Wine Technology Blog @ WineWeb.com

Two statements from the recently released "State of the Wine Industry" report by Silicon Valley Bank caught my attention:

• "Distribution has all but ended as a viable sales channel for small wineries."
   
• "For most small brands, the best opportunities are in direct-to-consumer marketing strategies. Finding the right strategy may become absolutely critical to a  winery’s success, if not its outright survival during the next several years."

So what's a small winery to do? Here's one of the report's recommendations: "If you have been using an in-house Web platform, consider upgrading to use an e-commerce company that specializes in wine and can help direct your progress in the channel." And as I mentioned in a previous blog post, you don't need to go into debt to invest in this technology.

We just launched a new program called "WineWeb Ambassador". If you are a website designer, web developer, webmaster, wine industry marketing professional, or you supply products/services to the wine industry, you can become a WineWeb Ambassador and leverage our services to help your business grow.

WineWeb Ambassadors recommend or help their winery or wine merchant clients use our services. WineWeb provides tools and services to assist wineries and wine merchants develop and grow their direct sales channel. Our value-based pricing is suitable for wineries of all sizes, however many of our clients do not have dedicated resources on their staff to support the direct sales initiatives, which is where our ambassadors are needed.

WineWeb Ambassadors gain access to information and training to enable them to recommend our services, and to assist clients in deploying these services. Plus, if your efforts enable us to reduce the time and effort we spend in setting up a client with our services, we compensate you for that.

For more information and to sign-up to our Ambassador mailing list, go to www.wineweb.com/ambassador. It's free to join.

I just received an email from Network Solutions stating that the domain names I recently searched for are still available and offering me a discount to buy them. I don't remember being logged in when I did those WhoIs searches (even more scary), but maybe I was. Anyway, the point is that Network Solutions (and maybe other domain name registrars) are tracking your WhoIs searches. In case you're not aware, all domain name registrars (Network Solutions, Godaddy, Register.com, etc.) provide a "WhoIs" function for you to see the details of who registered a domain name. It's a fast way to check on a domain name, but if you're looking for new domain names for your business, I'd advise against using that function. I've also heard of people who used WhoIs to look for domain names, only to come back an hour later and find that those domain names were just registered by a reseller.

What to do? If you want to research new domain names, login to your domain name account and use their search function, then be prepared to immediately purchase any domain names that you find.

To support Earth Day, we have purchased carbon offsets equivalent to the carbon dioxide generated by the electricity used to power our web and email servers. You'll notice the "CO2 Neutral" seals that appear throughout the website. Visitors will also see the seal on the shopping cart pages of all wineries and wine merchants that use our e-commerce system.

Purchasing the carbon offsets was easy to do, relatively inexpensive, and we encourage other Internet services companies to explore similar ways to offset their carbon footprint.

I've seen a couple of press releases recently touting the great financing rates available to purchase winery technology solutions. Wow, that stuff must be way overpriced if you have to go into debt to get it! Maybe the technology salesperson has convinced the winery that they need a data center and all the associated hardware and software (cha-ching goes the sales commissions on that).I guessing that most winery owners would much prefer to finance barrels than they would technology. Oh, and the financing is just on the initial fees, not the ongoing operation and maintenance costs.

I should state that WineWeb does have a payment plan. We break up the setup costs: half billable when a winery registers, the other half billable when setup is complete. And if a winery is really strapped for funds, they can charge it to their credit card and pay it off over a couple of months. But we're talking hundreds of dollars, not tens of thousands. I really enjoy when a prospective client gets that "ah ha" moment and says "all this for only this amount of money!" We tell them they can pay more, but no one has done that yet.

We've rebranded our blog as WineTechnologyWorks.com. The focus will be on technology in the wine industry: what works and what doesn't, with an attempt to focus on topics that may evoke (or provoke) discussion. WineWeb has always been focused on providing technology that works and that provides real value to its clients. We constantly see good stuff that we'd like to highlight, as well as items that make us scratch our heads in wonder. We've had that domain name for a while and liked the play on words, so we'll try to put it to good use.

Now if I can force myself to get this stuff from my head to the keyboard...

OK, so this isn't directly about wine, but sometimes a news item is just so amazing that I have to comment on it. The news was that Satyam, one of the large Indian software companies, had been misstating their revenues and cash. Having spent nearly 10 years directly competing with Satyam for outsourcing projects and having spent almost 10 years as a CPA with one of the Big 4 accounting firms, I feel qualified to comment on this.

The company reported a cash balance of 53 billion rupees (about 1 billion US$), when in fact they had only 3 billion rupees in the bank. It seems that a white lie made several years ago just kept growing until it was out of control, and they had to come clean. What's amazing here is that PriceWaterhouseCoopers missed it in their audits (and no, I used to work for Deloitte). I don't have to pull out one of my CPA textbooks to remember that verifying cash is one of the most basic auditing tasks. How do you miss a billion dollars?? Heads will roll at PWC, partners will be shot (or maybe should be). What a mess!

What's sad it that this situation will likely tarnish all Indian software companies. I'm a firm believer in leveraging a global workforce to provide value, quality and competitiveness in any industry. In my own industry, I've not been surprised at a company having to layoff many people after bragging about spenging $100/hour to develop a software application. Those economics just aren't sustainable in these times.

So, to happier times, and a Happy New Year. Cheers!

We issued this press release this morning...

WineWeb.com now offers a Premier Bundle of its services for wineries, at an attractive fixed cost per month. The bundle includes all services to manage a winery's direct sales, including website, e-commerce and point-of-sale. "We want to provide a cost-effective way for medium-sized wineries to use our services, especially in these tough economic times," states Ron Kreutzer, President and Founder of WineWeb Enterprises, Inc. "This bundled service saves money for wineries with monthly online sales over $20,000" continued Kreutzer.

The WineWeb's Premier Bundle includes services to create and manage a winery's website, e-commerce, point-of-sale, wine clubs, direct-to-trade sales, email campaigns and affiliate sales. Included in the services are its advanced content management system, customer repository and integration with shipping carriers, fulfillment centers, payment gateways, and compliance services. Pricing is $295 per month with a one-time $1,500 setup fee. There is no contract commitment period and no additional revenue share fee. For smaller wineries, WineWeb continues to offer website plans starting at $25 and $60 per month.

Recently, when potential clients come to me with questions about our company and services, I can sense that the economic conditions are putting more of an emphasis on business stability in their potential business partners. In addition to the typical questions about how long we've been in business and how many clients we serve, I'm getting questions on how we intend to survive any economic downturn. 

I'm thankful for these questions, as gone are the days when being larger gave you an advantage in business survival. If I were to put on my CPA hat (actually dusty green visor from what seems like a lifetime ago), I could think of some questions that companies should be asking potential vendors.

1. Do you have a positive cash flow each month?
2. Could you still make a profit on 20% less revenue each month?
3. Is there any outside debt on your balance sheet?
4. Have you had positive growth for the past 3, 6 and 12 months?
5. Do you have venture capital funding or investors that you need to repay in the next 2 years. If so, can your monthly profit cover the payments?
6. Will you need additional funding to meet operating costs in the next year?
7. Do you have a line of credit? If so, have you borrowed against more than half of that amount?
8. Have you had to layoff any employees in the past year?
9. Have you had to reduce the scope of any service enhancements or growth plans in the past year?

Getting answers to questions like these should give a company a better comfort level (or lack of comfort) with a potential vendor. For the record, my answers are: 1.Yes, 2.Yes, 3.No, 4.Yes, 5.No, 6.No, 7.No, 8.No, 9.No.