on the interest of consumers for local products. His site encourages consumers to buy wines produced next door to them. The wineries are usually very small operations, producing less than 1,000 cases a year with no access to general distribution or with no capital to start their own on line store. Direct sales through americanwinery.com is a very good deal for them.

From wine.com, so typical of web 1.0 to americanwinery.com, snooth.com or redwhitepink.com, latest expressions of web 2.0, there is the long road into the 21st Century.

Comments on this entry are closed.

Previous post:

Next post: