Plus remember this recent news:
Someone’s paying their salaries. Just wish more wineries would consolidate shipping to once per year.
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Logistics and space do make it a challenge, but there are positives too. We stack the cases in the winery and it’s both a nice way for us to remind ourselves how many people support us, and it’s also fun when Berserkers come to visit and see other Berserkers names on boxes.
And while logistics and space are challenges, I prefer them to failing to sell wine…
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sure, i get your point eric. i am however speaking of retailers, not strictly wineries. it is easy to cross reference prices and determine the shipping cost is not baked into all products on offer. most wines at retail have an approximate 30% markup from wholesale. obviously the numbers are a bit different for dtc. i guess i have noticed since the pandemic it appears like more merchants are willing to risk a haircut if it encourages more orders through the door. i can imagine this creates an environment which is difficult for a winery to compete with.
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The headline is a bit misleading, that $170,000 is fully loaded. It includes benefits of approximately $50,000 a year. Full time without overtime is $102,000 a year. Pretty good though.
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Living in the Midwest (i.e., shipping zone WTF?!), I truly hope West Coast wineries will consider charging a bit more to ship to CA, OR, and WA in order to make it palatable for the rest of us.
Literally yesterday, I passed on a case purchase when I got to the shopping cart and discovered shipping was $90. I would have been tempted if shipping was $72, and would have easily pulled the trigger if shipping was $60.
Could the winery have done a flat rate of $30 to the West Coast and $60 for the rest of the continental US?
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How much was the case?
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I work in the DTC part of the wine world and am reasonably well-versed in the myriad costs and means of getting wine delivered. As a consumer who also buys wine from wineries (almost always as a club member), I am puzzled by wineries’ collective response to high shipping costs.
When a winery sells wine to a wholesaler (or directly to retailer of some flavor), it’s always at a discount from retail. The assumption baked into that lower price is that the retailer makes up the difference in getting the wine to market (or to someone’s home).
If a winery can sell a wine for $100 in the tasting room, and $65 to a wholesaler, why does the winery expect a consumer to pay $100 + shipping? Wouldn’t there ostensibly be up to $35 available to subsidize the shipping cost? Shouldn’t the winery absorb some, if not all of that, in place of the retailer who would have done so?
It is my (probably) controversial opinion that wineries choose to burden the consumer with the cost of shipping, sometimes at their own peril.
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You’re ignoring volume
That’s one way to look at it. Not a particularly customer-centric POV, especially for club members.
Wineries need to stay in business. Also. You’re talking about $100 wines; is $90 shipping really a burden?
I was using that price to make the mental math easier.
If you want to say $40 wines that might sell for $25 wholesale, that still leaves $15/bottle for “margin” (because they’re still making a profit at $25 or they wouldn’t sell them wholesale at that price). 4 bottles shipping for ~$40 the wineries could charge the customer $20 to ship and eat the other $20.
By your logic, wineries can only sell to customers who are willing to pay for shipping. As the number of people willing to pay out the nose for shipping diminishes, the wineries are going to go out of business either way. I find the ability to pay and the willingness to pay are not tightly correlated — lots of rich people are frugal as hell.
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Try that line on potential investors, partners, lenders, etc.
I’m not writing a business case for investors — we’re talking.
This topic exists on this forum because wine fans don’t want to pay out the nose for shipping and would choose not to buy rather than do so.
Wineries need to figure out how to do what every other industry selling physical goods to consumers have had to figure out. Investors probably understand this better than the wineries.
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Amazon has many warehouses spread throughout the country. People get deliveries next day, sometimes within hours at minimal cost. It’s the state by state controls of alcohol plus shipping weights that are a major problem.
And not to explicate the obvious but consumers love “free” shipping.
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Agree 100%!
I would hope every single winery understands this dynamic. Unfortunately, many do not. There’s also something to be said for DTC sales — given many of the posts I’ve seen on this board over the years, DTC sales often make customers “feel better” — or feel as if the winery is somehow “loyal” to them — as ridiculous as that arguably is; and, when a customer feels that way, they’re more likely to stick around.
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Because it’s not that simple — the blended average is really what matters. They’re not taking a bottle they’d otherwise send to a wholesaler and sending it to me. They’re assuming they’ll sell x% of their wine DTC and y% of their wine wholesale/3 tier … and then price accordingly. Also, there’s typically a cost to acquire and cost to keep club members — advertising, free tastings, gifts, etc. On a per bottle/case basis, selling to wholesale is much less friction.
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Sure, but the customers en masse are a volume buyer (called the DTC channel) and I think this point is overlooked. Whatever the blended price and costs are, the customer’s willingness to pay for shipping has to be factored in.
If you’re selling online to people have tried your wine somewhere other than your tasting room, your CAC is pretty low. You can give some of that back to the customer in the form of reduced-cost shipping.
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There are factors to add. Shipping containers for DTC are not cheap. For those $100/ bottle wines you’re going to be buying most likely higher end styro shippers. $$ then there is tha actual shipping cost. As @Patrick_Taylor stated being in the Midwest the cost to ship from the West Coast to the Midwest is pricy. Add the shipping alcohol surcharge, added shipping insurance which theoretically should cover you from breakage and you’re already pushing close to $75-$80 for a 45lb box.
As @Tom_G_l_a_s_g_o_w mentioned volume regarding selling to wholesalers. But it’s more than that too. Wineries can self distribute in their home state, but outside of that, in every other State (except DC) you must have a wholesaler and then as was also mentioned advertising and a myriad of marketing. Bringing wholesalers to your winery, attending their wine festivals to pour your wine, educational events with the distributor reps, buying trinkets and wine keys… it is endless as are the costs to do business.
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So, Berserker Day!!! Can someone generate a pic of the Toddster with $$ signs in his eyes dressed in a Jesus robe
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If all the club members for a given producer were willing to band together and accept shipment delivery in a single place, this would be in the zip code of an apples to apples comparison.
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