Online Wine Pioneer Turns 25

A quarter century is a long time in any business, so imagine how it must feel to celebrate that milestone in the notoriously ephemeral world of e-commerce.

As a fellow wine-specialist website born out of the ’90s internet boom, Wine-Searcher felt it appropriate to sit down with Russ Mann, CEO of online wine auction house WineBid, to celebrate its 25th anniversary on the scene.

WineBid was founded in 1996 by Chuck Parsons whose initial love lay in auto racing. The company began, like many a ’90s internet start-up, in the back of a garage in Chicago with two employees and Parson’s own sizeable 10,000-bottle collection of wine. At the same time, internet giants Amazon and eBay were already on the march.

Eventually, WineBid outgrew the garage and the company moved to an office in Napa, before expanding even further with representatives now based in Hong Kong. With headquarters now firmly stationed in Seattle, the company is now owned by Third Leaf Partners – a global luxury hospitality investment company – WineBid continues to deliver weekly online auctions of 5000 or more wines with buyers and sellers all over the globe.

What was the wine business like in 1995?

Well, 1995 through early 2000 was a big time on the internet in general. As I often joke, this little bookseller [Amazon] up in Seattle got started, this little garage sale company [eBay] in San Jose got started. WineBid got started, Wine.com got started, and obviously Wine-Searcher got started – three of the greatest names in online wine.

I think Wine.com was the very first big online retailer. WineBid was the very first online wine auction company before people even thought about or even figured you could be trading wine online, WineBid was figuring it out.

WineBid was started in Chicago by an entrepreneur and racecar driver, who loved wine. And he wanted to be able to find wine and sell wine to his friends. He had a $10,000 bottle collection on his own.

He raised some venture capital money – as people did back then – and then he expanded a little too quickly. So then the company was acquired by a private equity group of telecom entrepreneurs who were based in Seattle.

So they were tech people that appreciated the tech, but they were also big wine aficionados. They moved it to Seattle and Napa, and they installed a new CEO back then, who came out of the wine cork business.

What does WineBid do?

Wine Bid was the very first place you could sell and buy wine online, and we need to emphasize the sell part. There’re so many regulations around selling wine. And if you, a private individual in the United States, are not really legally allowed to sell wine, WineBid makes it legal, ethical, authenticated, which is very important.

We were the first to introduce the idea of weekly auctions, as opposed to once a quarter or once a month, like the big brick-and-mortar folks do. So, we started going weekly, every Sunday night at 7pm Pacific time.

We were the very first to have the idea of detailed inspection and provenance notes for every bottle, or for nearly every bottle. We’re the first to have, and probably still the only, to have high resolution photos for nearly every bottle individually. We don’t use stock photos, we don’t use community source photos, we use high-rez photos so you can examine and see the wine up close.

Last year, we introduced 360 bottle shots for all of the high value wines, we’re the only site that you can spin them, zoom in, see the fill levels, see all of that.

We’ve also had some innovations and helping people pick and pack which wines. If they buy a lot of wine, they could be – they could have 10 cases of different wines at Wine Bid, and maybe they only want to send two of them, but they want to send different individual bottles. We introduced some technology that, I think, is even better than Amazon, that lets you pick and pick and choose which bottles you want to send when, on what days, or if you want to pick it up in the warehouse.

How has buying wine online evolved?

Globally, wine is the single most difficult product to do on e-commerce especially good, expensive vintage wine. It’s big, it comes in cases, it’s heavy, it’s fragile, it’s regulated and temperature-controlled. Even an expensive couch – it’s big, it’s heavy – or glassware – it’s fragile – but how many things are big, heavy, fragile, temperature controlled and in some places regulated?

In almost every other category of things that are sold online, except for food and beverage, most of them have had 20 to 30 percent penetration. 30 percent plus of all books are sold online, electronics, TVs, phones, all of these categories are now 20 to 30 percent online.

Wine is $325 billion globally and last year or two years ago, only $10 billion was bought online, only 3 percent of all wine was bought online.

So food and beverage, overall, is 10 years behind fashion, electronics, everything else in the world. They call it lift and shift, lift and shift from brick and mortar to digital and delivery.

Online wine could grow 10 percent or 10 fold, and just be catching up to the other categories of e-commerce. You look at the pandemic accelerating people buying wine, no longer going to the store, getting comfortable with having wine delivered.

How do US shipping laws affect WineBid?

In the past year, in the US, a national level law was passed around called Wayfair. Before you wouldn’t necessarily have to pay taxes on something if you bought it online, and now they’ve said you have to pay taxes in whatever state you’re in where you’re going to receive it. So that’s been an interesting wrinkle.

© WineBid
| The company has had to be agile to keep ahead of ocnstantly changing regulations.

The alcohol shipping laws and alcohol tax laws are somewhat different than the regular e-commerce, tax and shipping laws, so it definitely makes things interesting. But what I can tell you is that all of our buyers are able to get their wine, even if they need to pick it up in Napa. There are always ways to get wine to people and only about 70 percent of our buyers are in the US, more than 30 percent are global.

We have a huge Asian buyer base and a huge European buyer base. A lot of the upper end buyers buying the more expensive stuff are overseas, and so it’s less impactful to our business than you might think, on that front.

How has demand changed over the years?

We had 400 appellations of wine, and 1400 producers in the early 2000s. This most recent year, we had over 1250 different appellations, as well as 8300 different producers and over 500,000 unique wines in the database that we’ve seen.

There are more new wineries, more different appellations popping up. WineBid has seen more wines come through, and more people are trading more different kinds of wines before than ever before.

I think in the early days of wine auctions and online wine, people wanted the blue chips, they wanted the French, the Bordeaux and the Burgundies, and it was always $500 bottle and up and normally cases. WineBid introduced the concept of bidding on single bottles. WineBid brought that you can buy a $100 bottle or a $50 bottle, we’ve got bottles from $10 to $10,000.

So in the earliest days of WineBid, and online wine, I think, most people think of wine auctions as, I hate to say it, old white guys buying and selling expensive grape juice at some of the brick-and-mortar places in London, or New York or whatever.

Now we see a much broader range. We see younger people, we see women, we see people of diversity. In the earlier days, we had about 20,000 people registered, now we have more than 150,000 people registered. In the early days, it was mostly US, now we have a truly global audience with a massive Asian buyer base in the past seven years. As the internet’s become more global, people have gotten more comfortable with buying and selling wine online. And then the pandemic of course, really accelerated that.

So, it’s no longer just the stereotypical older wealthy male seller selling to a younger, wealthy male seller.

Are there new buying habits?

WineBid had two kind of major audiences – the buy-and-hold looking for the upper-end, the buy-and-drink for the lower-end. But prior to the pandemic – and, interestingly, I’m still seeing it evolve – I would call it the buy-and-share crowd. Instead of buy-and-hold for me, or buy-and-drink for me, it’s “I’m gonna buy a really unique, thoughtful gift of a birthday wine, or an anniversary wine or a company founding wine, and I’m gonna buy it, not for me to drink, but for me to share it with someone else”.

I think it’s indicative of a younger crowd and an even more social crowd and a globally social crowd. It’s not just about buying things, it’s about having experiences and about sharing experiences. I think the Millennials and the younger folks are more in tune with sharing than just having.

What’s hot?

In the past 10 years, there’s been a globalization of wine and producers like South African wines and New World wines, New Zealand wines, Southern California wines, Texas wines all over – everybody’s got their own appellation.

A little trend like the Jura has become super-hot. A couple of years ago after that Somm TV series all sudden, Beaujolais became hot because one of the somms talks about how Beaujolais can rival the best Bordeaux.

We’ve seen some spiking interest in the Northern Rhône and Châteauneuf-du-Pape. The Washington and Oregon wines are starting to come up in the ratings as the older wineries are now they’re hitting their 20, 30, 40 year mark.

What changes has the pandemic brought?

Seven months of pandemic has accelerated seven years, maybe 15 months has accelerated 15 years. Definitely, we’ve seen a huge acceleration and broadening of younger buyers, we’ve seen a lot more unique wines come to market; because the sellers, they’re all at home too. People are still trading and buying and selling for all their various reasons.

Climate change is really impacting everybody in ways you wouldn’t even think about. Our warehouses in Napa – we’re not near the fires –  but a couple of our personnel team members had family that were impacted. We don’t work directly with all the wineries but we feel for them as we’re part of that community.

All the French growers,we kind of feel the tail end of it when we hear there’s going to be a bad harvest, or en primeur is bad because of the frost, or the floods in Germany. That actually constricts some of the future supply chain, which then gets all kinds of weird dynamics for the American buyer and seller market.

What’s the future for WineBid?

Wine Bid has survived the internet bubble of the 2000s, survived the internet crash, survived the big Bordeaux crash. We weren’t involved but there was a bit of dirty laundry in the wine auction world back in the authenticity days, but WineBid was never part of that. So, number one is just making it to 25 years when so many other why other ecommerce companies didn’t.

Again I can’t take credit, [but] I’m really proud of all the technology innovation, because I’m a geek, I’m a technology guy first and the wine guy second. I’m really proud of the technology innovations around the tech and the authenticity.

We’re trying to be like a 25-year-old start-up. Jeff Bezos, I don’t know if you like him or you don’t like him, but he does have that thing called Day Zero mentality – approach every day like it’s your first day on the job with all the new fresh ideas.

That’s what we’re really celebrating on, on our 25th anniversary, it’s not about exclusivity and privilege, it’s about inclusivity and access for everyone. That’s what the internet’s done, and that’s what we’re trying to do in the wine category.