A good article - and spot on indeed. The âamazon effectâ is real - or on this site, letâs call it the âdenegoce effectâ
It is costly to ship wine, and wineries that offer fairly âvalue pricedâ wines donât have a ton of margin to play with - and no, shipping is NOT a profit center for most wineries (though I have seen some OUTRAGEOUS shipping costs for some wineries in the past few years).
Interested to hear what others have to say on the issue . . .
Shipping costs are as real as fruit, labor, equipment, etc.
In a world where shipping for almost every other consumer good is subsidized or included, wineries can either fight against the trend and lose or figure out how to incorporate subsidized or included ($1) shipping in their business.
I think most times Iâve seen crazy shipping charges is when someone has a shipping table wrong in their software.
Donât even need to read it. Shipping is HARD. We have a full time person that just does that. He started as a tasting room person with shipping responsibilities and now all he does is shipping. Thatâs it you say? Thatâs also managing and bringing in inventory (most wineries donât have the capacity to carry tons of stock at the winery and while weâre better off than many itâs still inventory in and out all the time). Itâs managing and purchasing shipping material (it takes up space, BTW). Itâs working with the 2 main common carriers and if you think thatâs funâŚno. Itâs getting everything right 100% of the time and even when the customer screws up (âOops, I meant to have you ship it to my home/office/other home/wine storage/family member, etc. can you deal with that?â) you deal with it. Itâs making sure the software is up to date. Itâs tracking weather across the country. Itâs managing time (how many packages and how long will it take to pack them?) Itâs literally managing the dudes that pick up and dispatch on heavy days and weeks. Itâs dealing with returns for any number of reasons. I could go on but you get the picture.
As you whittle it down to smaller operations the ability to hire someone to do this evaporates and someone that has production responsibilities ends up with this job and it overwhelms them.
On top of that you have the psychology that everyone (including me) has that all shipping for everything, anytime, anywhere should be free. The cost of shipping, salary/benefits, materials, warehouse charges and so on is well into the 6 figures for us. Iâm not complaining. Weâre fortunate and I know it. Iâm just stating what we as a winery go through and the costs incurred.
In addition Wine (and other beverage alcohol) is unique in each State having itâs own regulations, compliance and filing mandates and tax hurdles that add complexity and cost.
Itâs certainly good to call attention to the challenge but hopefully itâs not news to anyone on this board that wineries struggle to deal with shipping - both the cost and logistical nightmare. Itâs not easy and I really appreciate all those who choose to deal with it.
I have no illusions you guys are getting rich off the shipping. But I also get that we on this board probably in the minority of those customers who understand these realities.
I see Hardyâs point about figuring out how to âinclude shippingâ, given that other sectors have figured out how to do so. But I think one challnege to that is itâs a bit like tipping in the restaurant industry, no? One restaurant can suggest eliminating tipping (for all the right reasons) but if theyâre the only ones in the area doing so, they look artificially expensive. If most other wineries donât go along, do you suffer?
I didnât even go down that road! We pay a compliance service company to manage all the regulations, applications, reporting (most of it Bizantine and unnecessary except as a barrier to entry), tax payment filings and so on. That service is not free.
For instance beginning 1/1/21 we will fall into a category of wineries shipping into Illinois (based on dollars and shipments) that will not only have to collect, report and pay Illinois state tax but all local municipalitiesâ taxes.
Iâm sure shipping costs are expensive, but as the consumer, thatâs not my problem. Iâm certainly very price sensitive for shipping costs than the cost of the wine and will often close out of orders because of it. I doubt others are any different. I hardly bought anything from that Zachyâs sale because after shipping and NY sales tax the deals werenât really that attractive.
I am looking to focus my wine budget on the most vulnerable of my wine favorites this next year. It is hard to know exactly who that is but the smaller producers are my goal. The shipping issue is one that has been part of the âeverything is always on saleâ attitude that pervades retail. No one wants to pay the listed price and we all expect the deep discount. In a normal year that is the way but this years so many of the businesses I love are on the precipice be them wineries, restaurants, small gift stores, bars and music venues. These folks need help and cant afford to discount. In San Jose, restaurants get clipped 30-40% of a bill to foods delivery apps which is why I pick up my own take out food. Sometimes the best price is full price. A bargain is no good if it is from a going out of business sale.
Whether it puts a purchase beyond your comfort level is certainly an understandable issue, but your statement implies a blindness to the reality of businesses trying to manage financial realities.
Thatâs just madness!!! if the states want to collect the taxes, they need to make is SIMPLE.
I feel like I should video tape a day in the life of warehouse worker in the wine industry, and push it to go viral. The amount of work that goes in to shipping the volume out the door is insane. It also used to be a lot easier when you could use styro, and with the corrugated, itâs just adds so much time every day.
Mostly the laws are about keeping wineries out than collecting revenue. Sure, if a winery jumps through all the hoops theyâre happy to have the cash but for the most part the difficult nature of the laws and bureaucracy is intentional so as to make it not seem worthwhile to even bother getting into the market.
I doubt itâs a rare sentiment. With a few rare exceptions I wonât buy from any vendor that doesnât subsidize shipping to a significant degree. That may be indeed be an Amazon-related effect, but it just is what it is.
In the toy industry, many manufacturers have joined together to form a group; so they can obtain better rates. I hear theyâre shaving a few points off the charges. Someone in Oregon, Napa, Sonoma, Central Valley, and other regions should research this.
Apples and oranges. Every winery has to sign individual contracts with the common carriers. We have to, in some cases, report the tracking numbers of shipments to individual states. Toys are legal to ship everywhere. Alcohol is not. Wineries use 3rd party shippers to ship club shipments (or even regular stuff) so thereâs that kind of aspect but thatâs different than what youâre talking about. I think.