October 23, 2009

Amazon quits the wine industry

posted by philip in Snooth

Today marks a sad day for the wine industry: Amazon Wine, yet to launch, may now never see the light of day. I’m sure many retailers, wholesalers and even some wineries are breathing a collective sigh of relief at this news, for Amazon, with its history of pricing, service and operations, threatened many a wine business.

For you and I, as wine consumers, this is bad news. Its also bad news for Snooth, as a company that is fighting the good fight to help demystify the arcane and convoluted world of wine. While Amazon may have ultimately become a competitor of Snooth, they stood the best chance of any company out there of shining a light in all the dark nooks and crannies of the industry. Hopefully putting an end to shady and illegal practices such as bait and switch, selling a wine that the store doesn’t yet have in inventory, using shipping as a profit center, dual pricing and so many more.

Many of us hoped that Amazon would use its might to force these issues, and others, into the spotlight, forcing new regulation, opening up consumer choice and making the wine industry a better place for all of us. Sadly, these hopes have just been shelved for the next few years.

This story is breaking now, and you’ll be able to keep up with it via Wine Industry Insight and Wine Business amongst others.

by Twitter Trackbacks for Snooth Blog » Amazon quits the wine industry [snooth.com] on Topsy.com · October 23, 2009 at 7:53 pm

[...] Snooth Blog » Amazon quits the wine industry blog.snooth.com/2009/10/23/amazon-quite-the-wine-industry – view page – cached Today marks a sad day for the wine industry: Amazon Wine, yet to launch, may now never see the light of day. I’m sure many retailers, wholesalers and even some wineries are breathing a collective… (Read more)Today marks a sad day for the wine industry: Amazon Wine, yet to launch, may now never see the light of day. I’m sure many retailers, wholesalers and even some wineries are breathing a collective sigh of relief at this news, for Amazon, with its history of pricing, service and operations, threatened many a wine business. (Read less) — From the page [...]

by Martin Gauthier · October 24, 2009 at 6:19 am

This is a big relief for the industry. It leaves tonnes of opportunities….

by uberVU - social comments · October 25, 2009 at 6:44 am

Social comments and analytics for this post…

This post was mentioned on Twitter by Philip_James: Why Amazon leaving the wine industry is bad for the industry: http://bit.ly/9ZkRl...

by Ian Griffith · October 25, 2009 at 12:39 pm

A little confused by your suggestion that Amazon would have shed light on the “dark crannies” of stores selling inventory they don’t own. Surely Amazon is the grand-daddy of retailers that sell items they don’t own, as outlined here: http://www.bevsites.com/index.php/2009/06/does-it-exist-and-is-it-priced-too-low/. If any light was to be shed surely it would be from improved access to accurate supply chain information to make selling this inventory easier for other retailers.

I also take issue with the suggestion that these practices are shady and illegal. There is nothing illegal about a retailer selling wine futures or presells, how is this different from selling wine the retailers knows is in stock at a local wholesaler? There may be individual retailers that are unethical in the way they handle these transactions but there is nothing illegal or shady in the practice itself.

by Christian Lane · October 25, 2009 at 12:55 pm

Well, there’s nothing like price slashing to catch attention on either side of the fence. I can attest to the value of the Web 2.0 model for propagating wine opportunities for consumers and sellers alike. Conversely, what we’ve been looking at since the dawn of domestic wineries’ replication of the direct-to-consumer outreach is: how to reach the “end user” in a meaningful way? How do we demystify what’s in the bottle and justify the purchase as the relevant one? How do we recreate the ephemeral quality of a wine experience and promise that potential time and time again with accuracy, romance and fidelity? The crux: how do we bring the wine to the consumer’s table with the assurance that (s)he will return to capture that experience again, across vintages and varietals? The endeavor for horizontal and vertical client-building relationships boils down to one thing: value. But to pull the cork for consumers is the only viable way to create the perception of desire. We’ve become victims of our own technologies in a way. We’ve been trained for centuries to displace our own higher knowledge and put it in the hands of our leaders – first cultural, then religious, and now economic. There is no match for wholesale point-and-click discount when wine consumers thirst strictly for the deal. But we all know that in order to work prudently and profitably within this Amazon-minded dilution of the wine experience, high production wines are the only inventory that can fulfill the model properly. Therefore, in this AmazonWine world, which participants would have won? The million-casers and the plonk-swillers. Who would have lost? The connoisseurs and the boutique wineries, which are the producers that can tell you a lot more about what to expect in that bottle than the corporate megalith in alliance with Amazon that a) deprioritizes quality and b) leverages the fundamentals of economy of scale to purvey what boils down to a profit-generating product. (I find “product” such a diminutive term for wine.)
Come on, don’t we eschew patronizing WalMart in favor of the family business? Let’s put the power of marketing back into the hands of honest-to-goodness wineries and let them maintain their values, brands, and above all – their pricing. Wine Societies, in my opinion, places that power where it belongs. Very searchable – see what I mean, and catch onto this revolutionary new way of transacting in a respectful manner, where everyone wins and nobody fails to understand the true value of a wine.

by Accellarate Consulting · October 26, 2009 at 11:09 am

So Amazon’s out of the wine game. I think I’m going to – sniff….
Well, there’s nothing like price slashing to catch attention on either side of the fence. I can attest to the value of the Web 2.0 model for propagating wine opportunities for consumers and sellers alike. Conversely, what we’ve been looking at since the dawn of domestic wineries’ replication of the direct-to-consumer outreach is: how to reach the “end user” in a meaningful way? How do we demystify what’s in the bottle and justify the purchase as the relevant one? How do we recreate the ephemeral quality of a wine experience and promise that potential time and time again with accuracy, romance and fidelity? The crux: how do we bring the wine to the consumer’s table with the assurance that (s)he will return to capture that experience again, across vintages and varietals? The endeavor for horizontal and vertical client-building relationships boils down to one thing: value. But to pull the cork for consumers is the only viable way to create the perception of desire. We’ve become victims of our own technologies in a way. We’ve been trained for centuries to displace our own higher knowledge and put it in the hands of our leaders – first cultural, then religious, and now economic. There is no match for wholesale point-and-click discount when wine consumers thirst strictly for the deal. But we all know that in order to work prudently and profitably within this Amazon-minded dilution of the wine experience, high production wines are the only inventory that can fulfill the model properly. Therefore, in this AmazonWine world, which participants would have won? The million-casers and the plonk-swillers. Who would have lost? The connoisseurs and the boutique wineries, which are the producers that can tell you a lot more about what to expect in that bottle than the corporate megalith in alliance with Amazon that a) deprioritizes quality and b) leverages the fundamentals of economy of scale to purvey what boils down to a profit-generating product. (I find “product” such a diminutive term for wine.)
Come on, don’t we eschew patronizing WalMart in favor of the family business? Let’s put the power of marketing back into the hands of honest-to-goodness wineries and let them maintain their values, brands, and above all – their pricing. Wine Societies, in my opinion, places that power where it belongs. Very searchable – see what I mean, and catch onto this revolutionary new way of transacting in a respectful manner, where everyone wins and nobody fails to understand the true value of a wine.

by philip · October 26, 2009 at 3:30 pm

Ian – I can’t comment on each and every state, but in California and, I believe, New York, and probably others, its illegal for a retailer to sell a wine that they do not physically have possession of at the time of sale. That includes futures, presells, wine thats at the warehouse and so on. I’m not saying stores don’t do it, I’m just saying its an illegal practice. A little like shipping across state lines, or into states where the retailer is not licensed. These practices are rife in the industry, I was hoping that Amazon would challenge a lot of these practices in court, leading to regulation that was at least 20th century compliant, if not 21st.

by Tracy Hof · October 26, 2009 at 7:14 pm

not sure how anybody would think amazon selling wine could be a good thing. I think we have enough mega retailers glutting the market and underselling the smaller local shops who are actually trying to educate and have a relationship with their customer.

by Ian · October 30, 2009 at 9:59 am

Philip, consignment sales are illegal but that doesn’t cover all sales of wine where a retailer doesn’t own the product. There are common practices which are perfectly legal that involve a retailer selling an item not in the store. For instance when you ask a store to bring in an item they don’t have in stock; that’s not illegal.

by Ian Griffith · November 19, 2009 at 3:16 pm

Phillip, to clarify this issue I put together a blog post of my own.
Is It Legal to Sell Wine You Don’t Own? http://www.bevsites.com/index.php/2009/11/is-it-legal-to-sell-wine-you-dont-own/

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