Fine wine profile: Bid for WineBy Gabriel Stone
Bid for Wine, the UK’s first exclusively online fine wine auctioneer, offers a wide and interesting selection of wines, while undercutting many of the traditional auction houses. Gabriel Savage meets the founder and managing director Lionel Nierop.
Some ideas chime so well with the times that it’s easy to lose sight of the entrepreneurial boldness and hard graft involved in breaking with convention.
Bid for Wine, the UK’s first exclusively online fine wine auctioneer, is busy carving itself a useful niche as an alternative to the traditional “bricks and mortar” auction and broker powerhouses.
Set up in October 2008, the business is fronted by managing director Lionel Nierop, former member of the Cambridge University blind tasting team and ex-management consultant.
However, the idea and financial backing which led to the creation of Bid for Wine can be credited in no small part to Tom Cannavan’s web forum, www.wine-pages.com .
It was here that Nierop connected with Spenser Hilliard, a London barrister, wine lover and – even more helpfully – licensing specialist.
Together the pair saw an opportunity to combine their expertise and energy to forge a new, improved channel for fine wine trading.
On the inspiration behind the Bid for Wine business model, Nierop explains: “We were frustrated with normal auction houses; the amount they charge you to buy seems counterintuitive and there’s the slowness too.” The quest to resolve these issues resulted in a venture which marries the lofty world of fine wine with the accessibility and simplicity of eBay.
Sellers can upload a photograph and description of their lot, whether single bottle or several cases, with or without a reserve price. Registration is free, but the site (www.bidforwine.co.uk ) currently charges a cost-covering £1.75 initial listing fee and then a further £1.75 per lot, which is applied only if it sells.
Commission rates range from 5.5-14%, undercutting the big auction houses, who tend to take a cut of at least 15%. The turnaround times are similarly attractive: vendors can upload lots straight away and the usual auction period is seven days.
“We aim to get stuff sold and the client paid within 28 days from first contact,” notes Nierop, observing that his set-up offers “an easy way to get rid of odd bottles or rationalise cellars”. While larger auction houses may be reluctant to put unfashionable or smaller lots up for sale, Bid for Wine has no such qualms.
This also makes for interesting browsing, something with which eBay addicts will be very familiar.
As with many other online trading portals, users provide feedback on each other, which keeps the less honest or, more likely, plain lazy vendors in check.
Photographs are recommended so that potential buyers can verify identity and condition for themselves and Nierop emphasises his own additional diligence in this respect. Among other security guarantees, valid card details have to be provided before lots can be put up for sale and the user’s identity is checked against a range of databases.
It’s not just the auction houses that Bid for Wine is keen to compete with, but brokers too. Nierop points out: “Brokers probably have their own stock to sell. Are they going to push your three cases as hard as their 20 cases? We don’t really have that conflict.”
The company offers these wines for sale via its broking list, which sets out a price for immediate purchase and then leaves interested parties to negotiate as desired.
In contrast to many auction houses, Bid for Wine does not need to be in physical possession of the wine. In the case of removing wine from or moving it between bonded warehouses, this reduces the VAT, duty and additional transport costs usually involved.
Where neither buyer not seller has the licence required to trade alcoholic beverages in the UK, Bid for Wine enables its customers to circumvent this problem by consigning the wine to its bonded warehouse partner, EHD London.
From a buyer’s perspective, Bid for Wine also presents a strong sale pitch. First and foremost, there is no premium on purchases, whereas most auction houses will take a double-digit percentage in addition to the commission they have already extracted from the seller.
Then of course, there’s the ease of monitoring the whole auction process from your desk or iPhone. On top of regular website updates, blog and Twitter feeds, users can also sign up for daily emails of the latest hot lots. While the traditional auction houses have indeed evolved their businesses to channel the power of the web, Nierop argues: “It’s a change of business model for them, but we’ve always been that way.”
Added to this is a conscious decision to keep the business trim, with minimum overheads, in order to maintain the cost advantages at the core of its proposition.
The growing reputation of Bid for Wine is marked by its partnership with The Wine Society, for whose members the company manages a valuation and auction service.
Although The Wine Society does not allow members to purchase wine with the specific intention to sell it on, those with a surplus are encouraged to contact Bid for Wine directly. The arrangement also conveniently allows for wine stored in The Society’s Members’ Reserves to remain there until after the auction.
In the short time it has been trading, Bid for Wine has amassed 2,000 regular users through organic growth. This is likely to increase dramatically as the company launches a valuable arm into Singapore, raising its profile among the thirsty big spenders in the Far East.
Such an important extension so early in the company’s lifespan was catalysed by Bid for Wine’s latest partner, Desmond Foo. An existing client already, the plan is for Foo to manage the Singapore side in close coordination with its UK parent arm, from where the majority of wine offered for sale is expected to originate.
Plans are currently “in the final stages”, with a few tweaks being made on the selling side, but if all goes to plan the venture will bring in a profitable bank of new buyers.
For the moment, the core stock passing through Bid for Wine’s trading floor is a reflection of the type of wines most commonly associated with the auction environment. Nierop estimates that Bordeaux accounts for 70% of the wine sold, while the New World makes up around 10-20%.
However, Nierop ventures: “I hope this will change. People are used to dealing with traditional auction houses, so it’s a question of turning the juggernaut around.” You get the feeling that if anyone is going to shake the dust from the conventional fine wine exchange apparatus and turn it into a well-oiled 21st century machine, this team is the one to do it.
A pick of recent sales:
• 12 bottles of Château Grand Puy Lacoste 1990 – £1,265
• Two bottles of Quinta do Noval Nacional 1958 – £971
• Three bottles of Hill of Grace 2003 – £910 (in bond)
• One bottle of Dom Pérignon 1985 – £122
• One bottle of Château Palmer 1961 (Sichel Bottling) – £921
… and at the other end of the spectrum:
“a load of bin-ended 2004 Aussie Shiraz at £69 a case”
Gabriel Savage, 18.02.2010