UK based Wineowners.com sprung to life from the need of wine collectors for a place where they can track their wine portfolios, have up to date information and also trade their wines. In Wineowners.com own words: “The platform is a companion to your life in wine, or if you prefer, your journey through wine.”
Wineowners.com provides a robust peer-to-peer trading system, in which it serves as the settlement mechanism between parties, orders inspections and facilitates the payments and shipments. Listing wines is free and the seller’s commission ranges from 4% to 6.5%.
Although based in the UK, wine collectors from over 19 countries trade on the platform. As the UK is considered the center of the world fine wine trade, it may be a have more concentrated demand than most places.
We interviewed Wineowners.com’s CEO, Nick Martin to gain more insight into their system.
Sell Wine Guide: Can you explain a bit about your platform? Is it primarily an inventory management system?
Nick Martin, WineOwners.com: The platform is a companion to your life in wine, or if you prefer, your journey through wine. As such it helps you discover wine, catalogue and organize a collection or can help inform you as you embark upon building one, reshaping one or simply appreciating what you have already. So yes, inventory management is a fundamental purpose. But wine inventory management without rich and accurate content is dull and meets a limited need, so we sought to make create a list platform that would immediately provide a wealth of insights about your wine collection, about the people who made the wines, the market and what key influencers think of your wines.
We also provide tools for those who want to do analysis, such as comparative evaluation of wine options.
Sell Wine Guide: Your trade platform is intriguing; does WineOwners.com physically handle the wine at any point?
Nick Martin: For us, the trading exchange element of the platform was necessary to help wine enthusiasts take control of the buying and selling process in the secondary market. Making it simple, transparent and safe for them to self-direct. It's part of the process for most people, so not including it would have felt like an omission.
As part of running an assured trading process we act as the settlement mechanism, handle the hand offs between counterparties, and procure inspection reports where buyers (or sellers) request them (which is a right of each member who participates). So yes, we handle wine between the counterparties albeit briefly. However we never actually own it: legally we act as an agent between undisclosed parties.
Sell Wine Guide: Is the trade platform friendly to first time and one time only sellers? (some people who are selling wine might not be wine enthusiasts and have limited knowledge about their wine, pricing etc.)
Nick Martin: It's logical to use, and very informative, as long as members are familiar with the model of a two sided market, with the ability to buy at the proposed selling price, or place a bid to buy at a price the buyer feels they're prepared to pay. Most first timers are excited by being part of a peer to peer experience however, and with the first trade under their belts, they love the bidding and buying process.
Sell Wine Guide: Do wine retailers buy wine on your platform?
Nick Martin: Yes they do, after all, there's nothing like private clients with wines typically bought at first release for provenance and the wine trade value being able to buy in this way, though they are competing with private collectors so sought after wines tend to fetch realistic prices.
Sell Wine Guide: For a first time seller who wants to sell some of his wine, what are the important things he needs to take into account?
Nick Martin: One important 'don't' - if you try to sell the same wine through multiple sales channels, you could be liable for the cost of a trade if you double sell. So pick the channel you want to sell your wine and give that channel a reasonable amount of time to find a buyer. If it's Wine Owners that's chosen obviously we are delighted (and we think sellers realize most value through us due to very low commissions and market liquidity).
Also, take into account that market averages are meaningless. Wines sell when they are priced to around the level of the lowest cluster of offers for sale from reputable merchants, or the point of market liquidity.
Buyers also pay a small commission of 2.5%, roughly 10% of what auction houses charge, but it's worth factoring that small spread into the selling price.
Sell Wine Guide: What are the fees and premiums you charge? Is there a charge for listing wines for sale?
Nick Martin: There's no charge for listing. Seller commissions range from 6.5% to 4% depending on whether the use signs up for a free membership or goes for a premium one.
Sell Wine Guide: I saw that your company offers free cellar review, how does that work?
Nick Martin: A collector sends us the list of their wines, tells us a little bit about their collecting purpose and rationale, and we give free advice about what they may wish to prune and where there are obvious gaps. At the same time we upload their collection into their Wine Owners account, so they immediately see their collection brought to life and can evaluate our suggestions with their own newly-informed perspective.
Sell Wine Guide: Generally speaking are the people who trade Wineowners.com focused on the “regular suspects” of collectible wine or are they open to more obscure choices?
Nick Martin: There's the part of the collection that often doubles up as a store of value and contains the usual suspects, then there's the passion led part of a collection (the prime motivator for starting a collection in the first place in 95% of cases) and that comprises wines from every wine producing region of the world, both well known and obscure. Most wine that is traded tends to be from the world's most well known, blue chip, wine producing regions.
Sell Wine Guide: What are the typical bottle price ranges that get sold Wineowners.com?
Nick Martin: Bottles on our trading exchange sell in the very wide range of $35-$2,500 per bottle (equivalent in UK Pound Sterling).
Sell Wine Guide: Any additional tips for prospective sellers?
Nick Martin: On expensive bottles Provenance matters so request an inspection report with photos so sellers can see what's offered. It saves the buyers the cost of procuring their own report and increases the chance of selling quickly.
There's value in keeping investment grade wine in professional storage, which makes the wine more desirable and simplifies transfer of ownership and delivery. Because of this we only sell wine if it's in a proper wine warehouse. If it's stored at home it still has to be transferred into professional storage where high quality, back lit photos, can be taken. We take the pot luck element out of buying secondary wine online, which is what differentiates us profoundly from options such as eBay.