The Wine Collector

This is certainly entertaining all the speculation around the Amazon launch. This will be good for the industry as it will drive more people to the web. May be bad for the industry as regulators may scrutinize more? "Consignment " hmmm regulators have fun.

Project selection of 5000 to worlds largest will be entertaining as I am confused what will move.

Pricing model good for consumer that is preferred Amazon member.

In reference to NVL competition loser-NOT. NVL has yet to prove it can make money seeking additional as we speak and look at the margins- this will create a huge opportunity for its competitors. The vultures are circling based upon this reinvention.

This is all going to be entertaining at best!

This is some interesting stuff, many people have tried this model, and many more are actively following this with the hopes of learning where others make mistakes in the online arena. And thanks for the mention of my classicwines piece! I still think the Kindle will be used at some point, and would be a waste if it wasn’t. Kindle owners are an automatic built in demographic:

1) They bought new technology at a premium, so they are not shy to embrace the “new” and have the cash to do it.
2) In an effort to justify the device, Amazon and the owners are both using them for different purposes, many people in literary circles are using them for reading proofs, uploading emails (at a per email upload price) and any and all electronic texts for on-the-go reading.
3) The fact that you can have content such as blogs and websites downloaded via cellular xmission for FREE is what really opens things up. Having a comparative wine list with you 24/7 will make a WS Buyer’s Guide tear-out look like a piece of chiseled stone.

I am curious to see how well this works for everyone else besides Amazon. I think the larger market wines will win with this, the already well known names that you see in the grocery stores versus the harder to find and allocated wines, and Amazon seems to know that via their list so far.
This model also bodes well for a more transparent wine market throughout the US, I bet FreeTheGrapes is pretty happy with this… and I bet wine.com is dead behind the eyes on this one…

An excellent summary of the facts, pros & cons, and affected parties. I wish I'd written it! Thanks for linking to my blog.

it's an interesting move, but one that I think will turn out to be less significant that many assume unless Amazon really expands the program to cover a majority of the wines out there.

1) the common, everyday wines are still ones that people will want to pickup at the market as they shop for food. It's the "grab a bottle for dinner tonight" impulse and no online program will satisfy that.

2) Wine retailers will retain their local customers for the wines that they carry in common with Amazon for much the same reason. This will be less true if the retailer's customer base is spread out over a large area as the convenience of shipping is larger then.

3) Online retailers have little to fear either in the short term IF they sell mostly fine and allocated wine AND if they also sell older wines.

Online buyers are driven by either knowing that retailer and their reputation or by searches on Winesearcher.com, winezap.com etc. The main worry I'd have if I sold wine online would be that Amazon would overlap my stock and compete with me on price. That WILL be a threat to online sales if my online sales. To the degree that my wines are things Amazon can't get (older wines from cellars, allocted wines) the threat is less.

Service will be a differentiating factor here too - if I buy a case of high end wine in July but have it held for shipment until the weather has cooled in November that's important to me. Is Amazon able to do that? Or will we see a ton of heat damaged wine out there because they'll ship that case of wine in 105F weather?

Also I wonder about the uptake of this by wineries. I think you're spot on as to which will be interested, but if I were a winery concerned about MY rep, I'd want to know far more about storage of my wine and shipment of it during the May - October timeframe. No, this isn't totally under my control when I sell to a distributor either, but somehow Amazon feels different as if more of any negatives will be borne by the winery.

On Rick's prior comment about how NVL/Amazon will ship wine in warmer weather, I just wanted to point out that New Vine Logistics developed its own wine shipper that might be what they'll deploy to solve this issue. I wrote a post describing it back on January 22, 2008 called "The perfect wine shipper?". Here's a link: http://www.vinfolio.com/thewinecollector/2008/01/the-perfect-wine-shipper.jsp

The only snag is that this packaging is potentially too expensive to be used, even with higher volumes (especially if free shipping for Amazon Prime members is eating into product margins already).

They SAY that it will work. Will it? if I buy rare, expensive wine from Amazon and it fails.. will they replace THAT wine?

As a wine buyer I have zero reason to take that risk when I can go to Vinfolio, Premier Cru, Woodland Hills etc etc and simply have them hold the wine until temperature is no longer an issue.

As a winery... if my wine is shipped and heat damaged what does it do to my rep with the customer who may well pass it off as a flawed wine vs a damaged one?

hi Steve - Nice summary! One thing unmentioned (unless I missed it) is that Amazon will give many wineries access to states for which they currently don't have any direct shipping options - like MA and NJ. That's kinda cool.

Speaking of cool... on the question of Summer shipping... you'll notice that Amazon is starting this right after Summer. When I met with the buyer, he did acknowledge that Summer shipping is an issue they will have to address, and they are actively looking at their options. But for now they wanted to get the ball rolling with the basic setup.

Having worked with Amazon in the past, they do great things but they are far from perfect, I suspect their new play will be just another channel that wineries can participate in. Everyone can imagine what Amazon can do for them if successful, sell a lot of wine, but what if not?

Amazon has issues, and they like just in time ordering from suppliers so imagine them selling out hundreds of small wineries inventories - 2 cases can go quickly. Good luck getting them to reorder small quantities, you can be sold out on Amazon for weeks or even months until they submit an order. For large high volume brands this is not a problem, but for small players its a lot of work for 2 cases and 2 cases is not going to change anyone's business very much. Not to mention you don't get the customer at the end of the day.

"Not to mention you don't get the customer at the end of the day."

This is an excellent point - if you cannibalize your own online sales you're losing money and the customer. Not really an issue if you don't sell direct but if you do you'll want to watch your analytics carefully.

I've heard a rumor that Amazon might add winery URLs to the item pages which could help build direct customer access for wineries. Their rationale might be (I'm speculating) that most of their own buyers would be ordering small quantities or wines from multiple producers so providing the URL wouldn't cannibalize their own sales much. Moreover, presumably the winery would maintain the same retail price on its own site and Amazon's which still leaves the Amazon buyer with lower shipping costs and faster delivery (especially if Prime member), a single reliable supplier instead of potentially dozens of individual wineries, and perhaps access in states the winery won't ship to.