Sell Wine Online: A Comprehensive Guide to E-commerce & Shipping Regulations

Since the late ‘90s, wine sales in the U.S. have steadily increased. And according to research by the Wine Institute, the U.S. has been the highest consumer of wine in the world since 2014.

When you look at the stats below, it makes sense why this is the case:

• There are nearly 10,000 wineries in the U.S.
• Between 2006 and 2016, wine production jumped by nearly 25%, with 2016 production totaling over 800 million gallons.
• The annual consumption of wine per American adult is 2.94 gallons — an increase of more than 20% since 2005.

But the sector of the wine industry with the largest growth is direct-to-consumer sales (D2C).

Whether you compare it to grocery stores, convenience stores, or independent wine shops, winery D2C shipping continues to be the leading retail channel.

Why is this the case?

According to the 2018 Direct-to-Consumer Wine Shipping Report, there are two primary reasons for this growth.

1. The first is that not only are new states entering the world of legal wine shipping, but they’re also thriving right out of the gate. For example, Pennsylvania received its first direct shipping permits in August 2016. And in terms of shipment volume, it is now among the top 10 states in the U.S.
2. The second reason is the growing alcohol ecommerce market. In 2017, online sales of beer, liquor, and wine increased by more than ⅓ year-over-year (YoY). Wine was the most popular kind of alcohol, accounting for 65% of those sales. Taking a look at ecommerce in general, Forrester reports that 17% of all retail sales will be conducted online in less than five years.

In this guide, we’ll focus on the latter factor — the increase of online wine sales — and how ecommerce merchants can take advantage of this expansion.

Wine Ecommerce is Growing Rapidly

Thanks to apps like Uber Eats, Postmates, and Instacart, today’s consumers can have nearly any food or drink delivered directly to their door.

But what consistently remains missing from the list of these available products is alcohol.

Now, considering the regulations they have to contend with, it’s understandable for the average wine retailer to be slower to adopt D2C sales.

However, this isn’t to say that only a handful of wine sellers are embracing ecommerce. In fact, it’s quite the opposite.

Last year, the volume of DtC wine shipments totaled 5.78 million, representing a 15.3% YoY increase. And the value of these shipments came in at an all-time high of $2.69 billion in 2017.

Clearly, there are plenty of brands who recognize the potential of wine ecommerce and have begun taking advantage of this selling channel.

One of the major benefits of selling online is the ability to reach a much broader audience.

Not only that, wine ecommerce can also help companies increase the loyalty of their existing customers.

Traditional advertising — for example, TV commercials, print ads, and on-site events — substantially limit the number of wine drinkers you can market to. For the most part, the only people you can reach are local consumers.

But digital marketing allows wine sellers to connect with potential customers all over the world.

Plus, ecommerce software enables wine merchants to capture data about wine consumers that they can use to create hyper-targeted, customized emails and ads across multiple online channels. And personalized marketing is much more likely to attract new customers than generic content.

Just as personalized marketing can bring in new customers, it can also encourage past customers to buy from you again.

Customer relationship management software, when integrated with an ecommerce platform, gives you the power to get a complete profile of every customer. And with this profile, you can offer product recommendations and exclusive discounts based on the specific bottles of wine that each customer has previously purchased.

These marketing strategies simply aren’t possible for brick-and-mortar wine retailers.

Do I Need a License to Sell Wine Online?

The required documentation to sell wine from an online store depends on the state in which you operate as well as the states to which you ship.

Below is a list of the most common forms you’ll need to complete as well as the licenses you’ll likely need to obtain:

• Alcohol Dealer Registration. This form is used to record your business and tax information, dealer class, and subclass and must be filed and approved by the Alcohol and Tobacco Tax and Trade Bureau (TTB) prior to initiating online sales.
• A winery license from your state.
• A retailer’s license from your state. IMPORTANT: Just because you can sell locally doesn’t necessarily mean you can sell online.
• A shipper’s license for each state to which you plan on shipping. This proves you are a licensed and authorized alcohol seller.
• Direct shipping agreements with all of your carriers.

In the next section, we’ll take a more thorough look at what it takes to legally sell wine online.