Asking for advice/Shoot holes in my plan

Cellar Rats (ITB)
1

I live in NYC and would like to start a wine logistics business. I worked for a fine wine retailer relatively recently while scouting out where I saw opportunity in the market, and was surprised when last-mile/white-glove transport ended up being the most obvious. As a note, I handled very expensive wine daily (DRC et al). It was not uncommon to handle 10+ $40k+ cases of wine per hour (working in the storage warehouse). I enjoyed the work, but obviously the pay doing that work doesn’t make a career.

I have a few ways I can start. I’d like to keep startup costs capped at $30k, though $50k is an option if there’s an obvious reason for doing so. It’s my own cash in the bank that starts this up.

Option 1 is to start with a used Ford Transit Connect (the small one) with a reefer unit. They run around $15k-$20k. If I don’t cross state lines, then a small bond, a trucking permit, and commercial insurance/a parking spot (plus the obvious registered business, bank account, graphics, website..) are all I need. Likely holds around 40 cases tops.

The other option is $25kish for a transit 350 high roof reefer van that’s also used. Holds around 100 cases. Can accept a pallet.

My initial thought is that while I’m slowly getting business from major retailers around NYC and Westchester I can supplement with some of those delivery brokerage apps like lalamove and Curri. If I do deliveries for any of those apps one day, I can just have a white square magnet to cover the company logo. Eventually the business will have enough recurring business that I can hire/train someone to take over driving.

This is a pretty straight-forward business plan. What due diligence would you all recommend? Is it appropriate to just walk into fine wine retailers, ask to see the manager and tell them “I’m considering opening a white-glove last-mile reefer van wine delivery business. Would you consider having an owner/operator in your rotation of businesses to call on? What friction points do you run into often when dealing with deliveries around NYC metro area and long island?”

My marketing plan was to pick a plan above, buy/register/brand the van/business/social media accounts, then physically drive up to my old work (left on great terms, still friendly with) with a branded van and a registered business and say “Hi, I do this now. Here’s a card, consider me for last-mile needs/special-care deliveries.” I’d then do the same with other retailers, then branch out into small distribution companies, in case they have last-minute/last-mile needs.

I’d appreciate constructive criticism from this forum. Don’t hold back - the more direct the better. Thanks for looking.

-Bryan

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Have you done the math on how much shipping with through your business would cost? I see myself and many other on here often complaining about FedEx/shipping costs being very high. They have massive scale and reach, how are you going to compete with their price, or the price of other larger companies? How is your service better or different than others?

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Eric, thanks for the reply. I don’t actually plan to compete with Fedex. I’m moreso servicing a niche white-glove market in the NYC metro area. Example scenarios: Pick up 5 cases of x and deliver to y address. Drive to private collectors house to pack up 24 cases of assorted wine to their specification and deliver to their storage account or to a broker for auction or to their flat in the city. Pick up a case at x retailer to deliver to y event space by 5pm. Etc, etc.

The next service I plan to offer will be when I can enter the 20-24 foot box truck range. Then I can get the permits to do interstate deliveries, such as pick up 5 pallets of x wine from y storage facility to deliver to their delaware location. Etc.

The differentiation in the service is the white-glove service. Trust and dependability, essentially. And for the 5 pallet deliveries, I have personally watched 5 pallets get shuffled around a warehouse because, even after using 3 brokers and scheduling 4 times, the pallets still took 2 additional weeks. There were 4 false starts. “He’ll be here at 9am get those pallets down here!” and then 2 weeks later they finally left the facility. I plan to be a more available service. “I can get to you on Thursday morning. Guaranteed.” and they know it will happen.

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Okay now we are getting somewhere. I could see a certain affluent customer needing this service, the tricky part is meeting those people and selling to them. Hopefully you have connections because those are the only things that matter. You are paddling uphill if you don’t already have a rolodex of clients. This seems similar to like a concierge service. I would include buying/sourcing rare/expensive bottles to your list of services. Best case scenario I see your business as being someone personalized ‘wine guy’,

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Indeed. In my personal experience working in a high-end retailer/storage facility, the customer for the transport service was not the client who owned the wine. Rather, it was the retailer themselves. Even when they had their own in-house service, they still sent out 90% of the orders through various same-day courier services, and admittedly with less-than-favorable vehicle situations for a number of them (non-refrigerated, clunkers, etc). So I still think a lot of the calls I get will be coming from retailers/storage facilities. I think I would like to specialize in the transport for now to remain focused rather than source bottles for clients.

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While this is far from my area of expertise the first question that came to my mind was taking into account insurance costs

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So respectfully, its a glorified courier service specifically for wine? Seems like a hard sell but if you are there and you see the need for a service like this it could work I suppose

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This isn’t an unusual service. Couriers are super common in big cities mainly. And wine transport is big business. There’s nothing wrong with the OP’s idea.

The main issue the OP will have is getting established. Places that need these services probably already have someone. Unless the OP knows there aren’t enough or people are dissatisfied with the existing providers, it’s likely going to be difficult to get someone to switch from their existing provider.

Then again, if the OP is a good salesman and he can pound the pavement and talk to owners and convince them that he’s going to be cheaper/better, then it could work out great.

1 Like
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Thanks for the comments, Andrew. Sales are definitely everything.

I’d like to elaborate on something from my original post:

Getting more specific, with a bit more paperwork and record keeping, I can get the licenses required to also transport pharmaceuticals, which I can use as supplemental income to the wine transport service.

It’s interesting going through the process, thinking through opening this Company. I find myself pretty excited about reefer transport in general. From a standard reefer transit van to the 20-24 foot trucks, there seems to be a high demand and a healthy 14:1 load to van ratio.

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I started my own business from dirt in 1997. Ultimately it turned out to be very, very successful and I sold it and retired early 5 years ago.

The one piece of advice I give, if asked, is know where your first order is coming from.

I watched a lot of people worry about infrastructure or product development, but not on how they intended to sell.

I would go make some calls on prospects and ask what THEY want and what they’d pay before taking anymore steps.

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11

Wanted to jump back here and thank you for this comment. I’ve spent the last 10 days doing just that, and I’ve concluded that I should probably get back into the business of selling wine, build a network in this new again (moved back) city of NYC and see where that takes me. Talk about a full-circle thread, eh? Thanks again :cheers:

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