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Amazon Eager to Build Wine Market

(Paso Robles, California) — Amazon is committed to wine for a “long, long time,” says Peter Faricy, the executive in charge of the firm’s marketplace, who adds the web retailer is enjoying success with its latest foray into the wine business.

Opening the second day of last week’s WiVi conference, Faricy said Amazon is now working with “hundreds” of wineries to sell their wine. During a question-and-answer session with Wine Business Monthly editor Cyril Penn, Faricy described Amazon’s wine trade in only general terms, saying he could not disclose any specifics such as sales figures or the exact number of wineries who are working with the web retailer.

Faricy did say that since Amazon launched its wine segment in November with more than 200 wineries, it has averaged about 20 to 25 new wineries a week. “We’ve been super pleased with the reception so far,” he said.

Amazon currently offers shipping to 15 states and Washington D.C.

Faricy said the No. 1 question from consumers about wine sales is about when Amazon will begin shipping to their state. He said the site is working as fast as possible to add other states while ensuring complete compliance. Under its current model, Amazon will never handle wine directly, relying instead on the wineries to handle fulfillment and shipping. Even if a winery can legally ship to consumers in a state not currently served by Amazon’s wine marketplace, it won’t be able to sell wine to those consumers through Amazon.

This will be Amazon’s third venture into the wine business following two previous attempts with partner firms that went bankrupt. Faricy said the site just has wine from California, Washington, Oregon and New York, but he wants to expand its offerings of both domestic and international wines.

“We want every single winery there is to sign up for Amazon Marketplace,” he said.

Winery closes the sale

Amazon is acting as a portal for consumers to find wines, but it’s still up to the winery to set prices and close the sale. Currently Amazon is waiving regular fees for wineries that join the marketplace, Faricy said after the session. He said for the indefinite future any winery that joins with Amazon would only have to pay a “referral” fee of about 15 percent of the purchase price.

In exchange for the fees, Faricy said wineries enjoy Amazon’s huge consumer base and online sales support. The firm also gives wineries a place to showcase their wine and tell their story to consumers they may not normally get a chance to market wine. Faricy said wineries have reported back to Amazon that many of the sales recorded through the website are to new customers that were not already in their sales records.

“I think that’s really important to wineries,” he said.

Being able to leverage Amazon’s vast consumer reach with its history of online retail makes it a better choice for a winery than other online retailers, Faricy said. Amazon also ensures each winery has plenty of space for photos and brand information as well as the background of the winery.

“They get a chance to tell their own story,” he said. He said wineries looking to work with Amazon could contact the company directly through its website.

SOURCE: Wines & Vines

 

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