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The share of e-commerce in the retail trade is getting bigger and bigger in the wine industry, too. There is hardly a trader or vintner who doesn't use this sales channel for himself, be it to open up new customer groups or just to have an easy possibility to reorder for his existing customers. However, on the internet, you are not facing a few but many thousands of competitors. And - as much as you may regret it - competition always means price pressure. No matter how hard you try to emphasize other features, in the end, price is what really counts.

Watch out for cost traps

So costs down and efficiency up is the motto. Yet there are many unexpected pitfalls to be aware of in online wine sales. It is unrealistic and also unnecessary to avoid them completely, but it is important that you gain decisive advantages over your competitors!

Since we at wein.plus have been working intensively for 20 years to develop solutions and assistance for our premium members, I know these pitfalls very well, and in many cases we can also offer solutions to our members. However, the following information applies without restriction only to wine merchants and winegrowers based in Germany.

1 Too expensive shipping

Spoiled by Amazon & Co, customers today expect free shipping, at least from a certain order quantity. Simply passing on the shipping costs incurred doesn't work in internet competition. So finding a cheap shipper is crucial. As a lone fighter, however, you have little negotiating power over DHL, UPS & Co. This is where the large community of over 2000 Business Premium members of wein.plus can help you. This community sends approx. 1 million wine cartons every year and can thus achieve considerable price reductions. The partner of wein.plus here is UPS, which is also characterised by a very low breakage rate (particularly important in the wine business) and high reliability. We do not earn a cent from it, but pass on the conditions 1:1 to the members.

Who does not participate here, risks therefore already the first important cost disadvantage in the competition.

2 Too expensive shipping boxes

The second cost component that is incurred with every Internet order is the shipping carton. The price of certified shipping boxes varies significantly depending on the provider; this is where you can save a lot by buying cheap.

We, i.e. the community of Business Premium members of wein.plus, have concluded an agreement with a manufacturer of corrugated cardboard packaging after an extensive market analysis and a long preliminary selection, developed our own cartons and had them certified by UPS. Thanks to the very large purchase volume of the community (we assume a very high six-digit figure per year), this was very favorable. Since the manufacturer has its own high-bay warehouse and its own shipping department, there is also no traditional middleman. The orders are handled in close cooperation with wein.plus. wein.plus also waives its own margin here - as a result, the carton prices achieved are unbeatably low.

3 Non-certified shipping cartons

Wine is by its very nature a particularly fragile item to ship. So it is unfortunately unavoidable that one or the other shipment gets broken during transport. This is very annoying for the customer because the shipment does not arrive as expected. But it can be even more annoying for you if you are stuck with the costs for your wines.

The shipment with the usual service providers (UPS, DHL, ...) is insured, but the assumption of costs is refused if it is a shipping box that is not expressly certified by the sender. For some shippers (e.g. DHL), this certification is only valid for a single country. When shipping to other countries, a rejection occurs despite the boxes being certified exclusively for Germany, for example!

Even worse: If other packages are damaged by a non-certified box, there is even the threat of further consequential costs.

With UPS, the breakage rate is very low; if something does happen, the certification and thus the insurance are valid throughout Europe. This is one of the reasons why we recommend UPS as a shipper and of course only the use of certified cartons.

4 Lack of organic certification

In Germany, every wine merchant who ships wine and has at least one organic wine in his assortment needs an annual organic certification according to the EU organic regulation. The costs for this amount to several hundred euros per year, depending on the certification body.

The certification is necessary regardless of whether you advertise with "organic". It is sufficient that one of your wines is identified as organic on the label. In the absence of certification, there is the threat of fines from the authorities and warnings, which can very quickly ruin your calculations.

Here, too, wein.plus has reached an agreement with a certification body, according to which the latter passes on to us the expenses saved by the homogeneous structure of the Business Premium members of wein.plus in the form of a very favourable price.

5 Violation of the packaging law

For several years now, the "first distributor" of packaging has been obliged to pay a fee to a dual system for disposal by the end consumer. As of 1.1.2019, the Packaging Ordinance has been replaced by the Packaging Act, which provides for very far-reaching control options by the authorities and the competitor. In a public register, anyone can now check whether you are also complying with your Pflciht. If not, there is a threat of fines as well as warnings.

6 Warnings and or fines

The new website is ready and you can start selling wine. Unfortunately, however, we live in a legal system that makes warnings by (so-called) competitors possible even for the smallest infringements. As legal laymen we are usually overtaxed to recognize these and to adapt our website permanently to changed legal framework conditions.

It is an open secret that many warning associations regularly check our websites for legal violations using automated robots, so that after a change in the law or in the case of new websites, it often only takes days before an expensive warning flutters into the house.

A popular field for this is, for example, the "Food Information Act", which has brought many new obligations for wine suppliers. But also competition law, data protection regulation, telemedia law (TMG), service information obligation regulation, press law and other laws harbor many risks.

Very topical is after a ruling of the LG Bochum from January 23, 2019, the topic of age verification of purchaser and recipient within the framework of the Youth Protection Act.

So let a lawyer help you before your website goes online. So that this doesn't hit the budget too hard, we have negotiated a framework agreement for you with a lawyer specialising in online law in the wine sector.

7 Payment defaults

The wine has been delivered, and now comes the money. That's how it should be, and fortunately it usually is, for example if secure payment procedures are used in the ordering process and the money is therefore safe before the goods leave your house.

However, it is often unavoidable to deliver on account. The invoice is still the German's favourite payment method, and we don't always want to do without these customers. But direct debits can be recalled by the customer within 8 weeks without justification, so even these funds are not entirely safe.

Payment defaults are doubly annoying. One does not want to and cannot do without the money for shipped goods, but also the commissioning of a lawyer or collection agency is not unproblematic. If the customer is definitely insolvent, instead of money you still get the fee invoice of the commissioned collection agency or lawyer.

Together with a debt collection agency, we have developed a solution for our members in which no costs are incurred in the event of irrecoverable debts!

8 Too expensive advertising or no advertising

How do I win new customers? The internet has its own laws. You can book banners, use search engine advertising or buy advertising on marketplaces like Amazon or eBay. In the end, there is always the question of how much advertising effort per customer and euro of turnover you have invested. This can quickly cost the entire turnover or even more. So be careful which measures you commission. But of course "no advertising" is no solution either. It is therefore important to find efficient and effective measures.

It is almost free to be found via Google search. The most important prerequisite for this is the so-called link relevance, i.e. many qualified links from wine websites that refer to your website. As a Premium Business member, you will automatically receive plenty of valuable links, which will bring you many additional clicks and a higher link relevance.

9 Want to do everything on your own

What is more helpful and cost-saving in business than the advice of colleagues with whom you are virtually in the same boat? A strong community helps, ensures that you avoid mistakes and lets you benefit from the experience. The community of Business Premium members has formed a special closed group on Facebook, to which you only have access as a Premium Business member.

10 Incorrectly paying sales tax for foreign deliveries

Do you sell wine abroad? And to whom do you pay the sales tax for these sales? Hopefully not to the German tax office, because that would be wrong from a tax point of view. And this is different with wine than with most other goods - from the very first euro of sales, since the so-called "delivery threshold" for alcoholic beverages is zero. Please discuss this topic with your tax advisor. Otherwise, there is a risk of considerable additional payments of the incorrectly paid turnover tax in the event of company audits.

Overview of customs and tax formalities for wine deliveries abroad

We can help you

Do you want to sell wine on the internet and increase your competitiveness? We, the community of all business members and of course the team of wein.plus, are happy to help. Please contact us. In the already mentioned Facebook group or gladly also by e-mail to me personally graafmann@wein-plus.eu

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