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Good deals go fast on wine websites

Wineries, importers and wholesalers are embracing direct-sale sites that can make inventories vanish in a matter of hours.

July 08, 2009|Patrick Comiskey

New Jersey wine retailer Joe Arking was in the Napa Valley last month, drumming up business. Arking is hardly a typical retailer in the bricks-and-mortar sense or, for that matter, in the normal Web-commerce sense. His website, winestilsoldout.com, sells just one wine at a time and at an incredibly steep discount until it's gone without a trace -- usually within eight hours. While Arking doesn't like to use the word "liquidation," the wine's swift and mostly silent evacuation is the website's greatest virtue.

In ordinary times a Napa winery wouldn't bother even meeting with a guy like Arking. But with wine sales at a virtual standstill, wineries, importers and the wholesalers who make wine available to retailers and restaurants have had to resort to some unusual, some would say drastic, measures to get wine out the door.

Born of opportunity, wines tilsoldout.com and similar sites such as winewoot.com and thewineliquidator.com have become one of the industry's most effective underground sensations. While each of these websites takes a slightly different approach, they all work to the same end: acting as a vehicle for moving wine that might otherwise be gathering dust in a warehouse -- often without undercutting the wine's hard-earned reputation.

The method is mildly sneaky but surprisingly efficient, and wineries, importers and wholesalers alike are warming up to the possibilities offered by this back-channel pipeline. In fact, of the 27 sales meetings Arking took in the Napa Valley, half signed on. Once they've had a few more slow weeks to think about it, says Arking, he believes that number will be closer to 90%.

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Swift sales

As a concept, winestilsold out.com is as straightforward as its name. The website sends an e-mail blast to subscribers (now numbering in the tens of thousands) for one wine at a time, at a carefully calibrated discount as much as 70% below its original retail price (and 30% lower than other discount offers). The wine is sold on the website until it's gone, whereupon another wine replaces it. Usually two and sometimes three wines are offered daily. Depending on the bottle price, when you buy multiple bottles, shipping is free -- a substantial additional savings.

As for the daily selections, they're as random an assortment of wines as you can imagine -- every price point, country, region, shade, flavor and grape comes up for review. Australian Mollydooker's bruising "Blue-Eyed Boy" Shiraz (once $70, now $30) is followed by Gaja's Brunello "Sugarille" (once $150, now $75), followed by a Carneros Chardonnay from X (like the band) Winery (once $25, now $11).

Nearly all of these are current vintage selections, not unknowns, not has-beens, not closeouts -- occasionally there's an end-of-vintage bargain, but for the most part these aren't "dead stock" offerings. Nor are they obscure -- high-profile wines like Penfolds' "St. Henri" Shiraz at $30 (50%), Roederer's luxury Champagne Cristal for $190 (46%) and the legendary California Cabs from Caymus, Rubicon and Silver Oak have all been featured, their once-lofty suggested retail prices (pushing $150) now slashed by as much as 50%.

For wineries, perhaps the site's most attractive feature is the brevity of the sale. Most are completed in a matter of hours -- and for a winery whose claims of luxury are backed up by a high price tag, avoiding any erosion of their perceived value is a key selling point. "We offer the opportunity to sell wine directly to a wine-loving consumer, without ruining any of the other possibilities on the retail or restaurant side," says Arking.

"It's such a short time window," says Giacomo Turone, a sales executive for Palm Bay Imports, who has moved more than a dozen hard-to-sell Italian wines through the site. "It doesn't undermine the price positioning of the brand in the long term. It's not on their website for months -- it's on for eight hours."

Beneath the surface of this activity is a revealing glimpse of the wine industry in its current state. The glut created by slowing sales has been made worse by the trend toward consolidation of wholesalers and distributors in recent years; most sales forces have been slashed, even as the number of wines they're responsible for selling balloons -- it's increasingly common for brands to face stiff competition not just in the market but within a distributor's portfolio.

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'Crazy deals'

This is exactly what prompted John Gorman to start his website, thewine liquidator.com. Gorman already had a bit of a double life: He runs a wine importing business called Southern Starz, as well a retail shop in Huntington Beach called Southern Hemisphere Wine Co.

This has put him in the unique if uncomfortable position of being squeezed by his distributors to trim the number of brands they were required to carry on the one hand, while being offered incredible deals by other wholesalers on the other.

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