Amazon Is About To Start Selling Wine… Again!

Meet your new wine merchant: amazon.com

A recent report suggests that in a matter of weeks Amazon will launch a wine marketplace. I bet you didn’t see that one coming, or perhaps you did. The U.S. wine industry rakes anywhere between 18 to 22 billion dollars in annual sales revenues, so it just makes sense for Amazon to want a piece of that pie. Costco, the seventh largest retailer in the world, became the largest retailer of wine in the world as of October 2007. Will the two giants play nice together? Will competition be more severe? And more importantly, will it affect wine prices? Well, strap yourself in because this is bound to be a ferocious ride.

Amazon hosted a workshop in Napa Valley to promote their latest endeavor. About 100 vineyards from the Napa Valley Vintners Association attended the event, nondisclosure agreements oblige. It is still too early to say which wineries will sign up for the program.

This is Amazon’s second attempt in selling wine directly to consumers; but this time, the rules are slightly different. Wineries will be responsible for shipping the wine and observing state-by-state rules and logistics in regards to selling alcoholic beverages on the internet. Amazon will charge wineries a 15% commission of the sale price, as well as a monthly fee of about $40.

Amazon is a well established online retail store. Many people shop there. Chances are, if you have an internet connection, you also have an amazon.com account. With an obvious convenience factor, you can buy from a vast variety of products: from A to Z as the logo clearly illustrates. The goal is to apply this successful business model to wine and make it more accessible to those devoted online shoppers. This actually might have the potential to help the wine industry.

This is a logical strategic move for Jeff Bezos (Founder and CEO of Amazon.com, Inc.) and his company, though I bet they had to request one heck of a liquor license! They are clearly in it for the money and only time will tell if this new plan will pay off. However, there’s one thing that big retail stores (online and b&m) will never have: the passion and the knowledge of your local wine merchant. There’s always that special bond between you and the store owner that will never exist with those retail giants. The small business owner is selling much more than just a bottle of wine.

It remains to be seen if and when any of this activity will have an effect on wine prices. Or if this will affect us, the wine drinkers in a positive or negative way. Only time will tell how this will play out and if this will have any impact on your local wine store.

I’ll update this post with any new information I might get. In the meantime, feel free to add your own thoughts on the matter.

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