Should You Consider Selling Wine Online? Part Two
In our first article, we discussed the market for wine sales in the US and the rules and regulations surrounding the buying, selling, shipping, and delivery of wine online. Despite the hoops you have to jump through, there are amazing opportunities should you choose to sell wine online. In this article, we’ll offer examples of companies successfully selling wine online, as well as Best Practices you can borrow in your own wine ecommerce efforts.
Founded six years ago in the U.K. by a former Virgin Wines executive, NakedWines.com U.S. was started in early 2012. “Our business model uses crowdsourcing,” says Director of Operations Zack Crafton. “We invite customers to be our ‘Angel investors,’ and each Angel contributes $40 a month to an Angel savings account.” NakedWines.com then aggregates the money to fund independent winemakers from around the world who work with the NakedWines.com winery in Sonoma Valley, CA. “We can then make the wines and sell them to our Angels at wholesale pricing,” notes Crafton. “Some of our winemakers make $1,000 bottles for other wineries, and our Angels can get the same level of wine for $20 a bottle.”
The company typically offers 100 wines at any one time, from all over the world.
“We charge a flat $9.99 shipping fee for mainland delivery, and it’s included in the price for purchases over $100 except for MA, NJ and AZ where we have to charge $19.99 and cannot include shipping. Hawaii and Alaska customers pay air freight rates,” says Crafton. Most people take advantage of the over $100 purchase with shipping included.
The company currently has 100,000 Angel members. That’s right. Oh, and by the way, there are 18,000 people currently on its waiting list.
Club W, a monthly wine subscription service, was started by a group of business owners, with the idea that the experience of drinking great wines and being educated on them is something that should be available to everyone. New subscribers take a “Palate Profile” when they sign up, and the company offers a money back guarantee on every bottle of wine sent, says Kjiel Carlson, Vice President of Operations.
A typical bottle costs $13 and shipping is free with a purchase of six or more bottles. Otherwise the company subsidizes shipping, for a flat rate of $6 for a purchase of three to five bottles (shipping is only to the mainland U.S.)
Still want to sell wine online? These tips should help:
- Get (and Stay) Compliant
With the challenges surrounding shipping alcohol, it would make sense that a company was created to deal with that, right? Both NakedWines.com and Club W, along with many other companies, use ShipCompliant to stay on top of the complex and changing world of shipping wine.
ShipCompliant was launched in 2005 to address the need for any winery to access up-to-date state regulations and tax rates for direct wine shipments. The company also connects ecommerce stores to the industry’s best in-house and third-party fulfillment options, and more. ShipCompliant Direct (for wineries) starts at $79 / month for the smallest wineries, and goes up based on how much wine they ship.
Wondering why we haven’t mentioned beer or alcohol? “You can’t ship beer or spirits direct-to-consumer, generally speaking,” says Rachel Bush, Marketing Coordinator at Ship Compliant.
- Offer Quick and Free Shipping
Getting orders quickly is not only something online customers want, but in terms of wine, the sooner the wine gets to you, the more likely it will be in good form, and not spoiled. In addition, wine is heavy, and online customers are justifiably wary of shipping costs. Offering quick and free shipping (at a minimum threshold) takes away the fear of high shipping costs and minimizes spoilage.
Here’s how to send your wines quickly while minimizing the financial hit, from the operations gurus mentioned above:
- Use several warehouse locations to minimize shipping charges
- Choose temperature-controlled facilities to reduce spoilage and returns
- Stop sales and shipping in the summer; many small wineries do this
- Ship wine with with Styrofoam and ice packs – this will keep wine cool for two to three days
- “Consider shipping only certain days of the week, and not on Friday, so wines don’t get stuck in a warehouse over the weekend,” says Crafton from NakedWines.com. “Even with ice packs, wines suffer if you leave them in heat long enough for the ice to melt.”
- Offer Many Delivery Options
As we mentioned in our first article, one of the biggest challenges of selling wine online is delivering it into the hands of a 21 year old and over adult, as required by law.
Here are some of the creative ways our operations experts shared to take care of this issue:
- Delivering to an office or business
- Delivering to a local FedEx office for pick up when it’s convenient
- Use last mile local delivery services such as Doorman, available in select cities such as San Francisco, for evening deliveries
“For a new U.S. winery that wants to sell online, my biggest advice is to find the right partners,” says Carlson, of Club W. “To start, you might want to consider working with Wine Direct. Their goal is to help wineries sell more wine. Beyond that, make great choices in terms of companies that can help you with compliance, packaging, warehousing, shipping and fulfillment.”