Wine Shipping Costs: A Benefit-Cost Analysis

Lynne Kiesling

Dr. Vino has post on wine shipping costs, and various aspects of them. Shipping costs can be high; after all, glass bottles of liquids are heavy. That said, I think that the cult winery that is charging him $68 to ship a case of wine from California to New York could be gilding the lily. We get a half case from Preston Vineyards every quarter, and our shipping is on a pro-rated and distance-adjusted basis is less than that.

In addition to the aspects he discusses (you don’t pay sales tax, etc.), I would point out that when you buy a case of wine from the winery, you typically get a volume discount. If, in addition, you are a member of the winery’s club, you probably get a larger discount. We get a 25% discount on the wine we buy from Preston. So once you factor in high shipping, no sales tax, and reduced price relative to retail list, perhaps the shipping’s not that big of a deal.

I think Dr. Vino is right, that in the wake of more liberalized wine markets within the US we will first see the early adopters diving in. In the short run that shifts out the demand curve, but the nature of winemaking constrains the supply, so prices (perhaps including shipping) could rise. Over time, as wineries absorb these changes, if wine shipment becomes more popular it will put downward pressure on shipping prices.


One thought on “Wine Shipping Costs: A Benefit-Cost Analysis

  1. Consulting the UPS oracle…….

    UPS has it at $18.24 (without discount) to ship a 30 Pound package Ground Freight from Santa Barbara to Chicago. The $68 sounds like it has a profit margin built in.

    Perhaps one could use their own UPS account, if the merchant will allow.

    JBP

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