Saturday, Jun 25, 2016
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Amazon.com tapping into wine market, offers 1,000 domestics

SEATTLE — Amazon.com Inc. is uncorking a new venture.

The online retail giant launched a wine marketplace on its Web site last week, with more than 1,000 domestic brands available.

For now, wines will be shipped only to a dozen states and the District of Columbia. Bottle prices range from less than $10 to more than $100; shipping costs $9.99 for up to six bottles of the same wine. Because the wines will be shipped from individual wineries, buyers won’t be able to combine bottles from different labels to save on delivery costs.

Amazon will merely serve as the middleman for wineries to sell their products; the company won’t be storing wines in its massive distribution centers or shipping the bottles directly.

“It’s a bit of a if-you-build-it-they-will-come approach to business, which in my experience seldom works effectively,” said Rob McMillan, executive vice president and founder of the wine division at Silicon Valley Bank. That said, “if they’re successful, it’s going to be hugely beneficial for the wine business — and the consumer, for that matter.”

But selling wine is very different from selling everyday consumer products, and Amazon has “a lot to learn,” Mr. McMillan added. To court discerning wine aficionados and casual drinkers, the company needs to offer a diverse but curated selection of wines and provide up-to-date, comprehensive tasting notes because shoppers don’t want to be inundated with pages and pages of wine listings.

Winemakers and industry groups cheered the news, saying Amazon’s reputation and scale would help get the word out about buying wine online. Currently, only about 2 percent of wine purchases are made via the Internet, said Rich Bergsund, chief executive of wine e-tailer Wine.com.

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