WineBid Announces Record Revenue and Growth for 2020

[Marc_Hauser]

1%ers complaining about a business making a profit. That’s rich!

I know, right? It’s so unfair that this business that exists to help me enjoy my hobby so much more dares to also charge me a fee for that service!

[John_Glas]

Never spent a nickel there.

[Arv_R]

Last, if they weren’t doing a great job, competition would spring up and quickly. Barrier to entry is high, they are known commodity, again congrats.

Why do we think this is an industry with a deep moat protecting it? They have a slick web/mobile interface that is run in a different location than their fulfillment / intake / shipping center. Of course there are some specialist logistics, and human talent involved in describing bottles accurately, but I would think a typical internet fine wine merchant would have some of those talents already. Note how K&L grew their auction business on the back of a strong fine wine retail business, although they have chosen a somewhat different niche than WineBid.

B21 has a crummy website - given the scale of their business - but seems like an enterprise that could hire some developers, and fix their website, and when done with that, add on an auction module. Maybe it would have to be done by an ambitious scion, but they seem to have all the basics ex the slick platform software. The real operational excellence - managing some 40-50000 SKU’s of value - is the truly hard part that can’t be built quickly.

I’m not being flippant, just don’t think platform / marketplaces / croupier style businesses are as glorious as people perceive, if they aren’t built on something that is tough to do.

I seem to remember Russ mentioning at one point they had some kind of (AI assisted?) system for quickly inventorying, photographing, tagging incoming consignments. Perhaps that’s truly a unique value add and allows them to accept sub $75 bottles, or whatever the breakpoint is, that other auction houses can’t expend wine knowledgeable labor on when values get below that.

[Eric_LeVine]

croupier style businesses

“croupier: the person in charge of a gaming table, gathering in and paying out money or tokens.”

Sorry, but that word rubs me the wrong way. You know there is a bit more to it than that. Trust, integrity, track record. WineBid has been doing a really, really good job for more than 20 years. They really do deserve more credit for that.

DISCLOSURE: I partnered with WineBid from 2005-10 when I licensed auction data from them. Russ and I have spoken numerous times and will hopefully find ways to partner again in the future. As a customer, CellarTracker tells me that I have bought 458 bottles there over the years with mostly very positive experiences.

[Alex_Valdes]

I don’t know how the full model works but assuming they only get the 17% fee for all their operations that comes out to about $5.7M in gross income right? Then operating costs out of that? Doesn’t that seem low for how big the ops are?

I don’t think it is clear in the article, but I would think WineBid’s revenue does not include the value of the item sold - that is not income to them, but rather to the seller. WineBid’s revenue - the $33m - would include the fees from sales and any other income earned (maybe a cut from the Winery items?).

Based on the auction tables, the $33M is value of wines sold (see 2019 table for comparison)

In 2020, on the back of a banner year, Acker did $15M in “online only” auctions (total was $122M including their “live” auctions)

https://img.winespectator.com/wso/bolt/2020-01/2019auctiontotals_web.jpg

[Arv_R]

croupier style businesses

“croupier: the person in charge of a gaming table, gathering in and paying out money or tokens.”

Sorry, but that word rubs me the wrong way. You know there is a bit more to it than that. Trust, integrity, track record. WineBid has been doing a really, really good job for more than 20 years. They really do deserve more credit for that.

DISCLOSURE: I partnered with WineBid from 2005-10 when I licensed auction data from them. Russ and I have spoken numerous times and will hopefully find ways to partner again in the future. As a customer, CellarTracker tells me that I have bought 458 bottles there over the years with mostly very positive experiences.

It is the concept that exchanges/platforms/brokers collect a ‘rake’ off the total action, and as prices go up, their costs should not go up the same way. These are business models that are much more resilient to inflationary environments. Like Visa or Mastercard, everything that goes through their pipes pays a toll.

Feel free to mentally switch in a different word if you find croupier to be offensive/inaccurate!

[Victor_Hong]

1%ers complaining about a business making a profit. That’s rich!

I know, right? It’s so unfair that this business that exists to help me enjoy my hobby so much more dares to also charge me a fee for that service!

Unless a cheaper, better alternative, I am OK, although being a complaining One-Percenter would be nice.