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Freedom of Choice Isn't Free
By Tina Caputo
May 11, 2010
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Thanks to a landmark decision made by the Supreme Court in 2005, wine lovers across the United States have unprecedented access to wines made beyond their state borders.  But there’s also a downside to all this online and mail-order bounty.  It usually presents itself just after you’ve filled your virtual shopping cart with wine, and you arrive at the screen that shows the cost of shipping.  Ouch!  Sometimes it seems like you’re paying more for the box’s transportation than you are for the wine inside it -- and in some cases, you are. 

The situation, it appears, isn’t getting any better.  I recently received an e-mail from a frustrated WRO reader, who told me that he’s had to cut way back on out-of-state wine purchases due to shipping costs that keep getting higher.  He’s even thinking about dropping out of one of his favorite wine clubs. 

Deciphering the reasons behind the high cost of wine shipping isn’t a simple matter.  There are many different factors that affect the final cost.  Such as:

-- Bottle weight:  Are the wines packaged in standard 750ml bottles, or do they come in those super-hefty, extra-thick bottles that some wineries favor for higher-end wines?  (Nothing says “worth $100” like a 10-pound bottle, right?)  If you’ve ever sent a package across the country via UPS or FedEx, you know that the more it weighs, the more it costs to ship. 

-- Distance/Fuel Price:  Is the wine traveling 30 miles or 3,000?  Fuel isn’t cheap these days, especially when you’re hauling a case of those 10-pound bottles across the country.

-- Adult Signature: To keep wine deliveries out of the hands of minors, shipping laws require the carrier to get a signature from an adult recipient before handing over the goods.  That too, comes at a price -- up to $5 extra per shipment. 

-- Shipping Carrier: The founders of the “big two” national shipping companies didn’t have wine in mind when they started their businesses, so the firms add on extra costs (see above) for special handling.  However, there are a handful of regional carriers that specialize in wine and don’t tack on those extra fees.  Wineries that use those carriers can often afford to charge their customers a bit less for shipping -- at least in certain areas.

-- Packaging: Wine requires specialized packaging to protect it from breakage during shipping.  And that stuff costs the wineries money. 

-- Shipping Permits: Some states require wineries to fork over permit fees for the privilege of shipping wine to residents within their borders.  And sometimes, those wineries pass the savings -- er, I mean, the extra cost -- on to the consumer.  

Counting the Cost

To see what’s really happening in the world of wine shipping, I compared the cost of sending six bottles from various wineries to two different locations: one to my house in Northern California and the other to my dad’s house in suburban Michigan. 

The cost for ground shipping to California ranged from $22 (Anne Amie Vineyards, Carlton, Oregon) to $29.09 (Louis Martini, St.  Helena, Calif.).  Why does it cost $7 less to ship to my house from Oregon than from 50 miles away, in Napa Valley?  Louis Martini has some very heavy bottles in its line-up, so weight is probably a factor there. 

Ground shipping to Michigan ranged from $34 (J Vineyards & Winery, Healdsburg, Calif.) to $39 (Louis Martini again). 

Overnight shipping to California ranged from just $15 (Jarvis Winery, Napa, Calif.) to $60 (J Winery).  Why the huge difference in price?  The carrier may have something to do with it:  J uses FedEx for overnight shipping, and Jarvis uses a regional shipper.  It’s also likely that Jarvis has chosen to subsidize the cost of shipping in order to encourage wine sales -- a strategy that more wineries are starting to adopt. 

For overnight shipping to Michigan, prices ranged from $65 (J) to $71 (Jarvis). 

Overall, I found that prices were pretty similar from winery to winery, within a few dollars of each other in most cases. 

The Inside Story

Thornton Jacobs, direct-to-consumer sales manager for J Vineyards & Winery, helped to shed some more light on the issue of wine shipping costs. 

A major concern for wineries right now, he said, is the cost of fuel.  “Unfortunately, FedEx and UPS have been working a lot like the airlines lately -- there are a lot of additional fuel surcharges.  I’m just waiting for the worst to come with this whole Gulf of Mexico oil spill.  If that drives oil prices up, we’re going to see another round of fuel surcharges.  That’s a real challenge, and it’s totally out of our control.”

The adult signature requirement is also a big cost factor, as carriers continue to increase wineries’ per-delivery fees.  “The FedEx and UPS rates -- I wanted to say they’re always bouncing around,” Jacobs said, “but they always bounce up and never back down.”

Although shipping prices may seem overly steep to wine consumers, he pointed out, the wineries do not profit from them.  

“For us, one of the biggest impediments for people to place the online order or to join the wine club is the cost of shipping, so we’re always looking for ways to reduce those costs,” he said. 

Jacobs is currently in the process of talking to new vendors, such as third-party fulfillment houses, about ways to realize new shipping efficiencies.  “I want to offer our customers the cheapest shipping that I can,” he said.  “We’re in the business of selling wine, not selling shipping.”

Minimizing Costs

The folks at Anne Amie Vineyards have apparently heard some comments about their shipping rates, because the winery’s order page includes a link called “Why Does Shipping Cost So Much?”  The list of frequently asked questions cites many of the factors highlighted in the beginning of this article, and it offers a few tips for minimizing costs:

-- Reduce the per-bottle shipping cost by ordering more than one bottle per shipment.  (The national shippers charge a flat fee just to add a package to their system -- whether the box holds one bottle or 10 -- before the charges for weight, size, etc. are added on.)

-- Ship the package to a business address.  Shipping carriers typically add about $2-5 to deliver to a residential address.  (It often takes more than one delivery attempt at a recipient’s house, which costs the carrier time and money.)

-- Take advantage of quantity discounts and keep an eye out for free shipping specials.

That last one requires a little disclaimer.  In California, it’s actually illegal for wineries to offer “free” shipping to customers.  They can get around it, however, with different wording, such as “shipping included.”

While the cost of shipping is sometimes hard to swallow, it’s the price we must pay for having access to such a wide variety of fascinating wines from across the country.  And it certainly beats the alternative of limiting ourselves to the wines that happen to be available at the shop down the road.