Wine shipping cost comments from a cancelled Wine Club member survey

Early this year, we made a point to reach out to our canceled VINsider Wine Club members and ask them for some feedback on what we could be doing better.  I'm not worried overall about our club members; our median tenure of a club member is about 3.5 years, more than double the industry average.  Still, I was sure that we could learn something from the former members who have moved on.

We're still receiving dozens of survey responses each day, and we're holding off on rigorous analysis of the data until we have received most of the surveys we expect to get.  I'm sure that these will lead to several additional posts here on the blog.  Still, I've been reading through many of the responses and was surprised to see one item pop up with some frequency.  Several ex-club members have commented that they don't like paying shipping for wine, or that they think that what we're charging for shipping is too much for them.

I was surprised, since we subsidize shipping costs considerably, particularly to the East Coast (where most of the survey respondents who mentioned shipping costs live).  I wonder how often these people have tried sending 40-pound packages second-day air across the country.  We receive good shipping rates from FedEx thanks to our membership in the Wine Institute (about half off FedEx's published rates) but we still pay between $70 and $79 to ship a case of wine to the East Coast, and between $40 and $46 to ship a half-case of wine.  We charge our customers $45 (full case) and $30 (half-case).  In the mountain states (where we charge $25/$35 for half case/full case) we pay $29/$55.  In California, where we use UPS Ground (they guarantee next-day delivery to nearly the entire state, and second-day on a few outlying fringes) we pay $19/$29 (we charge $15/$25).

Yes, we're receiving a higher margin on this wine, since we're selling direct to customers, but we're also providing most of these customers (our wine club members) either a 20% or a 25% discount, and absorbing packaging costs and labor expenses. 

I wonder how other wineries do this.  Many of the customers who mentioned that they felt our shipping prices were high said that other wineries who they ordered from provided very inexpensive shipping (on the order of a $15-$25 per case) or even free shipping.  I can only assume that these wineries must be eating this cost to do more business on the East Coast.

Shipping costs have gone up enormously over the past few years, reflecting the higher costs of gasoline. On of my first conclusions from this survey is that I'm not sure public perceptions have changed along with them.

Comments

[Newtuxedo]

I belong to several wine clubs and order off several mailing lists of wineries in CA and WA state. I think your shipping costs are very much in line with the rest of the market. A number of internet wine retailers will often run discounted or free shipping specials (including some that carry several Tablas Creek varietals), but from what I've seen, wineries rarely do it. And your discounts and monthly offers to VINsider members are great deals.

[Jason Haas]

Thanks for the reality check, Newtuxedo... we're going to try a shipping promotion some month soon (maybe as soon as April, if I can get the systems in place). It will be interesting to see what impact it has. I feel like with all the bad economic news that everyone is hearing day after day, it's worth making a little extra effort to not just be in line with the rest of the market, but out in front.

Thanks for your comment!

-Jason

[MonkuWino]

I'm a member of your VINsider's club and personally feel that your pricing is quite reasonable, including the frieght charges. Of course I live in Southern California so it is only $15 for a shipment. I'm always looking for free shipping but given the weight and packing considerations involved in wine, plus the discounts you provide members on hard-to-find, excellent wines, I feel you are more than fair about it. Really the only thing that bothered me was including the Panoplie in the last shipment since the price is quite a bit over my budget but heck, once in a while I guess I need to splurge. You can bet I'll be saving that bottle for a special occassion!

[Jason Haas]

Thanks, MonkuWino. I've been enjoying your blog posts over the last several months!

The question about the Panoplie is a good one, and one we've struggled with. It probably warrants a post of its own, but here's how we've tried to figure out the best way to handle it.

When we started our wine club, we established it with a flat price of $175 per shipment. Sometimes this worked out to a big discount on the wines' individual prices, but other times (depending on the mix of wines in the shipment) the discount was only around 10%. We didn't think this was really fair.

So, a year into our wine club, we changed the pricing to reflect a 20% discount off the prices of the wines, but let people know it would be between $150 and $190. We always balance the selection of wines so that it stays within this range. We know that there are lots of reasons why our customers are members of our wine club, including the discounts on the wines, free tasting at the winery, special events, and access to unique wines. It has seemed to us that if we can get our club members our very top wine, and do so without going outside our price range, that's a net benefit.

Other wineries address this problem in different ways. Some require you to be a member of their basic club and then also of an elite club to get their best wines. This has always struck me like holding people hostage. And, we don't really have enough high-priced wines to have an elite club, unless we also removed things like the Esprit de Beaucastels from the basic club. And I don't like that idea.

Anyway, we continue to struggle a little with how best to get this great wine into people's hands, and thought that our club members are the most deserving.

Let me know if you're a part of any other club who does this in a creative way.

Thanks for the comment!
-Jason

[MonkuWino]

Thanks for the nice comment about my blog, Jason! And thanks for the response regarding the wine club pricing. I appreciate how Tablas Creek takes so much into consideration with how to structure your club and I feel that thoughtfulness shows. You combine an excellent selection, discounted prices and reasonable shipping, and to me all these factors are important. Thanks again!