I’ve got that shipping feeling
As the temperatures cool, it’s time to think about shipping wine around the country again. And this year is the first year after the Supreme Court’s decision that liberalized shipping, which makes this fall all the more exciting.
But one thorn in the side of the newly liberated consumer is the cost of shipping. I’m on the mailing list of one cult winery who wanted to charge $68 to ship a case of wine from California to me in New York. While $5.67 per bottle shipping may not seem like a lot if the wine is $100 a bottle, it does raise the bar pretty high for what kind of wine is going to be crisscrossing the country this fall.
How could $5.67 a bottle reasonable? Since many wineries don’t charge sales tax (although this varies by winery and by state) the shipping cost could be thought of as simply a sales tax. Using a rate of 9% sales tax, paying $5.67 per bottle shipping would mean that you need to buy a $63 bottle of wine ($756 a case) before you are coming out ahead. And this is with a case price on shipping–half cases or single bottles are decidedly less economical running well into the teens per bottle for shipping.
Does it need to be this way? Not always. Yes, fuel prices are rising, which makes transportation more expensive. But wineries have two options to lower costs when it comes to shipping.
First, they can join a trade group such as the Wine Institute or the Family Winemakers of California (check out their good new “buying wine” section to tell at a glance what the rules are for your state). Both groups have negotiated with shippers to offer reduced rates to their members.
Or they could eat some of the shipping costs. After all the winery’s profits are exponentially greater with direct shipping. In a hypothetical example, a winery sells a case of wine to a distributor for $100, making a $30 profit. The distributor then sells it to the retailer for $150, who then sells it to the consumer for $225. So when the winery charges $225 a case to sell directly to the consumer, they are making $155 per case instead of $30. With a $500 case they could be making over $300 profit. The wineries could use some of that added profit to get the wine to the consumer more cheaply by, say, offering shipping for $30/case or capping it at 9%.
Unfortunately, the wineries will probably experience unprecedented demand this fall, meaning they can charge what they want and making everything I’ve said in this post completely moot. If direct shipping is to go beyond cult wines and into the mainstream though, the shipping costs will have to come down.
On September 28th, 2005 at 11:33 am ,Dr. Vino wrote:
I just got an email that Bonny Doon is offering FREE wine shipping til 9/30/05. I wouldn’t normally post such info but in light of my rant on shipping costs, I thought it was only fair to highlight somebody who is making a effort to keep them down.
http://www.bonnydoonvineyard.com
On October 9th, 2005 at 2:45 pm ,Jack wrote:
Perhaps your Cult wine is in a heavy bottle and wooden-boxed? Tack on a box fee and a handling charge, and they can justify that shipping price.
You’re totally right, they could easily give you free shipping, etc., as they are making a lot of money on your case, compared to selling that same case wholesale. A couple of others that I seem to remember that don’t charge for shipping include Loring Wine Company and A.P. Vin.
Personally, I think it’s very important that the person buying direct has a totally positive experience. Feeling ripped off on shipping charges is something that lingers in the back of your mind; you might even the like the wine less next time you have it.
On October 11th, 2005 at 2:48 pm ,Sean wrote:
If they’re a small vinyard, and do most of their sales on-site, they may be trying to make up for breakage and such.
On October 14th, 2005 at 4:59 pm ,Andy wrote:
Please correct me if I am not reading this correctly, you would rather see wineries build their shipping cost into the price of a case?
I think it wouldn’t be a bad idea, but I would expect wineries would just adjust the price accordingly to keep up their margins.
Another question I have is how concerned are you with the quality of the shipping? Is it concerning that during shipments temperatures can go outside the advised range and cause damage to your wine?
On September 11th, 2006 at 10:42 am ,Anonymous wrote:
Jim Said
I don’t know if anyone has seen the latest case wine shipping packaging offered by Molded Fiber Technologies, a division of UFP Technologies. http://www.ufpt.com/moldedfiber.asp
The shippers are made from 100% recycled newspaper(Environmentally Friendly) and have passed all the UPS and FedEx drop testing protocol. Anyone spending more the $10 per case should look into this company. They serve wineries that buy in bulk, and also serve smaller companies that can purchase kits, which include the molded fiber trays, exterior cartons, and colorful tissue paper.
Give them a try!
On September 28th, 2006 at 11:03 pm ,manhattan wine wrote:
I couldn’t help but notice the complaints about shipping. I started a new wine storage and shipping company in New Jersey called Manhattan Wine Company (mwcwine.com) to deal with this and other problems, and we are in the process of consolidating shipments from west coast wineries to the New York Metro area to save consumers money on their shipping. $8 a bottle is too much to pay, I agree. If anybody wants more information, please feel free to call me at 917 701 5551. Thanks,
James Polsky
Director
Manhattan Wine Company