Is The World of Free Delivery Crippling The Little Guys?

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We live in an Amazon.com world. If we want something then we can head online, pick our stuff from a list of different sellers on the massive market place, and with a couple of clicks it’s paid for and whistling over to our places within a couple of days. How good is that as service goes? Not bad, eh? Especially when most of the time they offer that delivery for free!

I have to explain why I got involved in wine selling quite a lot. My thinking is that wine and food and anything with a bit of a story behind it isn’t a click and buy product. If you can afford to then you’ve got to head to the little guys, the specialists, the ones that’ll give you the added value that you pay up a bit for. But it’s funny, people are happy to pay for the product, but then when you mention a delivery charge the looks on people’s faces changes pretty quick.

It’s a pretty shitty equation if the volumes aren’t sky high. Margins in wine are low thanks to years of a supermarket race to the bottom. The idea of £5-£7 for a bottle of wine seems set in stone for most, and you can’t make money out of that unless you’re selling millions of bottles a year.

Sending wine around to the buyers also costs a lot of money. I remember checking with DHL and ParcelForce when I started and baulked at the £25 charge to deliver just 6 bottles of wine with the right insurance. Ok that was a worst case example, but couriers and the like aren’t cheap. In fact I recently read that Ocado, who do online grocery shopping in the UK, are losing most of their margins by offering the free delivery. How do you think the little wine guys get on?

It’s happy days for the end buyer at the minute, but I’m not sure it can last.

Cheers

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