Well, I hit the “wine jackpot” today and came into about $10K in personal inventory. I have never sold a wine in my life, and was wondering what the board thinks my best options are. I’ve decided to drink the cheaper stuff and sell off the wines that are worth over several hundred a bottle. The wines I’m looking to sell are as follows, thanks!
3 '59 Latour
3 '66 Latour (two have missing labels)
15 '78 Margaux
10 '83 BV Georges de Latour
6 '47 Casa de Sonoma (original case with wrapped bottles)
Mark, what Pat said. We live in a post-Kurniawan world, and even before that provenance at auction, particularly for an unknown vendor, was very important. At best, the label-less bottles will also attract a discount. Talk with people from the leading Chicago auction houses that sell wine (sorry, I don’t know who they are).
And please, I strongly suggest, try some of these wines, just a bottle. I was lucky enough to have tasted the 1978 Margaux and it is one of my WOTY. You might not want to spend what you would have to to buy a bottle like this at an auction, but what value can you put on an experience like that?
Because of the rent which will be extracted from you by the blood-sucking leeches in the 3-tier system, you have about
$10,000 - (25% RENT) = $7,500
worth of wine.
And that’s before the IRS gets involved.
At some point, if your inventory gets large enough, and if you [or anyone you trust, like, say, your wife, or your brother] has a lot of free time on your hands, then you should give some serious thought to getting an ABC license and opening your own wine store to sell off your inventory [and then maybe staying in the business after that, if you can deal with the headaches].
Provenance is everything in old wine like this, as others have said. If you know it and it is good, the most profitable way to sell it is probably here on Commerce Corner, if you can find buyers. In principle, the buyer and seller should split the vig (or what Nathan calls “rent”). Alternatively, there are many good auction houses including HDH in your home city and Heritage in LA where Poppy works.
If the provenance is not good or is unknown, you should go with Acker in NYC, Rudy’s auction house of choice.
I don’t understand how you get a “jackpot”?
Are these stolen bottles? Did someone die and leave you their wines? A rich friend of yours is moving to Singapore? And a “jackpot” does not come from your own personal cellar, because you had to buy it in the first place, so there was a real cost to it.
Nathan - by ‘3-tier system’ do you mean brokers who deal with collectible wines in the aftermarket? To be honest, I’m surprised that more people don’t see the value that a top level broker (reselling at auction or retail) can prove a collector who is looking to monetize their cellar. Once a collection climbs north of 2500 bottles (and many are WAY north of that number), just the logistics of properly packing and moving all or a large portion become very daunting. Especially in the case where a collector is getting older and can’t physically do the work. In a situation like this, the manpower and freight costs can be surprisingly high when it might take a team of 3 guys 2+days to inspect, pack and palletize all of the bottles for shipment. And this is long before the collection is properly inventoried, organized in the warehouse and then released to the public. Every single one of those steps requires significant effort by many hands.
On the flip side, is it conceivable that you could sell a moderately sized collection piecemeal on commerce corner / craigslist and come away with gross proceeds that are higher than what a reputable broker might offer? Sure. However, I’m willing to bet that once you account for your time sending 50 emails back and forth with buyers who are asking for pictures of each bottle and then packing/shipping each final order, that extra percentage that you were counting on will have evaporated.
Remember, we are talking about a government regulated, perishable product that is not easy to properly appraise in the CURRENT market, and can be logistically challenging to move if in high quantities. Top level brokers provide a service that solves a problem that can be quite daunting to the average collector. Not to mention one of the options above is legal, the other is not.
And on the IRS question - I would not make sweeping generalizations. We recommend that our clients consult a tax professional about the subject. And after a first deal, many come back to sell again.
I’d like to offer a collective thanks to the board for all their valuable insight. I’ve received a PM from a board member (who shall remain nameless) requesting possible prices on a few bottles for a private transaction. This got me wondering as to whether Commerce Corner might be my best option.
It’s all about the provenance. Just like the Taittinger comte @ 60 bucks instead of 140, expect a similar discount if you are forthcoming about poor or unknown storage. I can’t imagine you can come close to auction values for bottles without labels!
