By Rick Aristotle Munarriz
March 5, 2008
Will that be a bottle of red or a bottle of white with your copy of The Grapes of Wrath?
Amazon.com (Nasdaq: AMZN) is gearing up to begin selling wine through its online storefront, this morning's Financial Times speculates after unearthing a job opening for a senior wine buyer at the world's leading online retailer.
The eventual hire will be in charge of "the acquisition of a massive new product selection" with the challenge of building an "entirely new selection from the ground up."
Wine may seem like a no-brainer addition -- given the upscale clientele Amazon attracts and its perpetually growing storefront -- but don't pop the cork just yet.
Pimping vino via cyberspace is a thorny issue. Moving libations over state lines is a regulatory challenge. That may explain why Amazon pulled the plug on its 1999 minority stake in WineShopper.com -- which now simply redirects to privately held Wine.com -- even before the dot-com bubble popped.
Amazon doesn't currently sell wine through its site. Even third-party merchants on its site, like Wine.com and Wine Country Gift Baskets, sell merchandise stripped of wine bottles. IAC's (Nasdaq: IACI) Gifts.com sells wine through gift baskets and wine club subscriptions, although the practice is rare beyond the smaller dedicated websites that dare to tangle with state regulators.
If restrictions are easing -- and the Financial Times article points to a 2005 Supreme Court ruling that does just that -- there's plenty at stake if Amazon can get on board and deal with red wines instead of red tape.
The company's push into nonperishable grocery items in bulk nationally and fresh items locally fit right in with cracking into the wine cellar. Between Amazon Prime's membership club, fostering loyalty with subsidized shipping, and the company's breadth spanning across dozens of merchandise categories, it may not be long before someone can subsist exclusively off Amazon's deliveries. Be wary, Costco (Nasdaq: COST) and Safeway (NYSE: SWY). You're in Amazon's crosshairs. One company's wine is another company's whine.
Amazon's push should also boost the prospects of small vineyards like Willamette Valley Vineyards (Nasdaq: WVVI), eager to pitch its Pinot Noir and Chardonnay wines on a grander stage.
It may be just a bottle of wine, but uncorked it represents challenges for Amazon's competitors and opportunities for its prospective suppliers.
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