Online wine dealer, Amazon toast deal
SEATTLE – Amazon.com has launched a partnership with Internet wine retailer Wine.com, hoping to move more wine shoppers online and capitalize on one of the last major retail markets that hasn’t yet made a big splash on the Internet.
“We’re really offering a new way to sell wine in the same way that 10 years ago Amazon offered a new way to sell books,” said George Garrick, chief executive officer of San Francisco-based Wine.com.
The companies did not disclose financial terms of the one-year deal announced Tuesday.
Hundreds of Amazon.com customers have already bought wine through Wine.com, which has had a live link on the Seattle-based e-commerce site since a test run that began in mid-April, said Russ Fradin, Wine.com’s senior vice president of business development.
Unlike its joint ventures with Toysrus.com, Babiesrus.com, Office Depot and Target, Amazon will simply direct traffic to Wine.com’s Web site, which has the technology to make sure orders comply with whatever regulations are on the books in any given state.
Laws that vary from state to state make it hard for wine retailers to reach a national customer base. Wine.com has been working at it since 1998, when it started out as eVineyard, based in Portland.
It did less than $2 million in sales its first full year. A couple of years later, it bought the assets of failed competitor Wine.com, changed its name, and has been growing ever since.
Last year, it shipped wine to more than 100,000 customers in 36 states and Washington, D.C., posting $32 million in sales – up more than 40 percent from the previous year. More than 2 million people visited Wine.com in 2004, buying 14,000 different wines, the company said.
The wine industry does about $22 billion in retail sales nationally, but less than one half of 1 percent of those sales take place online, Garrick said, citing statistics from Internet research firm comScore Media Metrix.
“The reason is because the state regulations are so complex,” he said. “You really can’t sell wine on a national basis. You have to sell it on a state-by-state basis.”