A 5-Point Checklist For Selling Through Online Wine Marketers
September 27th, 2012
By Jeff Carroll - VP of Compliance, ShipCompliant
The rapid emergence of online wine marketers might be the biggest innovation in wine sales over the past five years. But selling and marketing your wine through these third-party channels poses many compliance and business-related challenges. That?s why we?ve put together this comprehensive 5-point checklist to help you sell through third-party marketers efficiently, compliantly and profitably.
1. Know Your Why
There are lots of great business reasons why wineries work through third-party marketers to sell their wine. It could be to move excess supply, help launch a new brand or label, power your social media?efforts, or perhaps target a new demographic. And not all marketers are alike.The first thing you need to ask yourself is ?Why?? Understanding this will help you best determine which marketer is best positioned to help you reach your business goals.
Key Questions to Ask:
- Which online marketers are best able to attract my target customers?
- How much inventory should I dedicate to this?
- Which type of online marketer best satisfies our business objectives ? a daily deal site, social shopping, niche wine site or a mass market platform?
- How would my brand be impacted across these different options?
2. Know Your ABCs
From a compliance perspective, selling wine through third-party marketers had been somewhat of a gray matter until the release of a very important advisory from the California ABC last fall. In the advisory, the ABC provided clear guidance on how wineries and third-party marketers can work together in a compliant fashion. The guidance covers everything from pricing to fulfillment to disbursement. Luckily, there?s a great blog post that breaks down the full advisory, so you know exactly what landmines to look for.
Key Questions to Ask:
- Is my third-party marketer familiar with the ABC advisory?
- Have they considered the ABC?s guidance in how they?ve constructed their service?
- Am I assured that I won?t be putting my license at risk?
3. Know How Funds Get Handled
When working with third-party marketers, payments and disbursements can often be the trickiest steps of the process. In order to follow the guidelines set forth in the ABC advisory, the licensee must be in full control over all aspects of each transaction. This can be hard to balance as third-party marketers typically secure the credit card info and payment authorization. So make sure the process by which funds are collected and transferred is crystal clear.
Key Questions to Ask:
- What?s the checkout experience like from a user perspective?
- When do I take control of the order funds?
- Am I fully in control of the funds throughout the entire process?
- How are the marketing fees structured and when are they paid?
- How will taxes get calculated, collected and paid?
4. Know How Compliance Gets Handled
In online shopping environments where customers are used to lightning fast checkouts and no additional actions are needed, compliance checks can also be a very delicate thing to handle. Technology has now evolved to a point that holistic compliance checks and tax rate calculations can happen in real-time; online orders can also be automatically bundled into your overall numbers for state reporting, but the third-party marketer must work in close concert with your compliance provider. If you want to keep your back-office paperwork to a minimum, this point is truly important.
Key Questions to Ask:
- Is the third-party marketer integrated with our compliance solution?
- If not integrated, how will orders get checked for compliance? How quickly can it occur after transaction?
- How do I consider my other direct shipments when evaluating the compliance of these orders?
- If the transaction is found to be out-of-compliance, how does that get communicated back to the customer?
- How do I retrieve the order information needed to aggregate and consolidate for tax and shipping reports?
5. Know How To Measure Success
In addition to the hard costs involved in selling through third-party marketers, there are several soft costs to consider as well. Namely, how much time will it take for me and my staff to launch and maintain this sales channel? Make sure mechanisms are also in place to measure progress towards your original business objectives, whether it?s tracking new Facebook fans, wine club members, or net proceeds on a certain batch of inventory.
Key Questions to Ask:
- Did this third-party marketer help us achieve our original objectives?
- What would make working with this third-party marketer an easier process?
- Was our brand well represented through the entire marketing, transaction and distribution process?
- What information will I receive about the customers who buy through this marketer?
At ShipCompliant, we believe compliance should never get in the way of your success in the wine industry. That?s why we?re intently focused on making sure you?re fully aware of both the potential and risk involved with selling through online wine marketers.
If you feel that you are ready to engage in selling your wine through third-party marketers, we?d be happy to answer any questions that you have or introduce you to similar sized wineries that have already navigated these waters and experienced success.
Additional Resources:
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