The Oenophiliac

Bringing you stories from the world of wine and beer.

Naked Wines looks to open up UK with new low cost entry for winemakers

Winemakers anywhere in the world can now sell their wines in the UK at virtually zero cost thanks to a new service from Naked Wines.

The Naked Market Forum promises to cut out most of the usual agency, listing and marketing fees by posting up wines online, which customers, be they consumers or the trade, can then get delivered direct by the producer. In turn Naked Wines will take a 10% commission on the selling price.

Rowan Gormley, Naked Wine’s founder, believes the new service opens up the fiercely competitive UK market to wineries that previously could not afford to sell their wines here.

It also gives producers frustrated by the increasingly high costs and low margin returns in the UK a new route to service customers direct from their winery.

Gormley explained: “It is effectively taking agents, and arguably ourselves, out of the process. If you are a winemaker getting beaten up over price from retail buyers then you can take all that margin out.”

He said the system will run alongside Naked Wines more traditional model where it selects the wines from which customers can choose. “The winemaker can now do that directly,” he explained.

He added: “Any winemaker in the world can pitch to our customers. They can then pay what they think it is worth. And we take a 10% margin,” he added.

“There are no agency or management fees. There are no listing or gondola end fees. It means winemakers no longer need to use retailers in the UK.”

The idea came to Gormley because “19 out of every 20 enquiries we get come from winemakers who can’t find a profitable route to market in the UK’.

“This is a big opportunity for winemakers who are not in the UK.”

Gormley said the system will be totally transparent. Customers will be able to see the FOB price from the supplier, then see the level of duty, VAT and shipping costs added and Naked’s 10% fee. They then pay the final amount.

Wineries that sign up to the scheme will either be able to put up prices for individual bottles or cases or have a special promotional fee if enough Naked customers come on board to pay for the wine at a given fee.

Gormley, explained: “A winery can be selling a wine at £20 a bottle, but say if 1,000 customers sign up to do so, we will offer it at £12. If we only get 999 then the deal is off.”

The winemaker, he said, is obliged to get the wine to the consumer at the price displayed.

The new service, which is being launched later today, May 16, will be given a live trial at this week’s London International Wine Fair. Fifty of Naked Wine’s customers will be attending the fair and then choosing wines from any producer at the show which they would like to see on the new forum. Naked Wines will then approach the selected producers, whether they are in existing partnerships, and see if they would like to trial selling their wines on the new forum.

He said the forum could equally be used by the trade to offer slow selling lines from their stocks, or by suppliers frustrated with their current level of sales from their current route to market. “Or it could be a private individual who wants to put up their cellar for sale.”

He hopes the new forum will not only help increase the 150,000 current number of Naked Wine customers, but widen the breadth of winemakers it is able to work with.

He said schemes like this are essential if the UK wine trade is not going to “repeat the mistakes of the past”.

“Currently people are spending a lot of money which is not helping either side, and we are looking to reverse that process and get the customer and winemaker to do business together. We can take a lot of the costs out of the chain in the process.”

He conceded: “If we bring winemakers and consumers closer together, both financially and personally then the more we can grow and the more profitable we will be.”

Naked Wines is currently selling on average 10,000 bottles of wine a day, said Gormley, with 120,000 of its 150,000 customer having bought wine in the last month. Whilst it carries stocks for the vast majority of its transactions, 18% of deals are now done directly with wineries. The Naked Market Place will be 100% direct.

Story by Richard Siddle.

Courtesy of Harpers Wine and Spirit Trades Review.

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This entry was posted on May 16, 2011 by in News..

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