Sunday, February 13, 2011

Double Secret Liquidation

Interesting news from the world of wine economics, one of our niche areas of interest on this blog (actually the intersection of 2 niche areas).  I reported a while ago about a strange trend, how suddenly every organization was contacting me with attempts to sell discounted batches of wine in bulk.  From the Napa Valley Register comes this story about a related movement by high priced wineries towards using "flash" sites to offload their extra product seemingly under the radar (in this case, "flash" refers not to the programming language necessarily but the short term nature of the offered sales).

I'm familiar with one of these sites, Wine Woot, which I check daily but have only ever purchased from on one occasion (ironically not for wine but for a wine related poster).  Apparently there is a stigma in the minds of wine producers against offloading their wares to discount chains like Costco or Trader Joe's.  The fear is that these discount shipments will be spotted by wine club members and others who are used to paying higher prices for these products, and thus drive down their brand value.  So what sites like Wine Woot allow them to do is sneak a bunch of product out a metaphorical back door in order to try and save both face and recoup the fixed costs of production. 

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