Wineries Counting on the Discounters

Posted by | Posted in Out of the Glass | Posted on 02-02-2011

Uploaded to flickr by Steve Snodgrass

Discount online wine retailers are popping up with remarkable frequency. CinderellaWine and Wines ‘Til Sold Out were the first two to capture my attention, but since then, I’ve turned to sites like UncorkDeals.com from Wine Chateau and invino (formerly known as Winery Insider).

Each of these sites purports to offer significant discounts on quality wine. Some are, of course, better than others, but overall, I’ve been able to pick up some quality wines — often with free shipping — at prices far below retail. (Now whether I actually needed those wines is another matter entirely.)

Recently, I received an email from Lot18, another online discounter, touting wine from one of my favorite producers, Robert Keenan Winery. I visited Keenan on my first trip to Napa in 2007 and credit the producer with catalyzing my interest in wine. Keenan’s was the first wine club I ever joined, and I’ve been receiving four bottles every six months from them for over three years now. I’ve been impressed by every bottle of Keenan that I’ve ever uncorked. And the vineyard, on Spring Mountain, is absolutely gorgeous.

As a member of the Keenan wine club, I’m entitled to a 20-percent discount on any wines I purchase. Much to my surprise, Lot18 beat that discount on its Keenan offering — the 2006 Cabernet — with a 33-percent discount. I rounded up a few of the fellow Terroirists to go in on a half-case to take advantage of free shipping and am now the proud owner of three bottles of this Cabernet.

Lot18 delivered again a few weeks later, with a deal on two different 2007 Novy syrahs (the Santa Lucia Highlands and Nord Ridge bottlings). But this time, the producer attempted to beat the e-tailer to the punch by offering the same wines a day earlier at a lower price. One of the terroirists and I attempted to take Novy up on its offer to undersell Lot18 (whom it didn’t identify as the reseller waiting in the wings) by two dollars, but Novy sold out of its inventory in less than a day. Eventually, we picked up a few bottles of the same wines at $16, as opposed to $14. But with free shipping from the discounter, we may have come out ahead.

Discount retailers are likely the last buyers producers want to see. Wineries’ profit margins plunge if they’re forced to unload wine in bulk to discounters. But consumers obviously benefit from the cut-rate prices.

After I made my Keenan purchase, I wondered if I would’ve benefited by playing the discounter and the winery off one another. Keenan most certainly makes more money by selling direct. So could I have wrangled the same deal through the winery that the discounter was offering — particularly as a member of the wine club? Maybe an extra bottle for sending my business — and the higher margins on my purchase — their way? Novy’s counter-sale leads me to believe that I could have.

I contacted the Keenan winery for a comment. Laura March, who manages the tasting room and hospitality side of the winery, said that they’d absolutely honor the Lot18 deal themselves. No word, however, on whether I could’ve negotiated an even lower price that would’ve benefited their profit margin and my bottom line by cutting the middleman out of the deal.

What do you think? Do discounters represent not just a good deal — but a negotiating opportunity?

Comments (3)

  1. […] This post was mentioned on Twitter by nathan treanor and David White, David White. David White said: New post! Wineries Counting on the Discounters (http://bit.ly/gUpPfN). Via http://Terroirist.com. A great post from @robbyschrum […]

  2. For me, the key criteria that tips the scales in favor of the discount retailer vs. the winery is the quantity of bottles I’m looking to purchase. I live in the Midwest and shipping figures mightily in the discussion. Discounters will ship significantly smaller quantities of wine at little or no cost, while winery shipping charges for anything less than a case are so high that I wonder if they represent a profit center for the winery! Case in point: I bought Harvest Moon Zin from the Wine Spies for $22/btl w free shipping for 6 or more last summer. I’ve bought the same wine since I’ve joined HMs wine club for $22.50-$24.00 but my last 4 bottle shipment totaled $32 in shipping charges! WineWoot.com regularly offers 50% discounts on 2-4 bottle lots with $5 shipping. WineExpress.com features $.99 shipping per bottle. The bottom line is I can’t seem to get those kind of shipping discounts without buying a case or two. To answer your question about whether this represents a negotiating opportunity with the wineries, I say absolutely! But, beware of the shipping charges. They can turn a great wine deal into retail+ pricing in a hurry.

  3. […] I covered the rise of online wine discounters — and my experiences buying some of my favorite wines […]