Flippy, flippin flipper?

[Brian_Tuite]

@Walt Hoehler

Flippers are good for the winery and bad for the market.

FIFY!

Flipping merely boxes out consumers who do not have deep pockets.

[Dennis_Kanagie]

@Brian Tuite

Flipping merely boxes out consumers who do not have deep pockets.

The world has always had differences in class. There are haves and have-nots. It’s just a fact. Despite the attempts of Communism, it will always be the same. Hell, even Communism had it’s elite class!

[Brian_Tuite]

@Dennis Kanagie

@Brian Tuite

Flipping merely boxes out consumers who do not have deep pockets.

The world has always had differences in class. There are haves and have-nots. It’s just a fact. Despite the attempts of Communism, it will always be the same. Hell, even Communism had it’s elite class!

Yeah, some people have more class than others. I wasn’t bemoaning class struggles. Artificial inflation of a products price does nothing to promote the enjoyment of the product and has nothing to do with inflation. The majority of us are here because we enjoy drinking wines and discussing our thoughts on them. The Mfr sets the retail price because they know what their product is worth based on mfg costs and added profit margin. Flipping wines and the resulting massive price increases by the producer narrow the market and as someone who enjoys wine that is disappointing.

[Walt_Hoehler]

I fully understand that those with less means to afford the market clearing price might not like the process. There will always be differences.

Besides, why is a winery not entitled to enjoy the fruits of their labor? Why is utility of consumers more valuable than producers?

Brian, I recall you once believed you had good reason to expect higher utility on a sale of some tools, correct? I agreed then and suggest thinking of this from a vendor standpoint.

Attempting to subvert the market mechanisms is foolish. Just ask the soviets or any country that had a pegged/fixed currency at some point (and wasn’t large enough to be close to a ‘fiat’ currency ala China).

[Al_Osterheld]

In most cases, the flipping price is only the market clearing price in a very artificial and restricted market. It’s only the same as the true free market price if 100% of the bottles are flipped.

-Al

[Brian_Tuite]

@Walt Hoehler

Brian, I recall you once believed you had good reason to expect higher utility on a sale of some tools, correct? I agreed then and suggest thinking of this from a vendor standpoint.

That comparison crossed my mind when I posted. I also provide service that needs to be quantified in my retail price. As a vendor i have to gauge my prices against my competitors selling the exact same product. If my customer base had the wine geek mentality I still wouldn’t triple my retail price on something because it was in demand. I do everything I can to enjoy a healthy margin but I still have a conscience.

[Walt_Hoehler]

I don’t see wineries who raise prices as not ‘having a conscience’. They are in a business where costs rise and there are banks to pay.

Al, that is a good point. Which is why wineries don’t often seek to ‘match’ the auction prices for their wines.

[Brian_Tuite]

@Walt Hoehler

I don’t see wineries who raise prices as not ‘having a conscience’. They are in a business where costs rise and there are banks to pay.

The production cost per bottle of Cabernet Sauvignon in Napa Valley is nowhere close to $1,200.00. They don’t pay banks, they are the bank.

[Todd_L]

This is a brief model for the cost of a good wine in Napa from a single vineyard:

It takes 16 tons of Cabernet Sauvignon to make 1,000 cases. Assuming a selling price of $8,500/ton, that translates to $136 per case in grapes. Conservatively, add another $75/case for winemaking, new French barrels, bottles, corks, and foils, and the total cost of producing a case is around $212 or $17/bottle. Using the established Napa model, this wine should sell for 85.00 per bottle.
This is also for a label buying it’s fruit with no vineyard costs.

[DougS]

@Brian Tuite

@Bruce Leiser_owitz

@Clint S Q U I E R

Thanks Kyle - took the words right out of my mouth. Don’t know why people think only CA wines get sold. La Tache should come with its own passport.

You’re not suggesting that DRC/La Tache is representative of all red Burgundy, are you? A little known secret–you can actually walk into decent wine stores all over the US and find red Burgundy for sale. On the shelf. Amazing but true!

Bruce

The same could be said about California Cabernet. Crazy, I know. But the thread was about flipping Cali Cult Cabs. Cult Burgs don’t sit on the store shelves anywhere I ever shop.

Yeah, Bruce, your response made no sense.

[Bruce_Leiser_owitz]

@Doug Schulman

The same could be said about California Cabernet. Crazy, I know. But the thread was about flipping Cali Cult Cabs. Cult Burgs don’t sit on the store shelves anywhere I ever shop.

Yeah, Bruce, your response made no sense.[/quote]

Doug–I’m making a bigger point. All this gnashing of teeth and wringing of hands over flipping of cult wines–be they cult Cabs or cult Burgs–only matters if people decide they “need” to own trophy wines. From my perspective, there are far more excellent wines made in the world than I could ever buy/cellar/drink. So why focus on the tiny percentage of culty wines that are absurdly expensive and/or difficult to obtain?

Bruce

P.S. Over the years, I’ve had a chance to taste many of the culty wines, including SE and DRC. While many of them have been outstanding, they weren’t life-altering for me.

[Jason_T]

@Todd L

This is a brief model for the cost of a good wine in Napa from a single vineyard:

It takes 16 tons of Cabernet Sauvignon to make 1,000 cases. Assuming a selling price of $8,500/ton, that translates to $136 per case in grapes. Conservatively, add another $75/case for winemaking, new French barrels, bottles, corks, and foils, and the total cost of producing a case is around $212 or $17/bottle. Using the established Napa model, this wine should sell for 85.00 per bottle.
This is also for a label buying it’s fruit with no vineyard costs.

I would think once you factored in overhead (non-winemaking salaries, marketing, rent, etc.), it’s a different (much larger) number.

[Dennis_Kanagie]

@Brian Tuite

Yeah, some people have more class than others.

Hey now, some people are like school on a Saturday: no class!

@Brian Tuite

Artificial inflation of a products price does nothing to promote the enjoyment of the product and has nothing to do with inflation.

But it’s not artificial - it’s the free market setting the price. If people are paying it, then there are people who believe it’s worth the money. I also beg to differ with a product’s increase in price promoting enjoyment - you can’t deny that some people (not all) might have increased enjoyment knowing it’s a more exclusive product simply because less people can afford it.

@Brian Tuite

Flipping wines and the resulting massive price increases by the producer narrow the market and as someone who enjoys wine that is disappointing.

As mentioned earlier - get on the mailing list then and get them before they jump up! You can’t blame anyone, retailer, producer, or private person, for selling something at what the market will bear.

If a winery doubles it’s price but loses half it’s customers, that winery is making MORE money because of less overhead.

[Dennis_Kanagie]

duplicate - duh!

[Brian_Tuite]

@Dennis Kanagie

As mentioned earlier - get on the mailing list then and get them before they jump up! You can’t blame anyone, retailer, producer, or private person, for selling something at what the market will bear.

I’m not complaining. Simply stating that people reselling their wines in the secondary market for double retail ruin the market for the rest of the consumers as it causes the winery price to increase. My take, if you want to make money on wine get in the business.

If a winery doubles it’s price but loses half it’s customers, that winery is making > MORE > the same money because of > less > more overhead in leftover inventory

FIFY

[Bryan_Carr]

Are there any wineries or databases that have large amounts of data as to the cost of production breakdown of bottles of wine? Overhead, grapes, advertising, glass, cork, barrels, salaries, etc.? I know that wine in a restaurant is typically priced at 2-3x cost but I wonder if there’s a source of data where you could analyze that from a producer’s perspective. I’ve always been curious as to what percentage of a wine’s cost is due to what factors.

[Ken_Strauss]

Flipping wine whether you like it or not is just old fashioned capitalism. Supply and demand. There is more demand for higher rated wines from recognized reviewers.
Personally I think it is just fine.

Is it any different then selling your favorite ball team tickets for a higher then face value?
One could argue (incorrectly in my opinion) that the people who really want to see the game(drink the wine) have to pay a higher price because of the flippers. Of course you could become a season ticket holder but you then have the risk of the team staying on top(making wine that get the critics high scores).

[Al_Osterheld]

I find it somewhat curious when free market arguments are invoked in discussions about flipping wines from closed mailing lists. The flipper is more like a distributor in a state with a mandated three-tier system.

-Al

[DougS]

@Bruce Leiser_owitz

Doug–I’m making a bigger point. All this gnashing of teeth and wringing of hands over flipping of cult wines–be they cult Cabs or cult Burgs–only matters if people decide they “need” to own trophy wines. From my perspective, there are far more excellent wines made in the world than I could ever buy/cellar/drink. So why focus on the tiny percentage of culty wines that are absurdly expensive and/or difficult to obtain?

Bruce

P.S. Over the years, I’ve had a chance to taste many of the culty wines, including SE and DRC. While many of them have been outstanding, they weren’t life-altering for me.

I see. I think this is more relevant to Napa than it is to Burgundy. With Burgundy, quite a few of the top wines are tightly allocated and commonly flipped. With Napa, one can easily purchase some of the best at release pricing as long as they don’t have to be one of about 4 or 5 names.

[Ken_Strauss]

@Al Osterheld

I find it somewhat curious when free market arguments are invoked in discussions about flipping wines from closed mailing lists. The flipper is more like a distributor in a state with a mandated three-tier system.

-Al

The lists are not closed. The lists are full for a few select wineries. Distributers buy with intent to sell. Many of the current flippers are just ppl who were smart, lucky or just plain liked the wines that now are in great demand. And I think most like me buy the wines to drink otherwise the prices would be lower. More supply the lower the price.