Amazon Pours Money into Net Wine Sales

Online giant Amazon.com, which has already invested $30 million (US$) in California-based Internet startup WineShopper.com, announced Tuesday that it has forged a partnership with the newly-launched e-tailer.

WineShopper.com currently serves customers only in California, but plans to expand its coverage across the United States. The company intends to reach between 70 and 80 percent of the U.S. market by the 2000 holiday season.

While there are no immediate plans to add a wine store to the Amazon site, WineShopper.com told the E-Commerce Times that “Details are being discussed and it’s a definite possibility over time.”

eBay Nixes Spirits

The sale of alcohol has long been a thorny issue for e-commerce companies. In fact, Amazon competitor eBay discontinued such listings last year, citing “the many difficulties inherent in Internet alcohol sales.”

Donald Coe, Vice President of Channel Development for WineShopper.com, told the E-Commerce Times that WineShopper combats those difficulties by relying upon a “very complex compliance system” that enforces all requirements for the legal sale of alcohol “down to the county and municipal level.”

WineShopper.com does not hold a license to sell wine, but rather acts as a liaison to locate wines for customers and arrange shipment through licensed retailers. According to WineShopper.com, more than 550 wineries, importers and suppliers — along with 250 wholesalers — have agreed to participate in the WineShopper.com system.

Social Responsibility

Amid controversy over the ease with which minors can purchase alcohol online, WineSeller.com has implemented an “integrity system” in an effort to promote social responsibility.

“Our systems were constructed to avoid problems with deliveries,” Coe said. He added that orders placed through WineSeller.com arrive via shipping services such as UPS, in neon green packages that are prominently identified as wine — not plain brown boxes. The drivers are instructed to obtain proof of age from customers.

“This is a special product. It can’t be handled like any other product,” Coe said.

However, WineSeller.com is not directly responsible for making sure that recipients show valid identification. According to Coe, “All shipments go from the wholesalers to the retailers, and the retailers bear the ultimate responsibility for making sure that proper identification is produced at the time of delivery. If there is no one home, the consumer must go to the retailer to pick up the order.”

National Rollout Ahead

Thirty-two states have already cleared the WineShopper.com model for operation in their states, and the company plans to expand its operations on a state-by-state basis.

WineShopper.com founder and CEO Peter Sisson said, “We begin with California consumers — 18 percent of the nation’s wine-consuming public — who are now able to access more than 1,400 wines, including the most popular wines in distribution, as well as rare wines previously available only at winery tasting rooms.”

WineShopper.com also provides content though partnership agreements with Wine Spectator, WineToday.com, The New York Times on the Web, Boston.com, Wine & Spirits, Food & Wine, and Connoisseurs’ Guide to California Wine.

In addition to Amazon’s $30 million, the company has received $46 million in a funding round led by Kleiner Perkins Caufield & Byers.