Comments on: Amazon’s Exit From Wine Business Shouldn’t Hurt Wineries’ Online Sales

By: Anthony

Anthony — Fri, 11 Dec 2009 18:20:00 +0000

Our winery, St. James Winery (MO) hasn't really been hurt with Amazon pulling out their wine sales. We've had our site up for quite sometime and it can be seen almost everywhere on Missouri Wine sites and is gaining quite some recognition and awards as well. If the wine is good, it will sell itself IMO. I'm even drinking a glass right now of Friendship School Red wine. Delish. http://www.stjameswinery.com/shop/wine/semi-dry/f...

By: Scott

Scott — Thu, 29 Oct 2009 04:40:03 +0000

you each above miss the point. It is not laws, etc mr h and others it it failed due to poor decision making and lack of senior management commitment support. Not one time did the senior mgr of amazon speak about wine. They put junior managers with a team of 4 on the project. Compeitors that are winning the wine space 1800flowers. and Direct Wines. The leadership of direct wines was all over the press when they launched the wall street journal project. 1800 flowers CEO talks about wine with every earnings report etc, when he is not talking wine they have his wine guy chris Edwards doing press buying companies growing the company. If amazon was serious they would have invested get a clue.

By: John Hinman

John Hinman — Tue, 27 Oct 2009 19:50:08 +0000

[continued] What the ABC did in the trade practice advisory that killed Amazon was to effectively prohibit paying marketing commissions, which are a staple of every other product being sold in the US marketplace. As long as the artifical (and in my view unecessary and leglislatively unauthorized) distinctions between marketing commissions (not permitted) and advertising (permitted) are being enforced by the regulators (at the behest of your good friends the wholesalers BTW) the small winery will stagnate and the consumer will be denied knowledge about, and access to, small winery products from around the US and around the world. Moreoever, the retailers themselves are being harmed because if they want to provide exposure to wines that they think are worthy they cannot unless they stock up on inventory that can only be used in a limited geographic market. The only similar historical era that compares is the 1890's "Golden Age" of the Trusts when a small cabal of very wealthy men controlled US commerce. One only hopes that the situation changes when the US consumer finally wakes up and realizes that it paying a monopoly premium for a small subset of wine products.

By: John Hinman

John Hinman — Tue, 27 Oct 2009 19:49:25 +0000

Jeff, the issue is not about direct shipping. Rather it's about marketing, and online marketing has been hurt. As you note there are plenty of technological tools, and permits, available for winery direct shipping. However you must have customers to ship to in order to participate in the space. What Amazon offered (and what the large brick and mortar retailers have) was access to customers on a real time and convenient basis. The only way to tap that customer base (whether it's Amazon, HSN, The NY Times or whatever) is to pay advertising and/or marketing fees. [to be continued in another comment, teh program made me break it up]

By: Pat Barker

Pat Barker — Tue, 27 Oct 2009 16:48:41 +0000

Myth #1 "The vast majority of Americans don't have legal access to the majority of wines"

Myth #2 "The Amazon distribution channel would have been a first step toward exponential growth in wine consumption."

By: Greg Brumley

Greg Brumley — Mon, 26 Oct 2009 21:56:53 +0000

Tom's comments here (and his complete commentary on fermentation.typepad.com) say it better than I can.

Frankly, Jeff, Eric and Steve miss the point. The Amazon distribution channel would have been a first step toward exponential growth in wine consumption. The fact that it's demise won't reduce wine sales is trivial.

If more people have easy access to a broader selection of any product, more people will buy that product. In a country where only 15% drink wine — and most of them at less than $10 a bottle — access and selection are the keys to industry growth. If the 3-tier distributor monopoly is broken, prices will fall. Hundreds of small family wineries in Sonoma County are shut out of the distributor channel, which denies millions of Americans access to their hand-crafted products, which certainly affects price.

An Amazon channel would have, over time, forced state & federal governments' hands because it would have created a public cry against the distributor monopoly. Without the public being able to experience what some portion of monopoly-free distribution gives them, it's hard for them to see how the monopoly system robs them.

By: Eric

Eric — Mon, 26 Oct 2009 03:12:53 +0000

I'd agree with the poster upthread–if Amazon couldn't pull it off, no one can. It's a pity, but it might keep a great vintage special, eh?