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Amazon pops cork on wine store

Queena Kim Nov 9, 2012
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Amazon pops cork on wine store

Queena Kim Nov 9, 2012
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First books, then electronics, and now, Amazon is getting into wine. It just launched an online wine store with about a 1,000-bottle selection.

Most wineries are cheering Amazon’s entry into the business, says Kathy Harshbarger, the e-commerce manager at the Napa Valley winery Gloria Ferrer.

“Well, I was very excited to see the wine marketplace come together,” says Harshbarger.

Gloria Ferrer sells about 190,000 cases of wine a year. That’s pretty big compared to most wineries in California, but not big enough to give it national name recognition. Harshbarger says that she hopes Amazon, with its 100 million customers, can help change that. “It kind of levels the playing field in a lot of ways, which makes it easier for large and small wineries alike,” she says.

Amazon is starting out by selling to customers in 12 states. But it won’t be storing the wine at its distribution centers, and it’s not shipping it. Instead, the Amazon wine store will play middleman, says Marlow Daniel, a spokeswoman for Coppola Winery, also in Napa. “As a consumer, you’d go to Amazon’s site, you’d buy the wine, you’d check out through Amazon and on the back-end, it would kick the order back to the winery,” Daniel says. The winery would then ship to the customer and give Amazon a cut in sales.

Of course, the big question is: Will Amazon decimate wine stores the way it did book stores? Rob McMillon, the founder of Silicon Valley Bank’s Wine business, is skeptical. Unlike shipping books, shipping alcohol requires cutting through a lot of red tape, he says.  “After the repeal of prohibition, we had effectively 50 different countries with 50 different laws,” McMillon says.

He says even now, while nearly 40 states permit mail-order wine, the laws are so complicated, it’s difficult to say how many states Amazon can actually make money in.

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