Mark's Wine Blog

One of the things my business partner and I have discussed over the past couple days comes down to the chicken and the egg for me.

How do you approach potential customers without having wineries already signed up and ready to ship?

How do you approach wineries without having a customer base to start with?

I think I now see why most, if not all successful wine clubs are started by wineries or companies that have brick and mortar stores.

I think there are a few ways around that on each side of the equation……but it is an extremely difficult problem to solve.

On the bright side we are moving forward with our federal paperwork.

Another chicken and egg question though comes up:

When do you file paperwork to ship directly to each state? Before you have customers? You increase your financial risk in doing so. After you find paying customers there? You risk alienating those new customers if it takes 60+ days for them to receive their first shipment.

Interesting questions all and it isn’t like there is a business plan out there that can answer them for us.

Enjoying the Experience

One of the things that a lot of people miss out on regarding wine is the entire experience of tasting at the winery and all that can come along with it.

My wife and I spent a couple of nights a couple of years ago at South Coast Winery (http://www.wineresort.com/) in Temecula. Why think of this so long after the fact, well my business partner Matt may be tasting today at the Ferry Building in San Francisco and I was reminiscing about one of my favorite tasting memories.

Temecula doesn’t yet produce world class quality wine, but there are a number of offerings which are getting close to that level.

My wife and I stayed at South Coast, frankly because it is, last I checked, the only Temecula winery which has a restaurant and hotel on site.

It’s a nice trip for those in Southern California, or anyone visiting. Temecula is about 90 minutes north of downtown San Diego. Before you ask, no I have no idea how many miles. We measure driving distance in time in Southern California because of traffic, I know that’s different then the rest of the country.

Some highlights of the trip-tasting on site, a great 1000sq foot room basically in the middle of the vines, a nice massage and some time tanning by the pool.

Being able to enjoy wine, but also part of the lifestyle of the vineyards, being able to get away for a few nights and relax is something that I greatly enjoy.

State by State by State

As many of you know each state has its own specific rules regarding the shipping of wine.  Generally speaking these laws are difficult to understand and frustrating for a company like ours, no we don’t have a name yet, it makes it very difficult to have a proper launch of a wine club when each state has vastly different paperwork that needs to be filled out.

Some highlights courtesy of the Wine Institute which puts these laws into the easiest to understand format I’ve found anywhere:

http://wineinstitute.shipcompliant.com/StateDetail.aspx?StateId=6

My home state of California requires a permit for all out of state wineries which plan to ship directly to consumers living in California.  At first I thought, great this is going to be a barrier to entry for our competition……yeah the permit costs $10 and there are no volume limits.  Thanks for all the help there Arnold.

We know after speaking with the alcohol beverage control board that we only need a federal permit to get started with in state customers.  At least that’s pretty easy.

Some of the more interesting states include the “No-Ship” states like Montana, Utah, South Dakota, Massachusetts etc etc.  All in all there are 12 states which either have a permit requirement for their citizens, or have a law which sets a limit to the amount of wine an individual can have shipped.  The problem with states like that (Hello Massachusetts!) is that it is a felony if you are the wine club or winery that goes over the limit and there is no way to know where the consumer is in regards to the limit.

Frankly it’s a mess and I have a hard time understanding the logic behind such a law, especially when FedEx, UPS and USPS all require someone over the age of 21 to sign for each shipment.  I understand the concern over underage drinking, but can’t you make the same argument against the sale of alcohol at your local liquor store or grocery store?

Ok.  So enough with the wo-is-me I’m starting a business for today.  Great news, my business partner Matt has two appointments with Napa wineries Thursday of this week.  With any luck we’ll get some photos

One of the questions I get from friends when I discuss starting this wine venture is: Why do you find wine so interesting? Why not beer, or food or gardening, or vodka?

To start, I love wine. I’m not the most knowledgeable person right now, but I know what I like and I am starting to have a really, really good idea what everyone else likes as well.

I also find it interesting that wine, unlike most everything else is bought almost exclusively based on price and other people’s opinions. Very rarely does anyone try a wine, just to try it. Most casual wine drinkers(even those with big budgets fall into a couple of different catagories, since everyone purchases in some way based on price.

Price:

1) Hey, if it’s under $10(or $20, or $100 based on your income) and the bottle sucks, I can throw it down the drain and not worry about it.

2) Some people will shop at wine stores looking for the best rated bottle under $20(Yes, this is me). Robert Parker 92 points for $19.95, ok sounds good!

The interesting thing about this type of shopping is that we sometimes miss out on, or easily forget bottles or wineries which we peculiarly like. A great example of this is my wife. When she was first out of college and starting to enjoy decent wine we found a bottle of Merlot that we both quite liked. It is from Rutherford Hill winery in Napa. It’s typically scored in the 86-90 range from Wine Spectator and Robert Parker, not something which is considered a “Great” bottle of wine, but something you can serve at dinner on Wednesday night and everyone will be happy with it.

Every so often we’ll come back to it and remember that although it isn’t the highest rated bottle, but hey we like it a lot.

Wine to me should be something that is enjoyed and everyone has different tastes. Part of the enjoyment to me is learning about your palate and learning the types of wines that you enjoy and how those wines can be combined with food to make them taste even better.

One of our goals is to help people prepare 5 star meals at home using our wine selections for the price of eating a 2 star meal.

Well as WordPress says…..Welcome to my blog.

To get some stuff out of the way…..My name is Mark(I’m 29 by the way) and I’m one of the two founders of…….well that’s part of the problem actually.

I’m starting a wine company with my brother in law Matt(he’s 37).Yeah, yeah I know starting a business in this bad economy can’t be a good idea right? Consumer spending continues to well…..suck and high end wine is certainly a luxery item. Well seeing how my real estate venture has imploded completely I have plenty of time on my hands, Matt has some time on his hands right now as well…..that’s not my story to tell though.

I think this blog could be interesting for people on a couple of levels, to start it will give me a chance to organize my thoughts about the entire process, I hope it can spur conversation about wine, business and family which are 3 of my favorite things….well at least 2 of them are at all times. I also hope it can help potential customers get to know me and maybe even Matt at some point.

Why get to know me? To start I’m more of a shy guy then my business partner/brother in law in person. Meet us on Twitter, Facebook or in person and I guarantee you’ll feel like you’ve known Matt longer….unless you’ve read my blog for some time.

Ok so I mentioned that we don’t have a business name yet…..very true. We’ve used “California Wine Shippers” when we’ve had to give one to talk to people. Honestly I’m not a big fan on a couple of levels. First, it doesn’t sound special. Secondly I think we need “Wine Club” as part of the title if a US based wine club is going to be our first major business operation because of search engine optimization(SEO)…..yes I work on SEO some on a daily basis.

So what’s the plan for us? We want to start offering high end wine to customers that cannot necessarily find high end wine where they live, or they don’t want to spend the time to sort out what actually is high end wine…..buying wine simply on price is usually a losing proposition. Plus, we’ve both had some bad experiences with some of the bigger wine clubs out there. All of them start out offering decent stuff, but profit margin always seems to get in the way at some point. Stopping that from happening is a challenge for a different time….having tons of monthly paying wine club members would be a nice problem to have.

I should mention we both live in California, so Napa, Sonoma and Central Coast(i.e. Paso Robles, Santa Barbara) wineries will be our first features, although we hope to be successful enough to move beyond those at some point soon.

Without giving away our entire business plan let’s say we have some rather unique ideas that haven’t(and won’t) be discussed here until they come to fuition.

Well I think that is probably enough to start. We hope you’ll continue to come back for more information until the launch of our official site and wine club. If you have any questions or suggestions…..please contact me!

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