Shipping prices may be the thing that finally convinces me to drop mailing lists

[Tom_G_l_a_s_g_o_w]

Grape to grape??

[Tom_G_l_a_s_g_o_w]

$30 to ship a single piece of paper 300 miles overnight, just saying.

[Nola_Palomar]

I just shipped a 44lb box to CA that wasn’t wine. My shipping cost just for the label and my own boxes not a styro shipper was greater than $65 then add in my packing materials, price of the bottle protector, labor…

[Patrick_Taylor]

@Tom_G_l_a_s_g_o_w

How much was the case?

That’s a fair point. The wines were far less than $100/bottle, so it was much more noticeable.

[AndrewH]

@HoosJustinG

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.

Of course there’s a higher (non-shipping) cost to DTC vs wholesalers. But unless that difference eats up the entirety of the difference between wholesale and retail then the question remains.

[john_enea]

I ran into the shipping price disaster with a recent purchase inquiry. while its not wine, it still fits the increase example. I’m an old school photographer who still shoots film and does all my own development at home… its time for me to reload my E-6 chems, slide film. to get the real high end stuff there is now only 1 retailer who sells and is willing to ship. when I clicked on the estimate shipping costs, my eyes popped out of my head (and I went back to view shipping costs from my old orders to compare the shipping charges). turns out that now all the chems are coded hazmat shipping. so to ship a 2 liter bottle of color developer, which costs $65, costs $45. to ship the regular 1st developer, which costs $48, shippoing is $45. And to ship fixer, which costs $28 in a 3 liter bottle, cost is now $95!. 4 years ago, when I last bought the shipping on the same bottle was $18. since it is not possible to buy local and pick up and the only retailer who sells the chems is in New Jersey, shipping to CA is forcing me to have the real thought of giving up my film shooting. my entire order that I need place has the chems cost at $389 with $550 in shipping.

Never thought it would cost me more the ship the chems then the cost to buy them. I know liquids are expensive to ship, but when will this end?

john

[larry_schaffer]

Easy solution for all wineries - push bottle prices above $100 and then shipping seems ‘reasonable’ . . .

These costs really do suck, and if you’re a small producer like me with ‘reasonable’ bottle prices, it seems ‘high’, especially with smaller quantity purchases. But seriously - even though these costs may seem high, I am eating some of the actual costs . . .

Cheers

[Al_Osterheld]

I think almost every small winery with DTC shipments across the country “subsidizes” some of the shipping costs, and more so for the customers that are farther away than closer.

-Al

[Marcus_Goodfellow]

I’m sorry, but collectively dtc purchases take a much larger amount of time and work.

In the shipment alone, my distributors pick the wine up at our storage. The wines are picked up in their original cases with no repackaging. Consolidation is generally in 7 case increments up to a pallet. I literally just forward their purchase order over to the warehouse and they pick up the wine there.

By contrast each case we ship direct is generally a range of wines and packed by us into the shippers we put together. It’s a lot of hours. Managing the spreadsheet for shipping and getting everyone’s order packed correctly, monitoring weather, and keeping up with address changes and credit card details is a big part of what Megan does for several weeks after each release.

We’re very happy to have the dtc volume that we do, so this post isn’t a complaint, but rather that there is a lot that goes into it that simply isn’t part of the distributor relationship.

[Jim_Anderson]

@Jessyca_Frederick

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.

Your FOB calculation isn’t correct. You’re doing it as if the winery is the distributor. $45retail wines leave the winery at around $20 FOB. Spread that over the course of a pallet and that’s $3,360 the winery doesn’t make.

[Sean_Devaney]

Yep and I don’t mind subsidizing the shipping costs. I am lucky I live in the SF Bay Area and rarely buy wines from out of state but I would rather support CA wineries with paying slightly a higher percentage of shipping costs than shipping to the East coast so the wineries can supply their wines to enthusiasts in other states. Sorry Hawaii and Alaska

[Brian_G_r_a_f_s_t_r_o_m]

Let’s just cut right to the relevant question (and I’d be interested in hearing this answer from anybody ITB who is willing to answer): ALL things considered, do you make more money per bottle selling DTC or selling through distribution channel(s)? By “ALL things considered,” I mean materials, time, shipping expenses, etc. etc. etc…

I’ve found the back-and-forth on this topic to be very interesting, with excellent points being made on all sides of the issue.

[Brian_G_r_a_f_s_t_r_o_m]

Subsidization of the type you’re talking about isn’t necessary for wineries to be able to ship to the East Coast.

Quite frankly, access to commerce is one of the advantages to living in a major metropolitan city/area — it’s one of many reasons these places tend to be more expensive to live. Why should folks who live in these areas have to subsidize shipping expenses for folks who decided to live in places with less-economical access to commerce?

[Brian_Be]

Not ITB, but I assume this is not a straightforward answer as building a loyal customer base isn’t easy to value. For example, how many different Pinot’s could PGC make with no DTC route and it all going to distribution? I suppose all these smaller wineriers could distribute to the big Portland retailers instead and let them handle the shipping. But I rarely see any of the OR wines I want to purchase at retail in Seattle.

[Cris_Whetstone]

I think Jessyca made an important point that was absent from the discussion. Most people here would probably like better understanding of that part of the trade.

The point I would make in reference to that is that many of the producers we purchase from as Berserkers likely do not send a large portion of their product to retail. At least in comparison to many other producers we would see on the shelves frequently. I would think that DTC margin becomes more important to them for a variety of reasons.

[Tom_G_l_a_s_g_o_w]

Price discrimination allows higher overall profit and no it’s not illegal per se.

[Robert_M_yers]

Every time I buy a postage stamp I shake my fist at those farmers in the plains of North Dakota. I’m tired of pulling their mail freight.

[Brian_G_r_a_f_s_t_r_o_m]

Price discrimination? Huh? I’m just talking about shipping expense.

IMO, the most fair way to deal with shipping expenses is to have each buyer pay their own actual shipping expense. But, whatever. At the end of the day, the customer is going to look at the all-in price and ask themselves, “Am I willing to pay that price for this product?” It really is that simple.

[MICHAEL_C_R_O_M_W_E_L_L]

Could not agree more with the last sentence, bottom line is the bottom line.

[Al_Osterheld]

If the bottom line works out to $45 per bottle and free shipping or $40 per bottle and $5 shipping, many consumers will not consider the bottom line to be the same.

It’s been shown in numerous threads that many customers dislike/resent paying for shipping even to the extent of suspecting it’s a profit center. The worst thing a winery could do for sales would be to turn shipping into a profit center, far easier to convince them the wine is worth a bit more and help cover the shipping.

-Al