Differences in retail bottle price

Hello. I’m starting to build a cellar and have been researching a number of bottles I’m interested in. Why is there sometimes such a significant spread in price between retailers? For instance, in the NY market, I’m tracking two large, reputable shops selling 750ml '18 Angelus; one at $390 and the other at $550. Same thing for '18 Chateau Haut-Brion; one at $599 and the other at $825. I would expect that sellers would at least want to be within 5-10% of the lowest offer listed on Wine-Searcher?

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A lot of wine from what I see gets imported into NY and many retailers choose to ship online. I could see a smaller boutique shop wanting to sell it for more because their rent might be higher for example and they need to make a certain amount when the price calculation isn’t just a flat mark up, but it accounts for everything like overhead. Their buying power might be less so they might not be getting case discounts for these more expensive wines. My shop does not order cases of high end wines typically. We’ll bring in high end wines as needed ie: La Tour, Clos de Tart, etc. The exception might be if allocations absolutely require some sort of case buy like Opus.

Lawrence,

Welcome to Wineberserkers.

It is difficult to be specific without knowing the outlets that you are comparing. However, I can offer some generalizations related to sourcing and target customers. When I lived in NY there was a particular store on Park Ave that listed many interesting bottles at market low prices. However, after walking into the non-air-conditioned store and noting the shrink-wrapped bottles {to protect against dust from the open doors} you would walk away wondering both about the source and the condition of the wines while on your way to a more respectable merchant with actual customer service.

Similarly, in LA there is a particular merchant with a wide offering of ‘brand name’ bottles at prices only a studio head trying to impress an A-list star would pay. Regular wine drinkers simply purchase from one of the other merchants whose deliveries arrive by van rather than Bentley.

The best advice I can offer is to research the reputation and business model of local merchants (a search here is a great start) and select two or three that fit your profile of offerings, service, and price. There is no reason to chase the lowest possible price, especially when dealing in the level of wines that you describe.

Eric

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Retailers have different costs (rent, salaries, storage costs, delivery and logistics, etc.) and they spread out that cost across their entire product range.

Most retailer don’t just mark everything up by the same amount, rather the markup varies. Some SKUs that may be very high volume may be marked up less. Other times some more inelastic products may be marked up more. There’s no uniform approach to product mix pricing.

Retailers also have different customer bases with different price sensitivities and sometimes they shoot for the stars and miss. Other times they manage to find a price insensitive customer willing to pay that price. Often that higher priced wine will take longer to clear, but as I discussed above retailers have different costs involved, so some may be willing to wait longer for a higher price, while others would prefer to sell it all quicker. The higher priced merchant also has the option to lower the price later to clear the inventory should they choose.

Just because one decides to list something really high, doesn’t make it market clearing. Other times, they manage to hook someone that’s highly price insensitive to sell to.

Also important to nose is that even if it’s the same wine, it doesn’t mean that the all retailers had the same cost in acquiring that wine.

Let’s take your example of the 2018 Haut Brion in NY to showcase a few of the dynamics that may influence variance in pricing.

Bordeaux wines for the most past are sold as futures or en premiuer as the French call it. So the wine pre-sold for a future delivery date, usually two years ahead of time, so most of the 2018 Bordeaux wines were sold en-premiuer in 2019 for eventual delivery in 2021. En premiuer is usually when one finds the best prices for these wines, and prices usually rise, to varying degrees, over times. That’s one factor that can influence the pricing of a 2018 Haut Brion.

The retailer that priced the Haut Brion at $825 is located in midtown Manhattan, while all other NY retailers listed on wine-searcher (as of this writing) are located outside of Manhattan and many outside of NYC, so the rent they need to cover varies widely.

That high NY retailer operates a storage company as well, so I suspect they are comfortable holding inventory longer, versus wanting to sell it all quickly.

They also have different customer bases with different sensitivities. Let’s say a well-off executive working in Midtown Manhattan executive wants to drink 2018 Haut Brion tonight, but doesn’t have a bottle on hand. All NY retailers except the $825/bottle one are located outside of Manhattan, so they’d would likely be unable to deliver it on time. It’s times like these that that $825 bottle becomes a viable option for that customer.

Plus, that retailer always has the option to run a sale and lower the price and sell the inventory.

Those are just some of the factors that play into the discrepancies in pricing. It’s a dynamic market, with some retailers trying to extract as much profit as they can from customers and succeeding to varying degrees.

Really appreciate the responses. Thank you!

The types of price differences you’re describing are most likely not entirely (or even mostly) due to markup. The Bordeaux supply chain is extremely convoluted. Producers often don’t even know where their wines go because there are so many intermediaries before something ends up at a retailer in the US. Some retailers buy much more directly than others and are thus able to offer much lower prices. Even with regular 3-tier distribution, it’s not unusual in my market to see the same Bordeaux offered by 3-4 different distributors, at sometimes wildly different prices. I think differences of the magnitude you’re mentioning have more to do with differences in supply chain than differences in markup. As a retail buyer, I would regularly see other retailers offer Bordeaux wines for less (retail price) than I could buy them for (wholesale).

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I had seen Buena Vista Cabernet Sauvignon, Napa Valley (750ml, 2019) on Vivino for $50-60, and was buying it for $50 at a local Total Wine & More.

A few days ago, I saw it for $36 at Costco, so bought a couple, thinking I got a great deal.

Then, I looked at Total Wine web site this weekend, and I see they lowered their price to $36. I checked Vivino, and the price was down to $34. What gives?

I was surprised that TW&M dropped their price so much…and surprised that they were ripping me off for $50.

Do prices typically swing this much so fast?

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@MNoonan - Welcome to the site. I don’t follow Buena Vista at all but I do notice that’s a 2019. It may be that either the wholesaler or the vintner is looking to clear inventory out of the market to make room for a new vintage and lowered the price in order to do so. You’ll see this all the time, particularly with wines with higher sales volumes or wines that simply aren’t selling.

Also realize that prices vary wildly between different state markets, so make sure in looking at Total Wine’s site, you’re seeing the pricing in your local market.

That said, if you check out the listing on wine-searcher.com, you can see what many merchants are currently charging for a vintage and there’s an analytics tab that shows the price history across time. The list shows that $50/bottle is a bit on the high side for that wine. See

2019 Chateau Buena Vista Cabernet Sauvignon

I don’t understand your thinking. You were happy paying $50/btl until there was a decrease in the price and now you accuse the retailer of ripping you off. Didn’t the retailer you were buying from for $50 also lower their price? Then how is it a rip off? Wholesale price drops and retail follows suit.

Mental note to self. If I never lower prices on my products when wholesale prices drop I’ll be a thought of as a crook. Conversely, if I lower my retail prices when wholesale prices decrease I’ll instead be thought of as a crook. Win win! :face_with_raised_eyebrow:
I love being a retailer.

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Thanks Rick. It was listed at the higher price on a couple sites, then went down suddenly. I was surprised to see it drop at the same time on three sites/vendors, and wondered if something happened.

Good point, Brian. “Ripped off” was a poor choice of words. My apologies. This wasn’t a discount, though. It was a coordinated drop by several sources. I was wondering if this is normal.

Sometimes happens with a change in distributors, orphaned wine. I doubt that’s the case here.

Total Wine price comps Costco. Costco works at max 13.9% margin on wine and buys trucks of product to get discounts, so Costco negotiated a buy at $31 a bottle sold it for $36 and Total on their weekly Costco survey dropped the price to $36 to match Costco, likely below their acquisition cost, but legal in most States.

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