Wine Talk

Snooth User: dmcker

Amazon pulls out of wine sales

Posted by dmcker, Oct 23, 2009.

Scuttlebutt is that Amazon has been distancing themselves from their online winesales venture since September, and that a senior account mgr for 'business development-wine' has sent around an email notifying their partners that they are out. The version of the email I saw seemed smarmily vague in its apology to its partners while making it clear Amazon is out.

As reported in Lewis Purdue's 'Wine Industry Insight', the bad economy and collapse of New Vine Logistics, which was an Amazon fulfillment partner, have been causes. Other fulfillment partners seemed less interested in cooperating with a slowing, less clearly navigating Amazon. Supposedly, the California Alcoholic Beverage Control Commission was also applying increasing pressure on their business model. Thus, the decision to pull the plug.

I'm sure a number of online sales competitors are, aside from whatever current troubles they are experiencing, breathing sighs of relief about the gorilla they thought would be entering, and possibly taking over, the room...


Reply by Philip James, Oct 24, 2009.

DM - I didnt write a lot, but did a quick blog post about it here:

Reply by GregT, Oct 24, 2009.

I was working with someone who they had contacted to be one of their importers. The idea was actually very nice - they weren't going to be a schlock vendor as there's no money in shipping out $4 bottles and those customers aren't likely to put in an order a few days ahead of time. Unfortunately, the myriad laws in the various states and counties killed any kind of plan to be a national presence.

Reply by dmcker, Oct 24, 2009.

Philip, wasn't even aware of What is its purpose/positioning vs. the forum, the articles, etc.?

Reply by cigarman168, Oct 25, 2009.

Hi DM, Can you elaborate more for me about this statement : "the California Alcoholic Beverage Control Commission was also applying increasing pressure on their business model" Thx.

Reply by dmcker, Oct 25, 2009.

Hey there, cigarman. Here're a couple of links that might prove informative:
from this past June, which points to obstacles ABC was placing in Amazon's and others way, and
from more than a year ago, which, if you read all the way through, points to how much Amazon was counting on New Vine Logistics for dealing with all the legal red tape around the USA.

Reply by Philip James, Oct 25, 2009.

DM - back in the day the blog was the only way we could communicate with our users (we had no forum, no articles and we only sent one email per month!). Then Greg joined and the editorial became much more important, so the blog was gradually relegated to company announcements, press releases and feature updates.

Its linked to via the bubble in the footer, or you can sign up to receive it via email. It only gets 2-3 posts per month at this point.

Reply by cigarman168, Oct 25, 2009.

We need only business registration license in Hong Kong to sell wines and liquor licenses if you are operating wine bars and restaurants. But internet selling is only counter for less than 10% of total markets sales.

Reply by dmcker, Oct 29, 2009.

From Wine Industry Insight today:
"The biggest victim of Amazon’s dithering and ultimate desertion of its “partners” in the direct wine shipping business is now set to have its day in court with the filing of Chapter 7 bankruptcy liquidation papers....New Vine Logistics slammed the doors and headed for the hills on May 30, after impatient investors pulled the plug following the direct-shipping company’s mounting losses and Amazon’s continual foot-dragging with their primary shipping partner."

A good article on Amazon and the wine business from which it's exiting:

"Because of the large number of brands (6,000+ wineries in the United States alone) and labels that exist in the world, the wine industry seemed ripe for an aggregator like Amazon to come in and help consumers discover and purchase wines that they otherwise couldn’t find in their local wine shops and restaurants. Parallel success stories are easy to find in industries such as books, electronics and music. Sites like Amazon and the Apple iTunes Store are great platforms for exposing the “long tail” of industries that have large selections.

"But, distributing wine is not the same as distributing books...."

NS, Sherlock.

The article seems to be pitching the case for wineries to help consumers out by breaking the logjam. Since my work experience the last two decades has been in the Internet industry, and I've seen what its power and creative thinking can do, my vote still goes for a 3rd party aggregator. Seems like the wine and IT industries need to shift more resources towards lobbying in D.C., Sacramento and elsewhere. Hate to make political cats and their litters of hangers on fatter, but even if technological and marketing change is fast, hardened, clogged political arteries often just seem to be slowing things down...

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