Amazon in third online wine attempt

1st October, 2012 by Lucy Shaw

Seattle web giant Amazon.com is plotting its third attempt to sell wine, this time through an online marketplace for wine sales directly to consumers.

The online retail giant hosted a workshop in Napa Valley last week for members of the Napa Valley Vintners association.

At the event, attended by over 100 California wineries, Amazon announced that its Wine Marketplace would begin in the coming weeks.

Amazon executive Derrick Peters said the retailer plans to charge wineries a 15% commission of the sale price, as well as a monthly fee of around US$40.

Numerous Napa, Sonoma and Washington wineries have been contacted, and Amazon has asked participants to sign a non-disclosure agreement.

Amazon’s Wine Marketplace is the retailer’s third attempt to sell wine online.

In 2000, it invested US$30 million in a failed venture with Wineshopper.com, which failed to survive the dot-com bust.

Then in 2009, Amazon pulled out of an effort to sell and ship wine after its partner, New Vine Logistics, suspended operations amid financial troubles.

Amazon’s latest venture however, will avoid the cost and difficulty of shipping fragile wine bottles by passing the responsibility on to the vineyards involved.

US online wine sales are challenging due to a plethora of state-by-state rules that limit which companies can sell alcoholic drinks.

As a result, online wine sales currently only account for less than 1% of total wine sales in the United States.

Debi Cali, general manager for Napa-based Baldacci Family Vineyards, said Amazon’s online marketplace could be confusing for customers.

“We aren’t licensed to sell in Massachusetts, for example, so someone interested in our wine wouldn’t be able to get it shipped there, but in North Dakota they could get it,” she told the Wall Street Journal.

Amazon’s Wine Marketplace will provide a portal for wineries, putting their wines in front of potential customers, while the wineries will handle sales and shipping.

“They are approaching this as a payment gateway provider,” one Walla Walla vintner told the Wine Spectator.

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