A Vote of No Confidence in Bad Ideas
I’m on the train again, this time heading down to the London Wine Fair, it’s gonna be worse than the Swig Trade Tasting, I’m sure.
I’ve Got an Idea for a Business.
My plan for this business*, I find a way to acquire some wine, then find some customers to buy that wine off me, and make a profit in the middle.
I’m a true innovator.
There’s quite a few ways to get your hands on some wine, some people even make it themselves, ‘winemakers’, we’ll call them.
The easiest, cleanest, tidiest way to go from grapes to customers is to make the wine and sell it directly to them. Maybe I could even start a membership, where customers get perks for joining, discounts on other wines. They could even visit the place we make the wines? We’ll call that the ‘winery’.
The business model I’m forming might work if I make the wine myself, and then sell it straight to the customers. That way, I’m not even in the middle, I’m the start AND the finish.
Making Wine is Actually Quite Hard
Turns out that quite a bit goes into making wine. The more I’ve tried to learn about wine, the more complicated it gets. This Master of Wine study sometimes just makes it even harder.
Back to my plan to buy wine that’s already made. I’ll ask a ‘winemaker’ from a ‘winery’ if I can buy some of their wine.
That might save the ‘winery’ having to sell it all themselves if they’ve made too much, or their club isn't going very well? Or perhaps the faff of dealing with a club means they’d rather sell it all to someone like me, at this point I become the ‘middleman’, working for myself, but also advocating for the winery.
The middleman option is pretty much the most established route to market for any wine business. I need a way to convince my customers that I’m a great place to buy wine.
One option here is to focus on great wines and explain why they’re great, through brilliantly written engaging communication. Another way, might be that customers can come and try** the wines by the glass at a venue, before you buy them?
I could plough quite a lot of money into some digital advertising, trying to establish myself that way. That feels quite expensive, I’d need to focus on a USP***.
The Marketing Gambit
Have great ideas and execute them well.
It’s not easy to have an OK idea and spend time convincing people it’s a great one.
I’ve seen plenty of wine business claiming to do things they’ve not actually doing. Concepts like ‘buying directly from winemakers’, or ‘cutting out middlemen’, creating clubs that aren’t clubs, or aggregator sites that provide platforms.
Think about that for a second, the best businesses are relatively straightforward.
Businesses I admire have a clear concept, do what they do well, and deliver for their customers.
If I’m starting this business, maybe I should call it ‘Middleman Wines’ and be totally honest about what’s happening.
The Industry That Cried Woolf
For the most part, customers don’t see the many layers involved in the wine industry, from winemaker, to importer to agency, from wholesaler to retailer. It’s easy to suggest that the supply chain is shorter and simpler than it really is.
Customers resonate with simplicity, with community. A ‘Winemaker’ and a ‘Club’.
When companies that actually do, for example, ‘buy from the winery’ tell you they do, but businesses that don’t tell you they do too, who are you going to believe?
We come to accept marketing that’s saying one thing while explicitly doing another.
When big companies start to twist the narrative, it can’t be untwisted. When people 'unknowingly mislead’ their customers often enough, the public become immune to it.
When the wolf is clearly in the field, nobody acts to remove it because they don’t believe it’s there.
When the Woolf convinces you they’re a sheep, we’re all in trouble.
* hypothetical, of course…
** ‘drink’, of course…
*** ULTRA sensory perception
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I’ve actually written before about why I wouldn’t start a subscription wine club, because the waters are too murky.
Find some exclusive wines that you can overprice, while using your paying club members to fund your growth.
It’s very easy to see how you end up selling lots of wine, while having less money than you’d started with.
A Master Of Malt piece warning about a dodgy business model from Feb, 2021
Very occasionally someone comes into the industry who doesn’t appreciate and respect these bonds of trust, and when that happens we feel a responsibility to let others know how badly they’ve behaved so they don’t get burned as we have been.
We, therefore, feel an obligation to warn others in the industry about Ben Revell, Founder and CEO of Winebuyers.com.