Parameters for a local wine shop business?

The rise of the "wine warehouse" is a relatively recent phenomenon, the "neighborhood" shop having been the de facto standard IMO. The success of the big stores I would suspect stems from an economy of scale: they buy wines from distributors in such quantity that they negociate lower wholesale costs than the small guy can. However, in both Manhattan and Berkeley the neighborhood model lives on. Why? In both places, you have what is now rare: pedestrian traffic. Additionally, the most successful neighborhood stores offer two things that the warehouses do not: insightful (and personalized) advice and a selection of smaller -- often artisanal and price-conscious -- wineries whose production is too small to be of interest to the big guys. To select a location, I'd look for somewhere that gets a fair amount of traffic, that is also near to big and reasonably affluent residential areas and is as far as possible from the nearest BevMo, Trader Joe's or Costco ;-)

Mark Lipton

On Sun, 23 May 2004 23:00:13 GMT, Mark Lipton took the time to tell us :

Mark, your points seem to me to be right on the mark. Don't know whether retail strategies from 'Down Under' will assist the OP, but we too are having a 'slug fest' with the major distributors, but cannot help think that the dedication required to be a stand alone independent wine reseller is universal.

I get sick and tired of hearing the bleating from fellow independents about the econmomic advantages enjoyed by the chains/franchises of the Big 4. Rather than play that game, I found a very upwardly mobile area to ply my trade, continued attending everry possible trade show, and PROUDLY stock wines from a myriad of independent winemakers, (admittedly blended with some well knowns, to appease the minority in my area who have an adventuresome streak as wide as a nail clipping). Results were not immediate, but 5 years down the track, when turnover is 3 fold, and I can enjoy the accolades of recommending wines, when buyers return to laud praise on the wine selections I made for their function/party / etc etc. Apart from a self indulgent rant, my only advice to the OP is simple....... decide your startegy BEFORE you buy, and go for it. Back your judgement, kill the customers with service, and don't necessarily entertain comparitive pricing is the pre-eminent factor in wine buying... they LOVE being given advice, if done sans snobbery, and with the attitude "their" night is imporatnt to you too. Otherwise....buy a franchise...... :>)

Regards Swooper

The warehouse stores are great if you are wanting to purchase bulk for a party, and don't need advice on what you are buying. Looking through the selections at Costco, Sams, World Market, etc. I find the same generic stuff

Local wine shops offer personalized service from (hopefully) knowledgeable staff, tastings, accessories, broader selection both horizontally and vertically (more regions and more years) than the warehouse concept. In addition, most local wine shops store the merchandise in better conditions (think about the average tempareture in Costco or Sams).

You may also consider expanding outside of wine to include fortified wine (port, sherry, etc.) and possibly top-shelf liquor such as Single Malt depending on local liquor laws and licensing. For instance, in AL you can't have tastings if you also sell liquor. However, the convenience factor of being able to get all of my alcoholic beverages in one place is a good draw.... so long as it doesn't become just another package store.

All in all, local wine shops are thriving and will continue to do so for a long time. Personally, from a retailer perspective, I would want to be in a decent shopping center where there is enough draw to get people in and visibility to major highways. A clean, well laid out store format and friendly, knowledgable staff are critical. Don't be afraid to be near a warehouse store either. Sure, they will always beat you on volume price, but they will never win on customer service... and that's what keeps my business.

Cheers, Gary

Actually, it's a licensing issue --- a wine shop can sell Port and other fortified wine if they choose to purchase a license to do so.

The reason most don't is that the state ABC controls the distribution of Port in AL and their selection is the absolute pits. There were some rumors that they were getting out of the business and turning it over to private distributors, but what they have instead decided is that it would be better to reduce their already weak selection since they don't seem to sell very much of it.

Agreed, this is the same way in San Francisco. There are numerous small wine places, and there are also a number of wine 'warehouses' that seem small (like the Wine Club) but have a pretty good revolving selection of wine.

For an example, if you can make it to SF, I'd take a look at the Plumpjack store in Noe Valley. It's a small store, with great service and a great selection. Although the PJ wine is in the window, they never tried to push it and all their wine was priced reasonably, I thought. They were great at recommending wine, which is why I went back a number of times.

good luck, K

Just a few notes from someone who shops at all levels of the wine selling frenzy. When I want good wine, I pay for the advice accompanying it, when I want drinking wine, I buy cheap.

The underscore in the excerpt is "friendly, knowledgeable staff". You might know everything, and you might be incredibly personable, but you will not be there all the time. Your only advantage over the warehouse type place is your staff, and then your different selection of products. If people believe that they can ask absolutely anything, then you will sell wine. Run tastings for your staff, introducing new lines. They must also be interested in wine itself, not just selling it.

You will of course have people who are shopping for a big event, come in, pick your brains, and then go to the warehouse to buy what you've recommended. Let them. Bend over backwards to give them useful information, even ring the warehouse for them (you might win off the guilt trip!). The customers you keep will remember this. The customers you won't keep were lost to you anyway.

Cheers,

Andrew

Another place to check out, which is much closer to Orange County, is the new Silverlake Wine Company (in Silverlake, AKA Los Angeles) It's run by a couple of sommeliers and their approach to the concept is great. Obviously I would not advocate copying them, but it's always good to see something that works in action. E.