Who needs retail stores for case orders?

In my neighborhood, the typical distributor does between 10 and 100 million dollars, US a year. He has no interest in setting up the retail outlet personel and modify his facility to sell you a crummy $2-500 case, waste half an hour, and service you and answer your stupid questions.

My retailer places a call to the distributor, the order is billed, pulled, and put on the truck with the rest of the retailer order. very efficient.

I had retail customers >In the United States, if a want to buy a wine in case quantities, why

The 3 tier system for alcoholic drinks in many states increases the price of drinks to customers. The wholesalers, distributors, and importers like things just as they are. In many, if not most states, even a retailer can not order from out of state. He or she must go through a state distributor. In many cases a major retailer could place an order with a California winery, for example, that is as large or larger than that placed by many importers. Huge sums of money are contributed to state and federal officials(usually legally) to try to keep things as they are. The distributors and wholesalers will even team up with anti-alcohol groups to fight against allowing retail customers ordering wine from out of state, or even in state, bringing up visions of underage children buying alcohol over the internet or by phone or mail. More and more states allow direct order from out of state by retail customers, and recent federal court decisions have placed limits on how restrictive some state laws can be. However I expect it will be many years before anyone of legal age can freely order alcohol from anywhere in the US.

The restrictions in many states are much more severe than in NY. However, many retailers will arrange to mail wine to adults in a state even though the state does not allow it. Title is transfered to the wine in the state in which the retailer is located, and an employee of the retailer acts as the agent for the buyer to engage a transportaion service to ship the wine. The worst that usually can happen is that the wine does not reach the buyer, and in that case collection for the loss from a transportation company can be difficult to impossible if the buyer of the wine lives in a state that does not allow direct purchases from out of state.

Wine, or any other liquid, except in very small bottles, can not be shipped anywhere in the US through the USPS. This restriction dates back a very long time. I heard one theory that this is not allowed because the bottles might break when the elephant sits on the mail to better pack it for shipment. An elephant with a large piece of glass in the rear might become very unruly and refuse to pack down any more mail :-) .

Yes, there's an inordinate amount of protectionism in the wine/liquor industry, affecting both the vertical chain of distribution (vineyards, wholesalers, distributors, importers, and retail stores) and the horizontal (trade across state lines). We think of the United States as being one of the world's most productive economies, with relatively little overregulation, but the facts in many sectors of the economy suggest otherwise.

- Richard

"gerald" wrote ..............

Gerald, a few years ago I was the marketing manager of a small, regional winemaker; we had OK sales in our home territory, but could not crack the large Auckland market (over 1m population).

Distributors and retailers just wouldn't look at us (chicken and egg stuff - no consumer demand!)

I crunched some numbers, and convinced the directors that we should "go direct" - via mail order.

The goal was two-fold: (1) sell some wine (you obviously know that inventory is unprofitable until it is sold!) - and (2) build a profile for our wines (getting consumers to pull corks!)

At the risk of boring some, let's assume that the average "into-warehouse" price to the distributor was $16; the distributor added their 25% (now $20) and on-sold to the retailer who added his margin to come up to a retail price of $28-30.

We went to the mail order market at $25/bottle + freight (In those days, $5 / case)

In year 1, we sold 1,000 cases into the Auckland market, all paid for cash-up-front-before-dispatch.

The winery made an additional $110,000 to cover the cost of running the campaign (and I can tell you, the actual cost was more like $50k.)

Within that first year, four Auckland based distributors and every major retail chain wanted our wines!

So, whereas I do understand that there IS more work and expense, the additional margin more than makes up the difference.

And there is a further benefit - at least, direct purchasers do actually pay for the goods prior to dispatch, rather than want extended credit!

I much prefer the addage "Selling is the only thing in business which contributes to profit! Everything else is a cost!"

You said: "small, regional winemaker"

Does this winemaker ship to the USA ??

don

A comment from you matey, Dee Dee Good Lord, man! Isn't this the way it has been done for-EVER with everything? Think about it, you say? Who hasn't?

I'm thinking right now about a product that I wish to buy; I believe it is set up so that one does buy it from a distributor -- guess what, I emailed them on the 16th for a price - no price online, of course. I'm thinking: if this were a retail place, would they be quicker to respond than a distributor, or would they just as readily avoid answering. (A $1K purchase.) Dee Dee