Online Wine Coming to Amazon
Amazon (NASDAQ: AMZN) currently sells wine-related items from corkscrews to wine cellars on its site, but after hosting an event on Monday in California that included members of the Napa Valley Vintners Association, the final piece to the puzzle will be added. The event was conducted by executive Derrick Peters, (formerly of Beam (NYSE: BEAM)), and unveiled the online retailer's plans to once again increase it's offerings.
The cost to wineries will be a commission of the sale price (15 percent) and a monthly fee of $40 to register with Amazon.
Previously, Amazon had partnered with a company called New Vine Logistics, but the relationship dissolved when New Vine ceased operations because of financial problems.
As a result, companies like Woot.com, Wine.com and 67wine.com have captured the online wine shopping experience. Naturally, the benefit to Amazon will be sourcing all of these wine establishments, along with independent wineries and store owners across the country.
The online wine market makes up less than one percent of wine sales, which Amazon aims to change. Though not licensed to ship in all states, Amazon will still have the largest online wine retailer presence. The company's future sales may change the status of alcohol shipments to states such as Massachusetts, where alcoholic deliveries are currently prohibited. Minors should not get too excited about the online wine marketplace, as deliveries will only be signed over to consumers 21 years of age and older.
Once again, Amazon has offered another path to one-stop shopping. Analysts remain comforted by the company's track record in the last quarter, as Amazon's net shipping cost was $585 million which equated to 4.6 percent of revenues. Pre-market, shares are down 0.53 percent, yet up 48.23 percent year-to-date. Despite the event Monday, shares have dipped 1.62 percent, but as we are rapidly approaching the 2012 holiday season we can expect share strength in Amazon as one of the most well-established triple digit stocks.
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