Arrowood’s best bottlings aren’t for sale on 3 tier.
It’s all about the volume. It’s not the person selling Grand Cru Burgundy making the most money, but the one selling Yellow Tail.
Dennis, my limited retail experience, and it’s been awhile, says retail markup is 1 1/2 times what I paid for it. So skewed a little more towards your end of the spectrum. Thought that was kind of standard. Maybe not, been awhile.
I’ve been told that most wineries purposely set their prices higher than expected retail so as not to compete with and irritate the stores selling their product. I’ve also noticed that shipping charges from wineries tend to be higher because they don’t have the shipping infrastructure to be priced right. I have no qualms about buying wines retail vs. the winery. But I also have no need to be on the latest hot CA winery mailing list. I love Mt Eden and Jeffrey Patterson but we have really good local retail sourcing for his wines here. When I buy Hanzell Chards or PNs they’re always $10 cheaper from online retailers plus shipping is less.
Frank most of the time the winery needs a “guy in the middle” to move product that doesn’t sell completely to the list and to introduce the product to customers. You guys living in CA are much handier to the source and I think that colors your view. I’d likely feel more like you do if I lived nearer to the wineries. I get out to CA about once every three years, at best. The retailers I work with are passionate wine folks, assuming an inventory or tracking down stuff for me from a wholesaler. That said, I’m more of Burg / Euro guy so that colors my view too as I’m always chasing around for small lots of Burgundy and local/online retailers are my allies. Only buying a little Mt Eden, Hanzell, Ant Hill, Eyrie locally.
Sure, price it by the bottle at standard retail but in my opinion nothing wrong with discounts for case quantities…nothing wrong with covering shipping and sales tax as a form of loyal customer support… Just seems odd that a winery cannot have a combination of outlets, still treat their direct customers fairly so they don’t pay that much more than retail and not be considered to be undercutting their retail. Most people buying the wines mentioned at retail don’t buy direct anyway (for the most part different audience) and most people (I think) who bother to buy direct will prefer to buy direct unless it seems like they are getting hit as a result. If a wine is cheaper by 10-15% at retail and the winery has to charge the same sales tax and shipping that could add $3-5 per bottle (which could be another 10% or so), very hard to imagine anyone in the retail chain being upset if the winery covers shipping and sales tax for 6/12 bottle purchases.
Well said. ^^
You’ve got that right.
Craig, your post is thoughtful, it got me thinking I want to clarify what I said. I buy from very few sources anymore, all of them winery direct with one exception, which is Envoyer from where I get all my non-US stuff (Chenin and Champagne). It’s truly just these, no more. Aside from maybe a little Carlisle that gets into retail, which is around here locally in some shops, I simply choose to buy all my wines from Mike directly. But, even if I saw the wines locally and I wanted Kutch or Copain, I’m not going to buy it from the store. I’ll call Jamie or Wells and get the wines direct. That keeps the $$$ in the winery, which is where I want my support to go.
You guys that can’t/don’t have the CA option like me, I understand why you feel the same loyalty for the local store and I do appreciate that. I don’t mean to put that channel down or the people who work hard to do right by their customers. I simply am left with the choice in some instances to choose, and I always choose the winery in the few instances where it may be a choice, including the recent one I mentioned earlier.
It certainly does happen that some wines end up being cheaper at retail, especially around here. And I have occasionally taken advantage of that in situations where I wasn’t offered enough or any of the wines directly from the winery.
At the shop I worked for in Texas, the lowest margins, in order, were beer, wine and liquor. However we sold grocery items, wine accessories and bar supplies, all of which had insane markups.
For every customer that bought a bottle of La Crema we made maybe $1 but for every $12 corkscrew we made $8 and for every $8 sandwich we made $6. Rough numbers, of course, nothing exact.
I left a club once for this. I was on the highest tier, where I was supposed to receive the “best” price then year after year I saw the same wine come out on one of the closeout sights for 20% less than I was getting in the club. I dropped the club after the second time that happened to me.
I don’t think this happens but rarely with any lists I buy off of, and if it does, the odds that the price difference is enough to be worth making a separate order and paying separate shipping for the wine in question is very low.
I think, however, this is quite common with your big wineries, when you buy off their club or buy directly from them at their tasting room or off their website.
For example, I just looked on BV’s website. If you join their wine club, you get 20% off their wines and products. However, their 2012 Tapestry Reserve is $65 from the winery, so with a 20% discount it’s still $52, plus you’ll be paying shipping unless you pick them up in person. At Costco today in Fountain Valley, the 2012 Tapestry Reserve was $39. On WSPro, you can find legit retailers selling this for as little as $23 (Leiser’s) and $27 (Sokolin).
Or look at the 2012 Georges de Latour. $135 on BV’s website, or $108 after your wine club discount. This same wine is widely available at $75-80 looking on WSPro.
Clubs at wineries like BV are neither for the bargain shopper nor the WBer type. I think they exist for one or more of the following: (a) as a convenience to someone who wants to have their wines arrive regularly without having to think about it or do anything, (b) for people who make an impulse decision, probably while visiting the tasting room and having a lovely time, without really doing any homework about the value proposition, and (c) for people who are into the events and tasting room, and maybe the prestige of telling people they’re in the wine club, and don’t really care about the pricing and all.
And that’s fine - I don’t mean to imply that everyone in the world needs to spend a bunch of time paying the least they can for everything - but I think that sort of explains what is going on with those kinds of clubs.
I don’t know of many wineries that are the subject of a lot of interest and discussion here on WB where this is the case, and if it is, it’s more likely a single bottling or two from a winery that pop up on a discount somewhere, not a consistent and large discount available widely at retail as compared to the winery’s price. If that were the case, I wouldn’t be buying from that winery either, probably not at retail or direct.
I understand that wineries walk a fine line about not undercutting their distributors, but they should feel even more strongly about not undercutting their club and list members. I get that they aren’t responsible when a store somewhere clears out a wine of theirs for cheap and I have no problem with that happening, but if you’re consistently selling at substantially above retail pricing, I wouldn’t be part of that. Frank is right that we have connections and fondness for the wineries we love, but I don’t think I’d be feeling much of a connection if they were charging me $53 for wine I could buy for $25-30 in stores and doing so on a regular basis, while pretending I’m getting a 20% discount. Loyalty is a two way street.
If there are club and list members.
I’m not on any lists or in any clubs, nor am I ever likely to be, nor have I worked with wineries that had those things. I would imagine that selling through those channels is a little different from other direct sales.
But in the end, a lot depends on the resources the winery has.
There’s a huge difference between a winery like BV, that has lots of money and resources, and a winery putting out 50,000 cases, and a tiny place putting out like 2000 cases.
The big guy is going to be in every distribution channel because he has a lot of product to move. The middle guy may pick up a few distributors, perhaps not in every state, and will be happy to sell some product through various lists or clubs and that might even make up a significant portion of his sales. He probably won’t get volume rates on shipping and will probably charge you whatever he has to pay and maybe eat the cost of the person who boxes and ships the stuff, or possibly charge some overhead for that as well.
The tiny guy is definitely not going to get many breaks. If there’s a club, someone has to manage it, someone has to keep the web site up to date, the inventory, the special orders for shipping, etc. And that guy may have a single distributor somewhere, or may not and may hope to sell everything direct. That’s not easy without publicity however, and he’s going to have to ship to various bloggers and board members in the hopes that they’ll talk about the wine and create some interest.
But everything has a cost and there are only so many hours in the day. Also keep in mind that every state has different laws regarding shipment of alcohol.
If it were me, I would not want to compete with my retailers on price because believe it or not, it’s hard to get on a store shelf. So I would do something like Ridge and other wineries do - offer something that’s not available through retailers, offer library releases if I can store them somewhere, or offer packages that have an overall discount for buying multiple bottles.
I don’t belong to any clubs because I simply can’t afford it. So I bargain shop pretty heavily.But I’ve been a part of 2 different clubs in the past, 1 was a trendy Santa Barbara based winery that kept slowly pushing prices up and over time found the QPR wasn’t there. The other is a winery that I still love but their wine showed up so frequently on a flash site and at a substantially better price that I quit the club and just buy it through the site when offered. I don’t know if I would do a winery club again unless career wise I got so busy that I simply didn’t have time to bargain hunt any more and more disposable income. I think winery’s offering wine on occasion through flash sites and other methods in an attempt at marketing at or around the club pricing is ok but If I saw it happen repeatedly I would quit the club.
I do agree with the above post, if a winery offers different wines to its club members than what it gets to distributors than there really is no issue.
The only wine club I’ve ever been a member of is the Chateau Ste Michelle club in Woodinville. And that was solely to get pre-sale access to the concerts, not for the wine. Not sure it was worth it, but the cost was relatively low and we saw some great shows there, so I don’t have any regrets. I left that club when we moved out of state about five years ago, and I still have some of that wine sitting around…
This is where I am.
This is where I’m at as well. I buy from at most a hand full of California wineries, all of which are small (Ridge is the only exception), and work very hard at their customer relationships. None of those wines (again Ridge excepted) has much if any retail presence, outside a few bottles that might make it to a very few selected shops - and are likely not cheaper than prices charged direct from the producer. In some ways, the fact that these wines aren’t sitting on store shelves all over is actually part of the filter that brought me to each of these producers in the first place - they are low production, high quality wines that have a strong direct following.
It seems that most here only buy from lists. There are wines out there that IMHO are really worth trying; I often find them at K&L and it provides me a chance to try them without any commitment. Sometimes they are cheaper although not always- K&L is local for me.
Interesting to see lots of folks who are not members.
I’m members of 6 wine clubs and continue to do so for various reasons.
The #1 reason would be, the GREAT annual parties. Each club I’m a member at throws several events throughout the year and they’re always such a blast that I’d honestly join the club just for those perks.
#2 Access of library wines, access to “club members only” wines etc.
and the last reason I join a winery? Price. Sadly I can go into Fred Meyer and they’ll sell me a case of Cristom, Brickhouse or Evesham for 10% above cost. That’s going to be cheaper 90% of the time than what the winery can or will sell it for. There are a few wineries where the distribution is so small that I just buy through them.