Third Time’s A Charm? Amazon Tries Again With Launch Of New Vertical, Amazon Wine

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Amazon.com announced the launch of a new marketplace today, Amazon Wine, which offers customers a selection of over 1,000 wines from various wineries around the U.S. The new store – Amazon’s third attempt at entering this market – arrives just ahead of the holidays, providing shoppers with tools that will help them locate the right type of wine, suggest food pairings, and offer tasting notes, as well as other wine details, like information about the winery or the total case production.

In addition, Amazon customers can research things like the wine’s American Viticultural Area (AVA), composition, and percentage of alcohol. The search engine on the site has been customized to help shoppers discover wines that match their own interests, like those rated “90 & Up” in their Professional Rating, or they can pick a tasting note like “cherry” or a winery’s location, in order to filter the results.

The service includes access to a wide range of wineries, from smaller, family-owned business like Roadhouse Winery in Sonoma County that only produces 3,000 cases a year of their hand-crafted Pinot Noir, for example, as well as larger, corporate operations like the 650-acre Flora Springs Winery and Vineyards in Napa Valley. Notably, Amazon is not touting the number of wineries participating in the new marketplace, but is instead encouraging others to sign up to learn more. Currently, Amazon’s selection comes mainly from  California, Washington, and Oregon, with featured wine country regions as Napa Valley, Sonoma, Paso Robles, Walla Walla, Red Mountain, and Willamette Valley.

Amazon Wine isn’t yet available everywhere in the U.S. The company says it supports shipments in the following states currently, with other states coming soon: California, Connecticut, Florida, Idaho, Illinois, Iowa, Nebraska, Nevada, North Carolina, Oregon, Washington, Wyoming and the District of Columbia.

Because shipping wine is subject to different types of laws than the other goods Amazon sells, it has set up a special page to keep customers informed about the various restrictions at Amazon.com/wineshipping.

Amazon’s launch into this new vertical means it’s now competing against longtime wine shopping sites, like San Francisco-based Wine.com, which now ships over 2.5 million bottles per year across states representing 90 percent of the U.S. adult population. Incidentally (but not coincidentally), Wine.com launched a new marketplace earlier this week ahead of Amazon’s news, which offers its customers expanded access to wines with limited distribution, including both domestic and imported wines. The marketplace was soft-launched earlier in the year, but now offers access to over 10,000 wines annually, and includes free shipping for those paying the $49 annual fee.

Wine.com was also quick to point out the differences between its site and Amazon’s forthcoming service, noting that Wine.com handles all the fulfillment, storage and shipping logistics including any fees, whereas Amazon cannot, for example. And because Amazon can’t combine fulfillment orders from different wineries, each Amazon Wine order from a different winery will be shipped separately, requiring an adult signature.

According to reports, Amazon is charging wineries a 15 percent referral fee, a cooperative fee of $49 for every $350 in sales, and a subscription fee of $39.99 a month. This is not Amazon’s first attempt at the wine business – that was in 2000, when it invested in Wineshopper.com along with Kleiner Perkins Caufield & Byers, a site that later became a victim to the dot-com crash. New Vine Logistics arose from the remains of Wineshopper, and Amazon planned to launch with them instead. But New Vine’s investors pulled out in 2009, when the California Alcoholic Beverage Control agency issued an advisory that essentially made it illegal for third-party online retailers to make money off the sale of alcohol without a license – something which conflicted with the business model the new venture had planned.

Today, Amazon is giving it another go, and is kicking off today’s launch with a promotion that will allow customers to select up to six bottles of their favorite wine for $9.99. Other wine prices on the site vary, depending on the bottle. Amazon is also promoting an Amazon Wine Mailing List, which will offer occasional updates on the service and new products.