When I got home from the UK in 2019, I naturally hit the wine shops to find a new supplier. And I couldn’t believe my eyes when I saw the prices.
The crazy thing about the wine industry (everywhere, not just Ireland) is that the more you spend on wine, the more you actually get ripped off.
For years I’ve thrown around this problem in my head.
What is the point of stocking the most amazing wines, but only an elite few can actually afford to buy them?
So I analysed hundreds of cost prices for wine available in Irish retail, and a few things jumped out:
- A typical €25 in the shop costs €7-8 from the producer
- A typical €50 in the shop costs €15 from the producer
- A typical €100 in the shop costs €30 from the producer
The more you spend on a bottle, the less value you actually get. Crazy huh?
Why is this? I can think of a few reasons
- Supply chain inefficiency - especially the smaller the producer, the higher the cost
- Duty/taxes - yep VAT is higher but duty is static no matter the bottle price
- It’s an inefficient model The expensive wines sell slowly or accumulate bottle age, have to justify their place on the shelf, therefore accumulate cost
- It’s the way it’s always been done - slap 3-4x margin on everything
- A bit like business class airfares - the few people that shell out for the most expensive wines prop up the rest of the operation
- People get away with it - there’s an established price for Grand Cru Classé Bordeaux, and if people are happy to pay it, then why not
So how do you remove the margin mountain on price and genuinely give people better value?
The absolute key to this is customer loyalty.
That’s why I’ve come up with the WineSpark business model...
- You subscribe for €10 per month, so I make my money from this
- You get the wines at no markup - so you access the best wines at the price they actually cost
- And to keep your loyalty each month, I give you great service and invite you into a community of fellow passionate wine drinkers - so you can meet winemakers at tastings, and can experience wine regions like locals when you next travel
Give it a go and tell me what you think!