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'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 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.

We just finished our annual PCI Data Security Standards asssessment and have made sure that we are still in compliance for accepting and storing credit card data. Luckily, having done over 70 computer control audits in what feels like another lifetime, this process was relatively easy, although the 200 questions did take some time to answer and verify with our policies and procedures.

While previously there was an exemption for small companies, now every merchant that accepts credit cards must complete an annual assessment in order to be compliant with this requirement (www.pcisecuritystandards.org for more info). If you use an e-commerce service like ours (WineWeb), then the process is simpler with about 30 questions in the assessment. However, if your company has it's own shopping cart software running on a web server and you store credit card data electronically, then you're into the long questionnaire, which requires things like an "Encryption Key Custodian Acknowledgement" and an "Incident Response Plan". You've got those, right?

I was pondering our point-of-sale application and thinking about the upcoming Family Winemaker's tasting event. A winery could take a laptop with a broadband Internet card and could use our POS application to take orders in real-time. No more paper order forms with illegible handwriting. They could even attach a magnetic card reader to a USB port and swipe credit cards -- all quite cool.

Now, for those wineries worried about table space and wine spilling on your laptop, here's an even more high-tech idea -- use your iPhone as a point-of-sale terminal. Being web-based, the WineWeb point-of-sale application can run on an iPhone.

My appologies if this sounds like a sales pitch, but imagine the possibilities. The concept that point-of-sale equals tasting room is gone. Now a winery can sell wine, event reservations and wine clubs whereever they happen to be. Cool stuff to ponder.

It's official -- yesterday we announced our point-of-sale service for wineries. And no, we're not selling specialized hardware that only works with our solution. The WineWeb POS is a web-based application that can run in a browser on any computer or as a desktop application on Windows or on a Mac. Think of it, a laptop computer is all a winery needs to process tasting room sales and integrate with their online sales and customer data. A credit card reader, receipt printer and cash drawer can be added to speed transaction processing. There's a lot of functionality in this system -- you can read the press release and view our services description and pricing.

Here's a sample image

WineWeb will be at all the major trade shows, so be sure to drop by our booth and say hello.

We'll be at:

• Tasting Room Profitability in San Rafael - Jan. 23-24
• Unified Symposium in Sacremento - Jan. 30-31
• Advanced Tasting Room Strategies in Rohnert Park - Feb. 5-6
• WAWGG in Kennewick, WA - Feb. 6-7
• OWIS in Eugene, OR - Feb 10-11
• Texas Wine & Grape in Houston, TX - Feb. 22
• Wineries Unlimited in King of Prussia, PA - Mar. 5-6