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Does Amazon Have What It Takes, This Time?

Web retail giant takes its third stab at wine
Photo by: David Yellen

Posted: Oct 3, 2012 11:00am ET

I've been writing about wine and the Internet since the Dark Ages of the mid-'90s, so I felt déjà vu all over again last week when I heard that Amazon was giving wine yet another try.

Three strikes Bezos and you're out!

Jeff Bezos, of course, is CEO of Amazon, and this will be the Net giant's third attempt at wine in the past 12 years. Let's hope this venture won't be as cursed as the first two.

It was big news back in April 2000 when Amazon said it was investing $30 million in a startup website called Wineshopper.com that would reportedly reach 70 percent of American consumers by the end of the year. But you see, there was only one problem: the dot.com bubble began venting hot air a few weeks before that, then the stock market tanked and Wineshopper never got off the ground.

Amazon tried again in September 2008 but just a few weeks later the stock market tanked AGAIN. By October 2009, Amazon pulled the plug, reportedly weary of trying to make money amid the tangle of interstate shipping regulations.

Now that Amazon is at it again, I'm thinking I should close out my 401K.

If Amazon does pull it off this time, it could be a boon for consumers and producers. The company did have $48 billion in sales last year. That's a lot of muscle to potentially drive wine sales, depending on the model of course.

We don't know a lot right now. Amazon won't comment, but it is meeting with vintners in Northern California as I write this. Anyone who wants to learn about the "Amazon.com Wine Marketplace" has to sign a non-disclosure agreement, so it's hard to know what is true and what's rumor.

From what I'm hearing, it won't be all that different from the "Product Ads from External Websites" system Amazon already has in place. This is how that works now: Outside retailers pay to have products listed on Amazon.com. Even now there are multiple listings from wine retailers selling Turley Zinfandel. You are given two choices to buy it:  Add it to your Amazon wish list (whatever good that will do) or, displayed more prominently, is "Available at external website." Click on that link and you leave Amazon and are sent to the website of the wine retailer. It's up to you and the retailer to work out the legal details of how to ship it your way.

With the new Wine Marketplace, Amazon will similarly direct the consumer to a winery website, then hand off the deal for a nice 15 percent commission, at least according to one report. Wineries will still have to take care of shipping and various regulatory hoops involving interstate sales.

For now, there are more questions than answers. Will only American wines be sold? Nothing from France or Italy or beyond? If Amazon isn't ironing out any regulatory wrinkles, how will this be any better for consumers than buying directly through the winery website? 

Time will tell, but—Hey, Amazon—the wine world is watching. If you drop the ball this time, I'm not sure anyone will pay attention if you try a fourth.

Harvey Steiman
San Francisco, CA —  October 3, 2012 12:27pm ET
No doubt Amazon believes its presence and reach will help wineries sell enough additional wine to be worth the 15 percent it takes off the top. Also, Amazon's muscle can help wineries get cheaper shipping options, which could be beneficial for consumers. The details are still too hazy to know whether this will be a good thing for all concerned.
Jerry Potter
Charoltte, N.C.  —  October 3, 2012 2:19pm ET
Don't know who is running it but winwshoper.com is still operating. Pretty good selection and fair prices and fairly cheap shipping. In fact with a $99 purchase shipping is free.
Robert Dwyer
Wellesley, MA —  October 3, 2012 5:27pm ET
If they just direct consumers to a winery website I don't see this having much of an impact. Until the transaction is completed on Amazon it seems wine-seacher would remain a far better way to connect consumers with wineries and retailers. In order for it to be useful, they'll need to tell me whether they can ship to my state and how much the product will cost fully loaded without having to waste time on each winery's website.
Tim Fish
Santa Rosa, CA —  October 3, 2012 7:44pm ET
Thanks for the comments everyone.

It will be interesting to see how this all plays out.
Global Wine And Spirits
Orchard Park, New York,USA —  October 9, 2012 11:02am ET
I agree with Robert. Wine Searcher can direct to sites(stores)very well. Not sure about the need for another web retailer site that can do that.

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