DISCUSSION TOPIC: Amazon Gets Ready to Shake Up Wine Business – 3/5/08
It completely changed the way millions think about buying books and now Amazon.com is looking to do the same thing with wine. According to a report by the Financial Times, Amazon is poised to enter the wine retailing business despite numerous regulatory obstacles and the experience of other merchants who followed a similar path and failed. Right off the bat, Amazon will find itself limited by laws that only permit it to ship wine to 26 states across the country. In 10 states, the retailer will need to open wine distribution centers so it can comply with laws requiring it to purchase stock from licensed wholesalers.
Discussion questions: What will Amazon’s entry mean for wine retailing in the U.S.? What will Amazon need to do if it is to be successful in this venture? What will other merchants need to do to address this new competitive challenge from Jeff Bezos and company?
I have direct experience with attempting to set up wine sales in stores in 36 states. I can tell you it is not easy – but it is not impossible. The firm I was with ultimately backed off moving forward, but not because it couldn’t be done. We were working with an excellent consultant who would have paved the way for our efforts. A focused effort in the top yielding states could make the venture worthwhile for Amazon. The regulatory issues will probably never be overcome in all 50 states, but enough change will occur to make the business viable for those that figure it out. Wine consumption continues to grow and more and more consumers are open to internet wine purchasing. I think Jeff Bezos et al know what they are doing. It will be fun to watch!
Mike Osorio, your Dare to be Contagious! TM strategist
GO TO THE FULL DISCUSSION AT RETAILWIRE.COM:
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