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.

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