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Vin65 Blog

DTC wine thoughts served up by Vin65

February 7, 2017 | Jim Agger

5 Reasons Online Marketplaces Are Important for DTC Wine Sales

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Online marketplaces - like Amazon, eBay and Etsy - account for 1/3 of total ecommerce and are growing quickly. With more and more luxury brands jumping onboard, here's what you need to know about the marketplace opportunity and how your winery can benefit.

Online marketplaces - like Amazon and eBay - represent a big opportunity for wineries selling direct-to-consumer. They make up a large percentage of ecommerce sales, they are growing quickly and, most importantly, they allow you to efficiently reach large numbers of new buyers.

That's why today we're excited to announce a new partnership that enables all Vin65 clients to sell wine direct-to-consumer through eBay. With 167 million active buyers and a recently launched wine offering, eBay is an ideal channel for wineries and joins Amazon and Vivino as part of our marketplace network. You can check out our client store on eBay here.

But what exactly is an online marketplace? Internet Retailer calles them the "malls of the future": a digital destination where buyers can discover new brands and products. In short, an online marketplace is a website that aggregates products from numerous third party suppliers. Amazon and eBay are two of the most popular examples.

Here are five reasons why we think marketplaces are important for DTC wine sales:

1. Marketplaces Are Big

Two of the largest marketplaces, Amazon and eBay, alone accounted for nearly 1/3 of all ecommerce in 2015. That's almost $100 billion in sales. With that kind of volume, marketplaces are too big to be ignored and offer a significant opportunity for direct-to-consumer wine sales.

2. Marketplaces Are Growing

In addition to their size, marketplaces are growing faster than other ecommerce channels. Overall ecommerce grew 15% in 2016, but marketplaces grew by 19% and show no signs of slowing.

3. Luxury Brands Have Embraced Marketplaces

Think Amazon is too down-market for your winery? Think again. 34% of the top 1,000 online retailers also sell on marketplaces, and during the 2016 holiday season, these luxury retailers all had products available on marketplaces:

  • Kate Spade
  • Cartier
  • Gucci
  • Ray Ban
  • Prada

4. Consumers Trust Marketplaces

Establishing trust with a new customer is hard, especially if their first interaction with your winery is online. Marketplaces help ease this transition. In fact, 65% of consumers will buy from a brand on a marketplace that normally would not have purchased direct. This provides a unique opportunity to put your winery's brand in front of millions of new potential customers, with a higher probability that they'll convert to a sale.

5. Wineries Are Succeeding on Marketplaces

In 2016, Vin65 client wineries had a breakout year selling on marketplaces. YOY sales on our marketplace partners increased 78%. This is equivalent to a 3% incremental increase in total direct-to-consumer wine sales. With concentrated effort, those returns can be even bigger and we saw some wineries add up to 16% in net new DTC sales.

Interested in learning more?

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Sources: Internet Retailer 2016 Online Marketplaces Report and Vin65 Data

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