Will Release Offers ever move to Negotiated Pricing?

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blarmston
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Will Release Offers ever move to Negotiated Pricing?

#1 Post by blarmston » June 26th, 2019, 3:10 pm

All these posts about Peak Fine Wine/ Napa, the potential secular decline of wine sales due to demographics, exorbitant pricing etc, got me to thinking... Will the market for pricing ever move towards a true negotiated, supply and demand type of dynamic structure? Now I'm not talking about pricing in the secondary market of course, but more about the pricing that wineries put out during release and initial offers.

Currently, as we all know, the wineries dictate the price per bottle and the allocation to be offered. And its up to us whether we bite based on their setting of the terms. We have no influence, and its "take it or leave it". Do you think the business will ever transition towards a negotiated market, one where we have the ability to counteroffer the wineries? Not necessarily the size of the allocation, but the price that we are willing to pay per bottle? For example, instead of "here's your six bottle offer at $150/per", its "I am willing to by these six bottles from your winery at $100/per". From there, its a true negotiation, and if terms are agreed upon, great. If not, the winery keeps their bottles and you keep your money. Sure, the wineries would resist at first, but this sort of disruption would need time to become common, and over time could potentially become an acceptable means of negotiating the terms of this sort of sale.

Personally, I do not see this as a possibility presently, or for the next couple years. But as the economy softens and buy side demand weakens, and as the Boomers begin to consume less, I think the pendulum may swing to our advantage as consumers. I know there are many wineries who peruse these boards, so would love to hear from them as well. And I understand that even broaching this topic may land me at the bottom of their allocation lists, but rocking the boat a bit has never stopped me before...

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Re: Will Release Offers ever move to Negotiated Pricing?

#2 Post by Hank Victor » June 26th, 2019, 3:59 pm

I personally believe the vast majority of consumers would hate to negotiate and haggle down prices every time they're offered wine.

In this scenario I think the winery would have to offer its members the same price or very close to it. A big distributor was busted recently for offering special pricing to certain accounts and now must offer everyone the same price with the only exception being by volume.

Imagine this board when somebody haggles down XYZ winery a 33% discount but another person didn't get a discount.
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Re: Will Release Offers ever move to Negotiated Pricing?

#3 Post by D@vid Bu3ker » June 26th, 2019, 4:02 pm

Heck no. Makes zero sense.
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Re: Will Release Offers ever move to Negotiated Pricing?

#4 Post by Michael Martin » June 26th, 2019, 4:04 pm

Not as long as they sellout at their price.

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Re: Will Release Offers ever move to Negotiated Pricing?

#5 Post by Dennis Borczon » June 26th, 2019, 4:09 pm

wholesalers would rebel. They get about 50% of private price to consumers on list. No way the wineries would alienate distribution contracts. (I suppose some ultra hot winery might be different, but they would never haggle with consumers anyway.) The outlet for this sort of thing is Last Bottle or WTSO. You get your discount randomly from a volume reducing tool.

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Re: Will Release Offers ever move to Negotiated Pricing?

#6 Post by blarmston » June 26th, 2019, 4:29 pm

Good points. But what if wineries can’t sell out at their stated offer price? How many wineries actually do that? 25%? 75%? Would at least some be willing to allocate a portion of their yield to this sort of market if it ensured them being able to sell out? Of course it would need to make financial sense for them, but that’s a micro concern for each participant.

And I think it makes some sense. In that it reduces the captive market we are all in and levels the playing field a bit. Great point on distribution networks being upset but like all industries that are disrupted, there is always going to be opposition (see Uber for taxis, AirBnB for hotels, Turo for car rentals).
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Re: Will Release Offers ever move to Negotiated Pricing?

#7 Post by D@vid Bu3ker » June 26th, 2019, 5:48 pm

Start a winery and try it. I’ll look for the bankruptcy notice.
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Re: Will Release Offers ever move to Negotiated Pricing?

#8 Post by David Baum » June 26th, 2019, 6:03 pm

Brian, Thats what places like the restaurant /wine shop near me (I think you know which one) are for. They have huge email customer lists and can sell 50 to 100 cases of a great deal in a weekend for someone looking to clear out inventory without it ever showing up on wine-searcher degrading their brand. Deals like 2010 BV GDLT for about $40 while selling for $125 release price or 2012 Mollydooker Carnival of Love for $35 (several months after it was named #2 WOTY by WS and selling for $75 elsewhere but with 4700 cases they needed to clear a bunch out quietly). When they really need or want to clear inventory out there are plenty of places that can do it for them quietly under the radar

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Re: Will Release Offers ever move to Negotiated Pricing?

#9 Post by Michael Martin » June 26th, 2019, 6:09 pm

blarmston wrote:
June 26th, 2019, 4:29 pm
Good points. But what if wineries can’t sell out at their stated offer price?
1. They become “library wines” sold at an even higher price at a later date.
2. Last Bottle Wines, WTSO
3. Dumped into third world countries with their label blacked out with a Sharpie

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Re: Will Release Offers ever move to Negotiated Pricing?

#10 Post by blarmston » June 26th, 2019, 6:15 pm

Good point David B.

And David Bucker, you seem to be slightly upset by this thread. Maybe I’m misreading, but if I’m not, why? No clue who you are, or whether you may have a link to the business. Sure it may be a silly/idiotic/ unrealistic hypothetical, but I’m simply trying to get some dialogue going. And instead of snarky comments like ‘makes no sense’ and ‘start a winery and I’ll look for the BK notice’, you should elaborate. Absent doing so, I perceive you as potentially just another member of the jaded at life WB club (of which unfortunately, there seems to be a growing population on this board).
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Re: Will Release Offers ever move to Negotiated Pricing?

#11 Post by blarmston » June 26th, 2019, 6:26 pm

Good point on library wines, but what if a winery doesn’t want to sit on the inventory for 3-5-10 years. And they are willing to forgo the higher potential price point down the road. And it is potential because wineries come in and out of vogue all the time. Simply adding 10% per year to the bottle and extrapolating that out five years doesn’t guarantee they can sell the wine at the level. Could be less. Maybe the winery wants to risk manage that possibility.

Again, just trying to strike up dialogue here.
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Re: Will Release Offers ever move to Negotiated Pricing?

#12 Post by Michael Martin » June 26th, 2019, 6:34 pm

blarmston wrote:
June 26th, 2019, 6:15 pm
Good point David B.

And David Bucker, you seem to be slightly upset by this thread. Maybe I’m misreading, but if I’m not, why? No clue who you are, or whether you may have a link to the business. Sure it may be a silly/idiotic/ unrealistic hypothetical, but I’m simply trying to get some dialogue going. And instead of snarky comments like ‘makes no sense’ and ‘start a winery and I’ll look for the BK notice’, you should elaborate. Absent doing so, I perceive you as potentially just another member of the jaded at life WB club (of which unfortunately, there seems to be a growing population on this board).
He’s the only one on here I have blocked. It’s his nature.

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Re: Will Release Offers ever move to Negotiated Pricing?

#13 Post by Michael Martin » June 26th, 2019, 6:34 pm

blarmston wrote:
June 26th, 2019, 6:26 pm
Good point on library wines, but what if a winery doesn’t want to sit on the inventory for 3-5-10 years. And they are willing to forgo the higher potential price point down the road. And it is potential because wineries come in and out of vogue all the time. Simply adding 10% per year to the bottle and extrapolating that out five years doesn’t guarantee they can sell the wine at the level. Could be less. Maybe the winery wants to risk manage that possibility.

Again, just trying to strike up dialogue here.
That would be point #2 in my post.

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Re: Will Release Offers ever move to Negotiated Pricing?

#14 Post by blarmston » June 26th, 2019, 6:43 pm

I dont check Last Bottle often, but every time I get a random email it’s some $15 zin or $25 $hitty Napa blend, not say a $150 bottle from a respected producer. I could be wrong, I am allll the time...
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Re: Will Release Offers ever move to Negotiated Pricing?

#15 Post by Michael Martin » June 26th, 2019, 6:46 pm

blarmston wrote:
June 26th, 2019, 6:43 pm
I dont check Last Bottle often, but every time I get a random email it’s some $15 zin or $25 $hitty Napa blend, not say a $150 bottle from a respected producer. I could be wrong, I am allll the time...
We’re going in a circle here...
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Re: Will Release Offers ever move to Negotiated Pricing?

#16 Post by blarmston » June 26th, 2019, 7:26 pm

Ok, call me dense or stubborn or both ( I can handle it- my GF calls me worse when I don’t call her during a weekend in Vegas), but I still see the feasibility of this.

And I still adhere to the thought that the reason quality and well respected brands don’t end up on LB is because they don’t want to take the reputational hit.
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Re: Will Release Offers ever move to Negotiated Pricing?

#17 Post by Roy Piper » June 26th, 2019, 7:44 pm

In my first release I actually considered a Dutch Auction. Part of me still wonders it it might guarantee a sellout for the first winery that tries it every single year.

Everyone on the mailing list bids for the release. The lowest bid to sell out the last allocated bottle becomes the price for everyone, even those who bid higher.

So if you have 200 cases and 1500 people on your mail list, everyone puts in the price (plus a pre-authorization to run the card if successful) at the highest price they would pay for that vintage and how many bottles.

Let’s say the average order is 6 bottles and the 400th lowest bid price is $134 (which sells out the last bottle, because all other bids are above that price.) $134 becomes everyone’s price who bid above that price. Everyone who bid $134 or more gets their allocation. All those who bid below $134 get nothing. Does not matter if they bought before. Loyalty means nothing in a Dutch Auction.

This would cause those who want the vintage to bid something reasonable otherwise they get nothing. Everyone on the list bids because there is nothing to lose. Prices rise and fall based on the vintage quality. It could work. The winery would have to survive the swings in price from one vintage to the next. But you would always sell out on day one, which has certain economic benefits.

Imagine if Screagle announced they would sell via Dutch Auction. Yes, you, a hedge fund manager who signed up the day before the release can buy as much of you want of Screagle if your price makes the cut. For places like Screagle and MacD and Harlan, suddenly their release price would approach their aftermarket. No need for tastings or anything else. Instant sellout, go on vacation.

For wineries like me, it would be more up and down, with more nail biting. For middling producers, it could be a real big problem.

I find the idea intriguing. I hope someone ELSE tries it someday. [snort.gif]
Last edited by Roy Piper on June 26th, 2019, 7:59 pm, edited 2 times in total.
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Re: Will Release Offers ever move to Negotiated Pricing?

#18 Post by David_K » June 26th, 2019, 7:49 pm

It seems as though it may come across as desperate and a race to the bottom. Why would a winery bid against themselves? It would also alienate everyone who wanted the wine but didn't want to play the game. If the economy tanks, then they either need to lower prices or lower production, or as discussed elsewhere on this thread, find a way to dump the wine through other means to preserve its long-term market position.
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Re: Will Release Offers ever move to Negotiated Pricing?

#19 Post by Ian S » June 26th, 2019, 7:53 pm

Michael Martin wrote:
June 26th, 2019, 6:34 pm
blarmston wrote:
June 26th, 2019, 6:15 pm
Good point David B.

And David Bucker, you seem to be slightly upset by this thread. Maybe I’m misreading, but if I’m not, why? No clue who you are, or whether you may have a link to the business. Sure it may be a silly/idiotic/ unrealistic hypothetical, but I’m simply trying to get some dialogue going. And instead of snarky comments like ‘makes no sense’ and ‘start a winery and I’ll look for the BK notice’, you should elaborate. Absent doing so, I perceive you as potentially just another member of the jaded at life WB club (of which unfortunately, there seems to be a growing population on this board).
He’s the only one on here I have blocked. It’s his nature.
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Re: Will Release Offers ever move to Negotiated Pricing?

#20 Post by Brian Tuite » June 26th, 2019, 8:00 pm

D@vid Bu3ker wrote:
June 26th, 2019, 4:02 pm
Heck no. Makes zero sense.
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Re: Will Release Offers ever move to Negotiated Pricing?

#21 Post by Brian Tuite » June 26th, 2019, 8:02 pm

Dennis Borczon wrote:
June 26th, 2019, 4:09 pm
wholesalers would rebel. They get about 50% of private price to consumers on list. No way the wineries would alienate distribution contracts. (I suppose some ultra hot winery might be different, but they would never haggle with consumers anyway.) The outlet for this sort of thing is Last Bottle or WTSO. You get your discount randomly from a volume reducing tool.
Allocated wines don’t go into distribution unless it’s a “shitty vintage” and the winery does not sell through.
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Re: Will Release Offers ever move to Negotiated Pricing?

#22 Post by NickRut » June 26th, 2019, 8:08 pm

Not sure what the price elasticity is on wine but that’d dictate things a bit. I’d imagine it could be doable once the dust of the release settles. If you don’t sell on first release for say 3 months and have more than projected inventory it’d be a diff way of doing it where it’d be more of a haggle. For the initial release I think it’d be tough to make it make financial sense
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Re: Will Release Offers ever move to Negotiated Pricing?

#23 Post by Brian Tuite » June 26th, 2019, 8:14 pm

NickRut wrote:
June 26th, 2019, 8:08 pm
Not sure what the price elasticity is on wine but that’d dictate things a bit. I’d imagine it could be doable once the dust of the release settles. If you don’t sell on first release for say 3 months and have more than projected inventory it’d be a diff way of doing it where it’d be more of a haggle. For the initial release I think it’d be tough to make it make financial sense
If you were the guy who purchased on release and then saw the winery allowing someone to lowball the price a month later you:

1 - Wouldn’t like how you got used
2 - Would want the same price and demand a refund
3 - Would never buy from that winery again because of the “principle” of the thing.
4 - Would start a post on Wineberserkers bashing the winery for underhanded deeds and overcharging their loyal customers.
5 - Enter complaint here ________________________________
6 - All the above

Face it, if a winery did that you’ld just wait for the second wave where you could negotiate down and never buy on the first release. The winery would lose money and not make wine again.

*Edit typos
Last edited by Brian Tuite on June 28th, 2019, 6:44 am, edited 2 times in total.
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Re: Will Release Offers ever move to Negotiated Pricing?

#24 Post by NickRut » June 26th, 2019, 8:15 pm

Brian Tuite wrote:
June 26th, 2019, 8:14 pm
NickRut wrote:
June 26th, 2019, 8:08 pm
Not sure what the price elasticity is on wine but that’d dictate things a bit. I’d imagine it could be doable once the dust of the release settles. If you don’t sell on first release for say 3 months and have more than projected inventory it’d be a diff way of doing it where it’d be more of a haggle. For the initial release I think it’d be tough to make it make financial sense
If you were the guy who purchased on release and then saw the winery allowing someone to lowball the price a month later you:

1 - Wouldn’t like how you got used
2 - Would want the same price and demand a refund
3 - Would never buy from that winery again because of the “principle” of the thing.
4 - Would start a post on Wineberserkers bashing the winery for underhanded deeds and overcharging their loyal customers.
5 - Enter complaint here ________________________________
6 - All the above


If it happened every year I’d be upset. If not, I’d understand I paid a little extra to guarantee my allocation. Same thing to me as mailing list wines that sometimes can later be found at a discount from retailers.
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Re: Will Release Offers ever move to Negotiated Pricing?

#25 Post by Brian Tuite » June 26th, 2019, 8:17 pm

NickRut wrote:
June 26th, 2019, 8:15 pm
Brian Tuite wrote:
June 26th, 2019, 8:14 pm
NickRut wrote:
June 26th, 2019, 8:08 pm
Not sure what the price elasticity is on wine but that’d dictate things a bit. I’d imagine it could be doable once the dust of the release settles. If you don’t sell on first release for say 3 months and have more than projected inventory it’d be a diff way of doing it where it’d be more of a haggle. For the initial release I think it’d be tough to make it make financial sense
If you were the guy who purchased on release and then saw the winery allowing someone to lowball the price a month later you:

1 - Wouldn’t like how you got used
2 - Would want the same price and demand a refund
3 - Would never buy from that winery again because of the “principle” of the thing.
4 - Would start a post on Wineberserkers bashing the winery for underhanded deeds and overcharging their loyal customers.
5 - Enter complaint here ________________________________
6 - All the above


If it happened every year I’d be upset. If not, I’d understand I paid a little extra to guarantee my allocation. Same thing to me as mailing list wines that sometimes can later be found at a discount from retailers.
Thin ice pal, thin ice. I think I can hear the laughter from Napa Valley coming over the Mayacamas right now into my backyard.
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Re: Will Release Offers ever move to Negotiated Pricing?

#26 Post by NickRut » June 26th, 2019, 8:23 pm

Brian Tuite wrote:
June 26th, 2019, 8:17 pm

Thin ice pal, thin ice. I think I can hear the laughter from Napa Valley coming over the Mayacamas right now into my backyard.
So what happens when a winery sells less product than expected? They sit on product forever or they cut their costs to get rid of bottles? Typically they cut their costs to non direct distribution channels and not directly to consumers from what I’ve seen. This would just allow a different approach. Obviously it’s different for companies that sell out immediately but there are plenty of others that don’t. Clearly I could be missing something but hey, that happens.
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Re: Will Release Offers ever move to Negotiated Pricing?

#27 Post by Randy Bowman » June 26th, 2019, 8:28 pm

Brian Tuite wrote:
June 26th, 2019, 8:17 pm
NickRut wrote:
June 26th, 2019, 8:15 pm
Brian Tuite wrote:
June 26th, 2019, 8:14 pm


If you were the guy who purchased on release and then saw the winery allowing someone to lowball the price a month later you:

1 - Wouldn’t like how you got used
2 - Would want the same price and demand a refund
3 - Would never buy from that winery again because of the “principle” of the thing.
4 - Would start a post on Wineberserkers bashing the winery for underhanded deeds and overcharging their loyal customers.
5 - Enter complaint here ________________________________
6 - All the above


If it happened every year I’d be upset. If not, I’d understand I paid a little extra to guarantee my allocation. Same thing to me as mailing list wines that sometimes can later be found at a discount from retailers.
Thin ice pal, thin ice. I think I can hear the laughter from Napa Valley coming over the Mayacamas right now into my backyard.
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Re: Will Release Offers ever move to Negotiated Pricing?

#28 Post by blarmston » June 26th, 2019, 9:01 pm

Substituting wine for a stock for a moment to try and convey the conceptual point here. Does one go out and complain that the price they paid for say, Apple, is now higher than the current share price? Sure maybe they do maybe they don’t. But in a free market, sometimes you get a stock at a discount and sometimes you overpay and bid higher at a premium. It is what it is. Now not everyone is required to play that game of course. If you don’t want to take your chances with overpaying for a stock, then you sit on your chips. If you are willing to potentially pay a bit more knowing that there is a likelihood that you could pay less or get a discount, that’s your choice.

Point is, there is a risk. You can choose to expose yourself to that risk or not.

You can as a winery, choose to engage in that system where you ‘may’ receive less total revenue for your goods, or you could end up getting more.

You can, as a consumer, potentially pay more to secure a coveted bottle or allocation, or you can choose to propose a price that you are willing to pay. If your bid is filled, great, if not, you’re out.

Supply and Demand. Free Market. It’s a real thing folks. It hasn’t truly come to wine yet, but never say never. And for those who immediately dismiss it, it’s okay, no one likes change...

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Re: Will Release Offers ever move to Negotiated Pricing?

#29 Post by J. Rock » June 26th, 2019, 10:46 pm

This just seems incredibly inefficient (especially for the winery) and I can't really see it making any sense, except mayyybe with respect to consumers who are buying a large amount (at least several cases) of wine.
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Re: Will Release Offers ever move to Negotiated Pricing?

#30 Post by Steve Anderson » June 26th, 2019, 11:23 pm

Brian,

Good point. Not sure we will see negotiatated pricing, but I think this is why we occasionally see multiple bottles of recent releases at auctions such as Wine Bid, Spectrum or Heritage. Wineries are trying to liquidate excess inventories at the best price they can get.

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Re: Will Release Offers ever move to Negotiated Pricing?

#31 Post by blarmston » June 26th, 2019, 11:37 pm

A couple items to address, and then I’m off to catch some 💤 ‘s.

What if there was technology readily available that was efficient at solving this dilemma? That which was accessible to both the winery and the consumer? I’m sure both parties would be amenable to access to that.

And for sure wineries are trying to unload inventory at the best possible pricing to them. Wouldn’t they prefer that their unsold bottles go to loyal buyers instead of dumping them out to discount websites? Assuming the ultimate sale price meets their internal metrics for acceptable profit margin?

I’m just a guy with questions. And it’s nice to see some on this board willing to ponder on the ‘what ifs’ and ‘why nots’...
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Re: Will Release Offers ever move to Negotiated Pricing?

#32 Post by Matt Allen » June 27th, 2019, 6:21 am

I would drop any winery that did a Dutch Auction

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Re: Will Release Offers ever move to Negotiated Pricing?

#33 Post by Scott Brunson » June 27th, 2019, 6:35 am

Brian Tuite wrote:
June 26th, 2019, 8:14 pm
NickRut wrote:
June 26th, 2019, 8:08 pm
Not sure what the price elasticity is on wine but that’d dictate things a bit. I’d imagine it could be doable once the dust of the release settles. If you don’t sell on first release for say 3 months and have more than projected inventory it’d be a diff way of doing it where it’d be more of a haggle. For the initial release I think it’d be tough to make it make financial sense
If you were the guy who purchased on release and then saw the winery allowing someone to lowball the price a month later you:

1 - Wouldn’t like how you got used
2 - Would want the same price and demand a refund
3 - Would never buy from that winery again because of the “principle” of the thing.
4 - Would start a post on Wineberserkers bashing the winery for underhanded deeds and overcharging their loyal customers.
5 - Enter complaint here ________________________________
6 - All the above

Face it, if a winery dud that you’ld just wait fir the second wave where you could negotiate diwn and never buy on the first release. The winery would lose money and not make wine again.
Maybe notreal Alan will start a poll. [berserker.gif]
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Re: Will Release Offers ever move to Negotiated Pricing?

#34 Post by Brian Tuite » June 27th, 2019, 6:39 am

blarmston wrote:
June 26th, 2019, 11:37 pm
A couple items to address, and then I’m off to catch some 💤 ‘s.

What if there was technology readily available that was efficient at solving this dilemma? That which was accessible to both the winery and the consumer? I’m sure both parties would be amenable to access to that.

And for sure wineries are trying to unload inventory at the best possible pricing to them. Wouldn’t they prefer that their unsold bottles go to loyal buyers instead of dumping them out to discount websites? Assuming the ultimate sale price meets their internal metrics for acceptable profit margin?

I’m just a guy with questions. And it’s nice to see some on this board willing to ponder on the ‘what ifs’ and ‘why nots’...
Speculative investments vs consumer goods/consumables. A bit of a stretch IMO but I get your point.

From my experience, wineries that allocate DTC don’t use LastBottle, WineBid, WTSO to move unsold wine. The move lowers the percieved value of the brand. “Did you see Xxxx Cellars dumped all their Xxxxxx on LastBottle for 60% off?” Now that’s great advertising for next year.

They sell to local wine stores/retailers who will be happy take something they normally cannot get in qty. 750 Wines, ACME, BottleBarn and the like cater to that clientele. If a wine continually does not sell through most guys will lower production of that particular bottling in coming vintages to match demand. Taking a big hit to margins year after year is not a good business model.
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Re: Will Release Offers ever move to Negotiated Pricing?

#35 Post by Bdklein » June 27th, 2019, 6:50 am

Matt Allen wrote:
June 27th, 2019, 6:21 am
I would drop any winery that did a Dutch Auction
I would drop any wine that resembled a Dutch Oven.
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Re: Will Release Offers ever move to Negotiated Pricing?

#36 Post by blarmston » June 27th, 2019, 6:55 am

Matt Allen wrote:
June 27th, 2019, 6:21 am
I would drop any winery that did a Dutch Auction
Care to elaborate on why?
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Re: Will Release Offers ever move to Negotiated Pricing?

#37 Post by Alan Eden » June 27th, 2019, 9:11 am

Wouldnt this pricing model end up with nobody paying full price ? its like All clad, they have a sale every six months or so i just wait for the sale and save 60%. If wineries did this they would go out of business.
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Re: Will Release Offers ever move to Negotiated Pricing?

#38 Post by Doug Schulman » June 27th, 2019, 9:37 am

No. For so many reasons.
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Re: Will Release Offers ever move to Negotiated Pricing?

#39 Post by Alan Eden » June 27th, 2019, 9:54 am

Also your assuming excess stock, what if wine gets 100 pts. you Ok with 50% increase, seems only fair
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Re: Will Release Offers ever move to Negotiated Pricing?

#40 Post by blarmston » June 27th, 2019, 10:47 am

Alan Eden wrote:
June 27th, 2019, 9:11 am
Wouldnt this pricing model end up with nobody paying full price ? its like All clad, they have a sale every six months or so i just wait for the sale and save 60%. If wineries did this they would go out of business.
The error in that statement is that All Clad can simply ramp up production if they were selling out at full or close to full price. They have potentially an ability to produce as much product as they want. With wine, there are capacity issues (access to grapes, access to custom crush facilities, access to labor, etc) and cost factors to consider. It hinders their ability to increase supply, thus making their product a finite one.
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Re: Will Release Offers ever move to Negotiated Pricing?

#41 Post by blarmston » June 27th, 2019, 10:50 am

Alan Eden wrote:
June 27th, 2019, 9:54 am
Also your assuming excess stock, what if wine gets 100 pts. you Ok with 50% increase, seems only fair
I believe in free markets, not captive ones. That scenario above could happen, for sure. Or you could potentially purchase a wine at a discount.

And remember- wineries aren't forced into participating, and consumers aren't either.
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Re: Will Release Offers ever move to Negotiated Pricing?

#42 Post by David Baum » June 27th, 2019, 11:14 am

Brian Tuite wrote:
June 26th, 2019, 8:02 pm
Dennis Borczon wrote:
June 26th, 2019, 4:09 pm
wholesalers would rebel. They get about 50% of private price to consumers on list. No way the wineries would alienate distribution contracts. (I suppose some ultra hot winery might be different, but they would never haggle with consumers anyway.) The outlet for this sort of thing is Last Bottle or WTSO. You get your discount randomly from a volume reducing tool.
Allocated wines don’t go into distribution unless it’s a “shitty vintage” and the winery does not sell through.
Not true. Some have relationships and get the wines every year. I've bought six packs of 100 point scarecrow, the judge and more highly rated and allocated wines post release of scores usually below winery release price. It's not common but it does happen

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Re: Will Release Offers ever move to Negotiated Pricing?

#43 Post by David Baum » June 27th, 2019, 11:22 am

NickRut wrote:
June 26th, 2019, 8:23 pm
Brian Tuite wrote:
June 26th, 2019, 8:17 pm

Thin ice pal, thin ice. I think I can hear the laughter from Napa Valley coming over the Mayacamas right now into my backyard.
So what happens when a winery sells less product than expected? They sit on product forever or they cut their costs to get rid of bottles? Typically they cut their costs to non direct distribution channels and not directly to consumers from what I’ve seen. This would just allow a different approach. Obviously it’s different for companies that sell out immediately but there are plenty of others that don’t. Clearly I could be missing something but hey, that happens.
they can also sell it to restaurants at a discount as they will sell at or above release by the bottle or much higher by the glass. Customers are happy to see a great bottle or glass at a fair restaurant list price and poof it's gone without showing up on wine searcher or internet searches. Ever been to a tasting room and there's a close out deal on cases of past vintage? Ever seen 3, 6 and 12 bottle lots of the same high end wine showing up on auction at the same house week after week? There's more than one way to skin a cat

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Re: Will Release Offers ever move to Negotiated Pricing?

#44 Post by Brian Tuite » June 27th, 2019, 11:43 am

David Baum wrote:
June 27th, 2019, 11:14 am
Brian Tuite wrote:
June 26th, 2019, 8:02 pm
Dennis Borczon wrote:
June 26th, 2019, 4:09 pm
wholesalers would rebel. They get about 50% of private price to consumers on list. No way the wineries would alienate distribution contracts. (I suppose some ultra hot winery might be different, but they would never haggle with consumers anyway.) The outlet for this sort of thing is Last Bottle or WTSO. You get your discount randomly from a volume reducing tool.
Allocated wines don’t go into distribution unless it’s a “shitty vintage” and the winery does not sell through.
Not true. Some have relationships and get the wines every year. I've bought six packs of 100 point scarecrow, the judge and more highly rated and allocated wines post release of scores usually below winery release price. It's not common but it does happen
I understand but your example is not the same as what’s the OP is sugesting. Allocations for retail clients are different from trying to move unsold wine.
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Re: Will Release Offers ever move to Negotiated Pricing?

#45 Post by David Baum » June 27th, 2019, 11:52 am

Brian Tuite wrote:
June 27th, 2019, 11:43 am
David Baum wrote:
June 27th, 2019, 11:14 am
Brian Tuite wrote:
June 26th, 2019, 8:02 pm


Allocated wines don’t go into distribution unless it’s a “shitty vintage” and the winery does not sell through.
Not true. Some have relationships and get the wines every year. I've bought six packs of 100 point scarecrow, the judge and more highly rated and allocated wines post release of scores usually below winery release price. It's not common but it does happen
I understand but your example is not the same as what’s the OP is sugesting. Allocations for retail clients are different from trying to move unsold wine.
Understood but ironically same place does that too. Lots of places out there across the country with massive customer email lists that don't sell online.

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Re: Will Release Offers ever move to Negotiated Pricing?

#46 Post by Jason T » June 28th, 2019, 1:22 am

Bdklein wrote:
June 27th, 2019, 6:50 am
Matt Allen wrote:
June 27th, 2019, 6:21 am
I would drop any winery that did a Dutch Auction
I would drop any wine that resembled a Dutch Oven.
I just dropped a Dutch Oven. [wink.gif]
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Re: Will Release Offers ever move to Negotiated Pricing?

#47 Post by R. Frankel » June 28th, 2019, 2:51 am

I think this seems unlikely in its pure form for a bunch of reasons.

Auctions would be most attractive to wineries that regularly sell out (or get close to it). In this situation a Dutch auction or similar mechanism would be good at finding a high price, probably higher than the winery’s release price. OTOH if you are not anywhere near selling out then this kind of auction would tend to find low (or indeed very low) prices.

But: the kinds of wineries that are selling out to their lists are nearly always the same wineries that prize relationships, connections, and long-term buyers. And vice-versa: the customers also value those things. Any kind of pure auction process will necessarily knock out a set of customers. And it opens the winery to being dominated by a small set of massive buyers. E.g. Kapcsandy makes just 650 cases of their Grand Vin per year. How would they feel if one billionaire bought out an entire vintage?

Counterpoint: I think we actually see something like this happening increasingly frequently. I remember a few years back Schrader selling dozens+ cases through a major NY auction house. I’ve seen similar large volume sales from Fourrier and Hudelot-Noellat. Quite a few Bordeaux producers sell several dozen cases of a single recent vintage in large auctions. Just last week HDH moved at auction 20 cases of 2016 Cos, 30 cases of 2016 LLC, 50+ cases of 2016 PLL, etc. At this scale seems like the producers/negociants are testing the ability of the market to absorb large quantity through auction mechanisms.
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Re: Will Release Offers ever move to Negotiated Pricing?

#48 Post by Mark Golodetz » June 28th, 2019, 3:59 am

Horrible idea.
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Re: Will Release Offers ever move to Negotiated Pricing?

#49 Post by Merrill Lindquist » June 28th, 2019, 5:47 am

Simply: No.
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Re: Will Release Offers ever move to Negotiated Pricing?

#50 Post by BenW » June 28th, 2019, 6:12 am

I am (only mildly) surprised by the strong negative reaction to this idea. To take a current example, what if Rhys offered their new sparkling with an IPO instead of the unallocated, bottle limited version they are going with. My (uninformed) opinion is that this will sell out relatively quickly which probably means they underpriced it... but by how much? The solution could be to run the Dutch auction suggested. Ask for bids on, say, three bottle lots with a max case (12 bottle) purchase.
  • I'll take one lot at $200 per bottle or less
  • I'll take two lots at $79 per bottle or less
  • I'll take three lots at $70 per bottle or less
  • I'll take all four lots at $50 per bottle or less
They could even set a min at something above their wholesale price. Hell, Rhys could set their min at the release price and be no worse off even if it doesn't sell out in the IPO.

Now there's no rush to be the first to click on July 16th; no-one feels like they missed out because they had the opportunity to name their price; Rhys maxes their return and everyone gets market information for the next release. Admittedly I think this only works for established labels and hyped newbies that will sell out but I don't see the downside (except to those insiders who were banking on access to a wine at below market rate).
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