There are a number of issues that need to be seriously considered when doing a wine release using an online direct shipping model.
1. Allocation of Product to Direct Shipping vs. Other Distribution Methods
Allocating much of your wine production to direct shipping is tempting because you obviously make more money selling it that way and have direct control over the winery to consumer relationship. However, you are putting all of your “eggs in one basket” if you do this. If your wine is a “cult” wine or if there is really strong demand for your product, it may work and you may sell out your production quickly with greater profits. But if you have an off production year, get negative press over a release, or have internal sales or shipping problems then you may see a slump in demand and have no other distribution channels to fall back on. I think that it is important, even with “cult” wines, to maintain a broader scope of distribution, particularly restaurants and private retail stores. This will cement the reputation of your brand and provide backup distribution methods. Some of the up and coming BC “cult” wine brands are doing this.
2. Method of Release
Most BC wineries that are using direct shipping methods are still using the most basic technology to do so. Normally, this consists of the implementation of a simple shopping cart system such that any potential buyers are directed to an online store where they can simply order what they want (sometimes with bottle limits). Usually, the winery will start the process by sending out bulk emails to their mailing list inviting customers to order. A further refinement of this system is to have scheduled release dates for wines which are publicized in advance and which are intended to build pent up demand and momentum for the actual release.
The advantage of this is that it is simple. The technology is easy to get and it is easy to implement.
However, there are a number of serious disadvantages. You may face a stampede of orders. This can cause slow server response or a crash of the system (with consequent customer frustration). If demand significantly exceeds your supply, you may also sell out very quickly (good for the bank account) but have a lot of unhappy customers. Worse still, a basic system does not prioritize your customers by purchase history so you may actually end up selling a lot of wine to first-time buyers or even resellers and leaving your best customers in the lurch. It’s not good when somebody who has bought every vintage from day one ends up not getting any wine on your release date because he was out for coffee when you sent the release email. I wouldn’t want to take too many of those calls.
A more sophisticated system is a much better tool for long term customer satisfaction. It will rank your customers by purchase history, offering greater allocations and earlier purchase times to your best customers. The next tier of customers will then be served and so on until you reach the newbies who will get a smaller allocation of what is left. These systems also work really well if you have or are thinking of having a wine club. I strongly recommend that wineries adopt this approach if you are thinking about doing more direct shipping. There are a number of options for implementation. Your customers will be happier, your staff will be happier and you will make more money.