Wine.com lines up to challenge Amazon, just in case

The Internet wine market may soon be heating up.

With Amazon.com expected to announce a foray into online wine sales (no statement yet from the company), Wine.com, a leading online wine merchant, is trying to get some of the attention back by unveiling a new effort to increase its market share in time for the holidays.

Wine.com on Monday announced a new Wine.com “Marketplace,” designed to make it easier for consumers to purchase small-production wines domestic and imported.

These are the wines that direct shipping is made for – boutique wineries that do not have widespread distribution through the increasingly hardened arteries of the three-tier system. These wineries have had to navigate a patchwork of state regulations, permits and fees that often discourage direct shipping even while supposedly facilitating it. Wine.com, founded in 1998, has built its online wine business by working that compliance angle with the states.

“Our Marketplace opens Wine.com consumers to thousands of wines that do not have wholesaler representation and the vast number of wine selections that are typically only sold in winery tasting rooms because they have productions too small to garner the exposure of the traditional wine industry supply-chain,” Michael Osborn, Wine.com Founder and VP of Merchandising, gushed in a press release. “Nothing will change for the thousands of wines, both imported and domestic, with current distribution and presence with Wine.com. The Marketplace assortment will instead expand to provide greater choices to our customers.”

Under Wine.com’s new program, which had a “soft launch” earlier this year, Wine.com will handle all compliance, sales tax, warehousing, fulfillment, order tracking and customer service, as well as the expense of shipping the wine. Wineries will be responsible for delivering the wines to a licensed Wine.com storage facility. That differs from the reported Amazon model, which had the online sales giant leveraging shipping costs but leaving the actual sales and shipping to the wineries. The Wine.com Marketplace will also offer imported wines, while only Napa and Sonoma wineries were to be involved in the Amazon program.

An advantage for consumers would be that an entire order, even consisting of wines from multiple wineries, would arrive at your door in a single package. That could reduce the hassle factor of coming home and finding the FedEx or UPS sticker on your door informing you that your wine will be bouncing around in an un-air conditioned truck for another day. For an upfront annual fee of $49, all of your orders will ship free.

Wine.com says it ships 2.5 million bottles a year. The Marketplace will begin by shipping to 20 states, including Virginia, and the District, but not Maryland.

The Wine.com press release did not identify wineries that will be represented in their new Marketplace, so it will be interesting to see how this program differs from the website’s regular offerings. (Do we really need Apothic Red shipped directly to our homes? I guess so: It is one of Wine.com’s top selling wines, according to the website. Perhaps people are embarrassed to be seen buying it in a store?)

And we really won’t be able to see the Marketplace. A publicist told me there will be no special tab on the website heralding these wines – they will be blended into the shopping list for consumers in the 20 states where they are available. That strikes me as a little cynical – many wine lovers would probably enjoy browsing this special list, like a distinct shelf in the local wine store.

Even if the new Marketplace is simply an effort to add more small-production wines to Wine.com’s extensive sales list, any additional chink in the armor of the three-tier system is welcome news for wine lovers.

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About Dave McIntyre

Wine columnist for The Washington Post, co-founder of DrinkLocalWine.com, and blogger at Dave McIntyre's WineLine (dmwineline.com).
This entry was posted in Direct Shipping, Wine and tagged . Bookmark the permalink.

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