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How To Sell Wine Online

Over the last 25-30 years, wine sales in the U.S. have increased at a fairly good rate, and according to research by the Wine Institute, the United States has been the top market for wine in the world since early 2014.

When you look at some of the numbers, you can start to understand why:

  • There are almost 10K wineries in the U.S.

  • From early 2006 to 2016, wine production was up by nearly 25%, with 2016 volume totaling over 800MM gallons

  • The annual per capita consumption of wine per US adult is 2.9 gallons — up more than 20% since mid 2005 - but the channel with the most growth was consumer direct sales.

Whether you compare it to supermarkets, convenience, or small wine shops, winery direct shipping has been the leading retail channel.

In fact, the 2018 Direct-to-Consumer Wine Shipping Report, states that there are two primary reasons for this growth.

  • First, not only are new states entering into wine shipping, but they’re also doing very well. For example, Pennsylvania started allowing shipments in August 2016, and in terms of overall sales, it is now among the top states

  • In 2017, online sales for BevAlc increased by more than 33%. Wine was the most popular liquid, accounting for over 65% of sales. Looking at ecommerce in general, Forrester Research reports that 17% of all retail sales will be from online transactions in less than 5 years.

Next we’ll look at the increase of online wine sales and how wineries and retailers can take advantage of this expansion.

Wine online sales are expanding quickly, thanks to services like Uber and Instacart, today’s consumers can have nearly anything delivered directly to their homes. What consistently remains missing from the list of these available items is alcoholic beverages. Considering the regulations BevAlc items have to contend with, it’s understandable for the average wine seller to be slower to adopt online sales. However, this isn’t to say that only a few wine sellers are taking advantage of ecommerce. In fact, it’s quite the opposite. Last year, the volume of DtC wine shipments totaled 5.8 million, representing a 15% increase vs the prior year. The value of these online shipments came in at a milestone of $2.7 billion in 2017. Online marketing allows wine merchants to connect with consumers across all markets and far beyond their home states borders. In fact, ecommerce software enables wine sellers to gather intelligence on wine consumers that they can use to create targeted emails and ads across different channels. This personalized marketing approach is much more likely to attract new buyers than the older more generic ad content.

CRM software can be integrated with a robust ecommerce platform, giving you the power to get a complete profile of every potential buyer. You can offer product recommendations and exclusive offers based on the specific wine preferences. These strategies simply aren’t possible for regular non-digital wine retailers.

Do I Need a License to Sell Wine Online? The required license to sell wine from an online store depends on the state in which you do business as well as the states you want to ship to.

Below are the most common forms you’ll need to complete as well as the licenses you may need:

  • Alcohol Dealer Registration from your home state

  • A winery license from your home state

  • A retailer’s license from your home state

  • A shipper’s license for each state you plan to ship to

  • Direct shipping agreements with your carriers

Next, we’ll take a look at what it takes to legally sell wine directly online. Navigating each state’s specific laws can be quite challenging. Each state has its own rules and regulations regarding the shipment of wine, and some are much more strict and can create a lot more challenges.

In some states, only wineries are allowed to offer direct shipping, and in others, retailers can engage in DtC shipping without issues. Moreover, some states have limits on the volume of wine that can be shipped.

What Shipping Carriers Can I Use To Ship Wine? Unfortunately, not every carrier will ship wine, and others have a few requirements you must abide by. For example, you can’t ship alcohol via US Mail, but you can ship using UPS and FedEx.

In order to ship wine with FedEx or UPS, you must do the following:

  • Register an account online

  • Sign an alcohol/wine transportation contract

  • Create shipping labels with the carrier’s electronic shipping solution or an approved 3rd platform

  • Abide by the packaging requirements for alcohol/wine.

  • Choose the signature service option

  • Affix an alcohol/wine shipping label

You can visit the shippers websites to learn more about these requirements.

How to Incentivize Customers to Buy Wine Online? Engaging in wine online sales can offer many benefits for wine sellers, but in order to take advantage of those benefits, they need to convince customers to buy from them.

Here are a few ideas to help get you started:

  • Allow buyers to return orders to your wine store

  • Provide free or flat-fee shipping rates

  • Send loyal shoppers coupons and/or early access to special online sales

  • Email customers recommendations for wine products

  • Connect with customers on social media accounts and ask for their feedback about products

  • Create educational content about wine and wine drinking occasions

There is not a perfect solution for selling wine directly to consumers. Every part is somewhat complex compared to selling other products online, and the fact that alcohol is one of the most highly regulated food and beverage items you can sell. That doesn’t mean it’s not possible. You just need to be educated on the process, the laws and do your homework. Then the reality of selling wine online becomes more achievable and you’ll be up and running in no time.

Please reach out to the BevCom Group today to discuss how you can take advantage of both direct-to-consumer shipping and extend your sales within traditional channels - we’ll work with you and grow your business beyond what you imagined was possible.

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