Will Release Offers ever move to Negotiated Pricing?

[Brian_Tuite]

wholesalers would rebel. They get about 50% of private price to consumers on list. No way the wineries would alienate distribution contracts. (I suppose some ultra hot winery might be different, but they would never haggle with consumers anyway.) The outlet for this sort of thing is Last Bottle or WTSO. You get your discount randomly from a volume reducing tool.

Allocated wines don’t go into distribution unless it’s a “shitty vintage” and the winery does not sell through.

[NickRut]

Not sure what the price elasticity is on wine but that’d dictate things a bit. I’d imagine it could be doable once the dust of the release settles. If you don’t sell on first release for say 3 months and have more than projected inventory it’d be a diff way of doing it where it’d be more of a haggle. For the initial release I think it’d be tough to make it make financial sense

[Brian_Tuite]

Not sure what the price elasticity is on wine but that’d dictate things a bit. I’d imagine it could be doable once the dust of the release settles. If you don’t sell on first release for say 3 months and have more than projected inventory it’d be a diff way of doing it where it’d be more of a haggle. For the initial release I think it’d be tough to make it make financial sense

If you were the guy who purchased on release and then saw the winery allowing someone to lowball the price a month later you:

1 - Wouldn’t like how you got used
2 - Would want the same price and demand a refund
3 - Would never buy from that winery again because of the “principle” of the thing.
4 - Would start a post on Wineberserkers bashing the winery for underhanded deeds and overcharging their loyal customers.
5 - Enter complaint here ________________________________
6 - All the above

Face it, if a winery did that you’ld just wait for the second wave where you could negotiate down and never buy on the first release. The winery would lose money and not make wine again.

*Edit typos

[NickRut]

Not sure what the price elasticity is on wine but that’d dictate things a bit. I’d imagine it could be doable once the dust of the release settles. If you don’t sell on first release for say 3 months and have more than projected inventory it’d be a diff way of doing it where it’d be more of a haggle. For the initial release I think it’d be tough to make it make financial sense

If you were the guy who purchased on release and then saw the winery allowing someone to lowball the price a month later you:

1 - Wouldn’t like how you got used
2 - Would want the same price and demand a refund
3 - Would never buy from that winery again because of the “principle” of the thing.
4 - Would start a post on Wineberserkers bashing the winery for underhanded deeds and overcharging their loyal customers.
5 - Enter complaint here ________________________________
6 - All the above

If it happened every year I’d be upset. If not, I’d understand I paid a little extra to guarantee my allocation. Same thing to me as mailing list wines that sometimes can later be found at a discount from retailers.

[Brian_Tuite]

Not sure what the price elasticity is on wine but that’d dictate things a bit. I’d imagine it could be doable once the dust of the release settles. If you don’t sell on first release for say 3 months and have more than projected inventory it’d be a diff way of doing it where it’d be more of a haggle. For the initial release I think it’d be tough to make it make financial sense

If you were the guy who purchased on release and then saw the winery allowing someone to lowball the price a month later you:

1 - Wouldn’t like how you got used
2 - Would want the same price and demand a refund
3 - Would never buy from that winery again because of the “principle” of the thing.
4 - Would start a post on Wineberserkers bashing the winery for underhanded deeds and overcharging their loyal customers.
5 - Enter complaint here ________________________________
6 - All the above

If it happened every year I’d be upset. If not, I’d understand I paid a little extra to guarantee my allocation. Same thing to me as mailing list wines that sometimes can later be found at a discount from retailers.

Thin ice pal, thin ice. I think I can hear the laughter from Napa Valley coming over the Mayacamas right now into my backyard.

[NickRut]

Thin ice pal, thin ice. I think I can hear the laughter from Napa Valley coming over the Mayacamas right now into my backyard.

So what happens when a winery sells less product than expected? They sit on product forever or they cut their costs to get rid of bottles? Typically they cut their costs to non direct distribution channels and not directly to consumers from what I’ve seen. This would just allow a different approach. Obviously it’s different for companies that sell out immediately but there are plenty of others that don’t. Clearly I could be missing something but hey, that happens.

[Randy_Bowman]

If you were the guy who purchased on release and then saw the winery allowing someone to lowball the price a month later you:

1 - Wouldn’t like how you got used
2 - Would want the same price and demand a refund
3 - Would never buy from that winery again because of the “principle” of the thing.
4 - Would start a post on Wineberserkers bashing the winery for underhanded deeds and overcharging their loyal customers.
5 - Enter complaint here ________________________________
6 - All the above

If it happened every year I’d be upset. If not, I’d understand I paid a little extra to guarantee my allocation. Same thing to me as mailing list wines that sometimes can later be found at a discount from retailers.

Thin ice pal, thin ice. I think I can hear the laughter from Napa Valley coming over the Mayacamas right now into my backyard.

This.

[blarmston]

Substituting wine for a stock for a moment to try and convey the conceptual point here. Does one go out and complain that the price they paid for say, Apple, is now higher than the current share price? Sure maybe they do maybe they don’t. But in a free market, sometimes you get a stock at a discount and sometimes you overpay and bid higher at a premium. It is what it is. Now not everyone is required to play that game of course. If you don’t want to take your chances with overpaying for a stock, then you sit on your chips. If you are willing to potentially pay a bit more knowing that there is a likelihood that you could pay less or get a discount, that’s your choice.

Point is, there is a risk. You can choose to expose yourself to that risk or not.

You can as a winery, choose to engage in that system where you ‘may’ receive less total revenue for your goods, or you could end up getting more.

You can, as a consumer, potentially pay more to secure a coveted bottle or allocation, or you can choose to propose a price that you are willing to pay. If your bid is filled, great, if not, you’re out.

Supply and Demand. Free Market. It’s a real thing folks. It hasn’t truly come to wine yet, but never say never. And for those who immediately dismiss it, it’s okay, no one likes change…

“The only constant is change”- Heraclitus

[J_Rock]

This just seems incredibly inefficient (especially for the winery) and I can’t really see it making any sense, except mayyybe with respect to consumers who are buying a large amount (at least several cases) of wine.

[Steve_Anderson]

Brian,

Good point. Not sure we will see negotiatated pricing, but I think this is why we occasionally see multiple bottles of recent releases at auctions such as Wine Bid, Spectrum or Heritage. Wineries are trying to liquidate excess inventories at the best price they can get.

Cheers,

Steve

[blarmston]

A couple items to address, and then I’m off to catch some ‘s.

What if there was technology readily available that was efficient at solving this dilemma? That which was accessible to both the winery and the consumer? I’m sure both parties would be amenable to access to that.

And for sure wineries are trying to unload inventory at the best possible pricing to them. Wouldn’t they prefer that their unsold bottles go to loyal buyers instead of dumping them out to discount websites? Assuming the ultimate sale price meets their internal metrics for acceptable profit margin?

I’m just a guy with questions. And it’s nice to see some on this board willing to ponder on the ‘what ifs’ and ‘why nots’…

[Matt_Allen]

I would drop any winery that did a Dutch Auction

[Scott_Brunson]

Not sure what the price elasticity is on wine but that’d dictate things a bit. I’d imagine it could be doable once the dust of the release settles. If you don’t sell on first release for say 3 months and have more than projected inventory it’d be a diff way of doing it where it’d be more of a haggle. For the initial release I think it’d be tough to make it make financial sense

If you were the guy who purchased on release and then saw the winery allowing someone to lowball the price a month later you:

1 - Wouldn’t like how you got used
2 - Would want the same price and demand a refund
3 - Would never buy from that winery again because of the “principle” of the thing.
4 - Would start a post on Wineberserkers bashing the winery for underhanded deeds and overcharging their loyal customers.
5 - Enter complaint here ________________________________
6 - All the above

Face it, if a winery dud that you’ld just wait fir the second wave where you could negotiate diwn and never buy on the first release. The winery would lose money and not make wine again.

Maybe notreal Alan will start a poll.

[Brian_Tuite]

A couple items to address, and then I’m off to catch some ‘s.

What if there was technology readily available that was efficient at solving this dilemma? That which was accessible to both the winery and the consumer? I’m sure both parties would be amenable to access to that.

And for sure wineries are trying to unload inventory at the best possible pricing to them. Wouldn’t they prefer that their unsold bottles go to loyal buyers instead of dumping them out to discount websites? Assuming the ultimate sale price meets their internal metrics for acceptable profit margin?

I’m just a guy with questions. And it’s nice to see some on this board willing to ponder on the ‘what ifs’ and ‘why nots’…

Speculative investments vs consumer goods/consumables. A bit of a stretch IMO but I get your point.

From my experience, wineries that allocate DTC don’t use LastBottle, WineBid, WTSO to move unsold wine. The move lowers the percieved value of the brand. “Did you see Xxxx Cellars dumped all their Xxxxxx on LastBottle for 60% off?” Now that’s great advertising for next year.

They sell to local wine stores/retailers who will be happy take something they normally cannot get in qty. 750 Wines, ACME, BottleBarn and the like cater to that clientele. If a wine continually does not sell through most guys will lower production of that particular bottling in coming vintages to match demand. Taking a big hit to margins year after year is not a good business model.

[Bdklein]

I would drop any winery that did a Dutch Auction

I would drop any wine that resembled a Dutch Oven.

[blarmston]

I would drop any winery that did a Dutch Auction

Care to elaborate on why?

[Alan_Eden]

Wouldnt this pricing model end up with nobody paying full price ? its like All clad, they have a sale every six months or so i just wait for the sale and save 60%. If wineries did this they would go out of business.

[DougS]

No. For so many reasons.

[Alan_Eden]

Also your assuming excess stock, what if wine gets 100 pts. you Ok with 50% increase, seems only fair

[blarmston]

Wouldnt this pricing model end up with nobody paying full price ? its like All clad, they have a sale every six months or so i just wait for the sale and save 60%. If wineries did this they would go out of business.

The error in that statement is that All Clad can simply ramp up production if they were selling out at full or close to full price. They have potentially an ability to produce as much product as they want. With wine, there are capacity issues (access to grapes, access to custom crush facilities, access to labor, etc) and cost factors to consider. It hinders their ability to increase supply, thus making their product a finite one.