If you are considering selling off your cellar treasures, it's best to keep in mind the old adage that "a thing is worth only what someone else will pay for it." And whether it's just a few bottles or an entire collection for sale, the real trick is finding that someone.
Among brick-and-mortar auction houses, online person-to-person sales, retail consignment and informal trades, the secondary market for wine sales is vast and decentralized. Regulations regarding sales of alcohol vary from state to state, adding another layer of complexity. (A good first step when considering the sale of your wines is to check with your state's alcohol bureau to see what is permissible where you live.)
Which wine-selling venue is best for you? No surprise here, but the answer depends on the number and the quality of the bottles you'd like to sell. And if you go the auction route, expect a few dollars to be shaved off the final hammer price—after seller’s fees, insurance and taxes. Before you approach anyone, here’s what you’ll need to consider—to save yourself time and money—before you put your wine on the auction block.
Check an auction price database, such as the one here at WineSpectator.com. If your wines have a track record for auction sales, there's a good chance that reputable auction houses will be interested in them. Think you've got an exceptional bottle but there's no price history? Of getting such a wine accepted into an auction, Mark Smoler at Hart Davis Hart says it depends highly on the wine: "It is improbable but not impossible." For online auctions or retail consignments, the circle of wines accepted is wider, but still somewhat limited. Do some research on the prospective outlet's current inventory to see if they carry similar wines. If your bottles don't show up in your search, it doesn't mean they won't be accepted, but your odds are longer.
By economic necessity, most auction houses are only interested in larger consignments that will pay off for their time investment. Jamie Ritchie of Sotheby's puts the minimum value of a collection he'd consider accepting at $20,000. Auction houses also take the makeup of the collection into consideration; multiple bottles of the same wine are easier to process than single bottles of different wines. Having multiple bottles also allows auction directors to sample your wine to give them an idea of authenticity and how well the wine has been stored, something John Kapon of Acker Merrall & Condit says is key. Some wine companies, such as Hart Davis Hart, Acker Merrall & Condit and Zachys, offer a mix of outlets, both retail and auction, to handle a wider variety of wines. Online auction sites vary in their minimum consignments. Winebid.com lists a $2,500 minimum value, while WineCommune.com has none.
Auction houses are generally interested only in bottles that have been stored in professional-grade storage with regulated temperature and humidity. Collections stored in passive cellars with ideal conditions are considered, but most auction directors say those are rare. Other outlets are less strict, but some sites, such as Winebid.com, will note how the wine was stored in the sale description. If you can prove that you acquired the wines from a reputable source, you have a better chance of getting the bottles accepted.
Many venues offer free appraisal of bottles you intend to sell. Make a list of your wines, where you bought them and how they were stored, and send it out. Meanwhile, consider when you want to sell the wines (transporting your wines will cost more in summer, when temperatures demand overnight shipping) and investigate the other following costs you may incur:
SLIDING-SCALE SELLER'S FEE: The most important issue facing a potential consignor is the auction house's seller's fee, which can range from zero to 18 percent of the final bid. Acker Merrall & Condit and Morrell & Co. never charge any seller's fee whatsoever. The remaining commercial auction firms impose a sliding scale that will vary according to the rarity, quantity, quality and condition of the consignment. If a collection is particularly valuable or noteworthy, the seller's fee may be waived entirely. If the consignment is significant, a seller's fee of about 6 percent is fairly standard. Since the final amount is negotiable, it's worth shopping around in order to get the best rate. If an auction house is interested in your consignment, they will likely send you a provisional estimate (based on recently realized prices) along with a reserve price (the privately agreed-upon sum below which your wine will not be sold) and the proposed consignor's fee. Then it's up to you to decide.
INSURANCE: Some houses impose an insurance charge that works out to about 1 percent of the estimate and covers your wine while it is in their temperature-controlled storage facility prior to the sale. However, if your wine is already insured under your homeowner's policy, ask to obtain a waiver if your personal plan bears a better rate.
TAXATION: Most auction houses render payment within 35 days after the sale-providing they have been paid by the buyer. (If for some reason a buyer defaults on his bill, the auction house is not liable.) Unlike brokerage firms and corporations, auction houses do not issue 1099 tax forms on their sales. So it is up to you and your accountant how to handle the tax consequences of your profits, if any.
• Approach multiple auction houses to find the best deal on the wines you'd like to sell.
• Auction houses make a provisional estimate based on the collection's size, storage conditions, and how rare and valuable your bottles are.
• If your collection is very valuable, the fee may be waived, but 6 percent is fairly standard for a large cache.
Read the companion piece to this article, Cellars 101: How to Buy Wine at Auction.
ACKER MERRALL & CONDIT, (877) 225-3747, www.ackerwines.com
BONHAMS & BUTTERFIELDS, (415) 861-7500, ext. 307, www.bonhams.com
CHICAGO WINE CO. , (630) 594-2972, www.tcwc.com
CHRISTIE'S (London), +44 (0)20 7752 3140, www.christies.com
EDWARD ROBERTS INTERNATIONAL, (847) 295-8696, www.eriwine.com
HART DAVIS HART, (312) 482-9996, www.hdhwine.com
MORRELL & CO., (212) 307-4200, www.morrellwineauctions.com
NYWINESCHRISTIE'S (New York), (212) 463-8600, www.christies.com
SOTHEBY'S (London), +44 (0) 20 7293 5014, www.sothebys.com
SOTHEBY'S (New York), (212) 606-7050, www.sothebys.com
SPECTRUM (Irvine, Calif.), (888) 982-1982, www.spectrumwine.com
ZACHYS (New York), (914) 448-3026, www.zachys.com/auctions