Wine Talk

Snooth User: EMark

Amazon Trying to Sell Wine, Again

Posted by EMark, Sep 29, 2012.

I stumbled onto this article, today, about Amazon getting into wine sales.

I, personally, have never bought anything from Amazon, although, Peggy, ocassionally, does so, but for some reason or other, this article intrigued me.

I looked at the Snooth Forum archives and saw some previous discussions of Amazon selling wine.  I assume that problems they have had in the past have been considered in developing their new model.

The way I read it wineries will enroll in this program with Amazon.  Amazon will collect $40/month (seems like a nuisance more than a fee) plus 15% of the sales price (sounds sweet for Amazon).

In return, the winery seems to do all the work--"Wineries will be able to list their products through Amazon, but like other Marketplace sellers, must handle shipping and compliance on their own."  The next paragraph, though, seems to indicate some attempt to help the wineries--"The retailer is also negotiating with shipping and compliance companies to provide low fixed rates for vendors, but nothing has been offered at this time."  That sounds fairly noncommittal to me. 

I was wondering what kind of wineries would try out this option--smaller wineries trying to reach new customers, larger wineries wanting to expand their sales channels?  Also, I am sure the distributors are not crazy about being cut out of the action.

I am a pretty risk averse person and, if I was a winery owner, I doubt if I would be an early adopter.  On the other hand, it is not clear that the risk is all that great--maybe it is and maybe it isn't.  I, frankly, don't know.  As a consumer (closer to my realm of actual expertise), though, it looks OK to me.

Does anybody have any other insights?


Reply by JonDerry, Sep 29, 2012.

Amazon and wine don't seem to go together, but this company is publicly traded and very aggressive...they want to be where ever money, industry, and opportunity is.

Having said that, I don't see this as much of an option for the boutique wineries who rely on their relationships with wine shops to make in-store recommendations...this seems more like for the bigger brands that people are going to buy regardless of where or how, and amazon may have a model here to make the wineries more money who don't care if some retailers/distributors are going to be upset. Thinking wineries like Caymus, Kendall Jackson, Sonoma Cutrer, etc.

Reply by Richard Foxall, Oct 1, 2012.

Amazon has been really successful at creating affiliate programs.  As long as they get a cut, they don't seem to care if they sell it themselves. This could work to the advantage of a smaller winery that wanted to sell direct but not run all the back end themselves.  Just one thought, not something I have spent a lot of time cogitating about.

Also, Amazon's power to work on legislatures in different states could help push the issue of balkanized wine shipping rules.  They've had a big impact on California's collection of sales taxes on Internet transactions, although that is starting to change. 

Reply by outthere, Oct 1, 2012.

Basically they are screwing the 3 tier distribution system but it will basically be on average consumer labels, not allocated brands. The winery will make more money than in the 3 tier so it is a win except that they would have to ship every purchase. Perhaps it will be case minimums?

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