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Tuesday, October 2, 2012

Amazon gets into the wine business

The word is that Amazon will soon be selling wine. This means you can go to their website to download the latest Coldplay, pick up some new hiking shoes, and buy an assorted six pack of Zinfandel!

The not very secret word on the street is that Amazon recently hosted an event in Napa attended by over 100 wineries to pitch the service. They want to be up and running for the holiday season.
Mmm, a cart full of Cabernet!

One question is how will they do this? It appears that it will be a "marketplace" where you go to deal with each winery individually. This is better for Amazon legally (they would not be selling alcohol directly), but not so convenient for the consumer who wants to shop variety. Someone (Amazon, a third-party, or each winery) has to handle the confusing array of state shipping laws. Plus they don't want to ship in hot weather, they'll need return policies for bad wine, etc. It appears the method taken by Amazon will be in basically supplying links to individual winery "stores."  So if you want to buy two bottles each from three different wineries does this mean three separate purchases and three separate shipping charges? It appears so.

The bigger question is how much of an impact will this have on brick-and-mortar wine shops? Like any other retailer it has to do with ease of purchase, price, and selection. Amazon has the easy purchasing part figured out and I expect will have the power to get good prices and selection, including the shipping costs. Large retailers like Costco have had an impact on smaller wine shops. Will a large online retailer have an impact on Costco and all the other walk-in stores?

We'll see how this works.