Selling Wine Online: Ecommerce vs Marketplace
The recent situation brought to light by Covid has highlighted the tendency of wine producers to baste their own e-commerce to be able to sell wine online. However, this maneuver - precisely due to the fact that it hides various pitfalls - has not always returned the desired results.
There are not rare cases in which the poor winegrower on duty has fallen into the lure of the first marketing agency or web house on duty to be entrusted with the creation of his e-commerce, without having received a correct analysis of his market and his customers. . In other words, without having received the advice of professionals of the wine sector on the convenience or otherwise and on the strategy.
E-commerce is not the only option a winegrower has to be able to sell his wine online
Alongside e-commerce, marketplaces and shops are positioned on social networks (the latter actually still a bit far from being able to represent a real space for purchasing, at least in Italy).
E-commerce or marketplace? Which is convenient?
As we said before, a sure answer not supported by an analysis risks emulating the error already narrated.
Each winery is a world unto itself and the positive outcome of this investment is also influenced by the market, consumer habits, competition, the distribution system and its geographical positioning. Before establishing a priori which of the two options can make a profit we must start from the analysis.
To make the investment in the creation of an online shop profitable, you must first and foremost learn about online platforms, their strengths and weaknesses. In parallel to this, the owner of the company will have to carry out a sort of business plan assuming:
- Because people out there should shop on his site
- How many orders per month would you receive
- How much would the average receipt be?
- What would be the monthly expenses and costs
- After how many bottles sold it would break even
The thing that the owner of the winery must keep in mind is that in the absence of strong loyalty, an already consolidated returning clientele and a wide reputation, it is difficult to register orders to a cold public, that is, who does not know the production reality and products.
We must also consider that what is being sold is still a monoreference, when we know that the average customer today loves to vary and try new things.
Therefore it will be imperative to consolidate one solid promotion strategy aimed at achieving medium-long term objectives.
Marketplace for wine sales - I Advantages of the Wine Marketplace
Marketplaces are online platforms where winery owners sell products for a fee fees and monthly fees. The most used marketplaces are the vertical ones (single type of product) and intended for B2C sales. Among the main advantages that these portals offer we find:
- strong positioning on the SERP, or on google search results
- Wide target audience for wine sales
- Historical and authority of the platform
- They are organized like a search engine
- Expansion of the public internationally
Online you can find the perfect marketplace according to your needs, and given the listed advantages, any doubts about the usefulness or otherwise of selling your own wines on a marketplace it should be wiped out by now. But…
But remember that a marketplace is not your home and to be able to see their wines hosted on the platform, the company will evaluate the need or not to keep a wine like yours in the catalog. The winery must therefore be able to provide production, delivery and procurement standards.
Speaking therefore of negative aspects related to the sale of wine on marketplaces we find:
- Costs: subscriptions, fees, advertising
- Direct competition: together with your wines there will be those of other companies.
- Lack of user profiling: you will not receive the data of the buyers of your wine, such as email and telephone number, therefore no possibility of retargeting.
For example, selling on Amazon gives you the opportunity to also sell to various foreign sites. For a wine entrepreneur this means to be able to enter the searches of international buyers, difficult to reach with an own monolingual e-commerce without the push to better appear in organic or sponsored searches.
If you opt for this choice, however, you will first have to check your marginality. Consider that Amazon is asking at least 15% on sales. And if you have to provide for the shipping costs you have to evaluate if the sale is economically sustainable and if the potential customer is not discouraged to buy because of the shipping costs that he will have to incur.
You can also opt for prime delivery, entrusting Amazon warehouses with a stock of your products that will be shipped by operators on occasion. But keep in mind that this rental service also has costs and your wines may not be stored properly pending sale.
E-commerce: what they are, costs and advantages for selling wine
With e-commerce, the situation changes a bit on several fronts: the company has direct control over its wines (number of photos, data sheet, text, video, etc.), payments, data and logistics that will have to entrust to a courier or to a third party service, in the event that it does not have an economically advantageous distribution by its own means.
In these terms, therefore, comparing the contracts and the price list of different couriers to manage the shipments of your wine is a fundamental point for selling wine online.
Selling with an e-commerce does not mean being free from the close competition that you can have on a marketplace.
In fact, in order to earn the trust of your customers as well as sales, you will have to reach potential customers, and to do so you will have to basically work in two ways:
in an organic way with on and offline notoriety and Seo (digital practices to index your site by search engines and better place it among the search results). If your wine brand is known and sought after, people will mainly type the direct name to end up on your site. Otherwise the second practice takes over.
In a sponsored way, thanks to Ads on the search engine and on social networks.
Of course this is not free and in addition to the budget to be made available for the campaigns, you will have to consider a cost for the advertiser who will be in charge of implementing. the digital marketing strategy to sell wine and the structure.
In this regard, remember to consult also the 5 elements that should not be missing from an e-commerce wine.
Analysis of the positive and negative aspects of E-commerce to sell wine
Surely the great value and power of own e-commerce lies in the possibility of collecting customer data and carrying out targeted marketing actions.
Not only that, but even in the absence of email and phone number you can still perform actions, for example on abandoned carts thanks to the tracking pixel. Of course, this too is not automatic and free, and if you don't know anything about digital marketing it's better if you leave it to a consultant.
Among the costs that you will have to consider to start an e-commerce there are the costs for the web agency that creates the site for you and the costs for maintaining the server and the domain at the hosting.
It will also be necessary to perform a minimum of branding to create the desired image of a product or company in the mind of the consumer.
You must also consider whether you will be able to independently manage your e-commerce for all the tasks it requires (receiving orders, logistics, promotion, communication, image, customer care) or if you will need additional staff.
When to choose e-commerce to sell wine
E-commerce proves to be the ideal choice for those with an authoritative and well-known business at the offline level, since it could facilitate the achievement of a high profit margin. As we have seen, opening an e-commerce involves high and constant costs, therefore the expense - to be sustainable - needs to be accompanied by achievable medium - long term goals. If you opt for the marketplace instead, remember that this requires annual fees and percentages on the products sold.
Ecommerce vs Marketplace: conclusion
The web offers varied and highly customizable solutions to start an online business. E-commerce and marketplaces involve high costs, albeit in different areas. Each of the two solutions can bring benefits and drawbacks since there is no solution definitive.
The ideal solution comes fromanalyses, from testing and from entrepreneurial mindset. As mentioned, it is essential to draw up a business plan by entering expense items, depreciation and time in which the costs must be covered.