Amazon Wine Executive Steve Johnson On Analytics, Pricing, Commoditizing, And More

Aug 26, 2015

(Forbes) - Amazon announced yesterday that it will start delivering wine, beer and spirits as part of its Prime Now quick-delivery service within Seattle, where the company is headquartered. The announcement dovetails with this final post in our three-part series about wine sales on Amazon, where we considered the successes and the obstacles that the platform presents. Today we feature a Q&A with Amazon Wine executive Steve Johnson. A lively thread of conversation about this topic is also underway over on Facebook — follow along and join the conversation, there or in the Comments section below!

Which wineries are best suited to selling product on Amazon? Larger brands? Medium? Smaller? Is there a “profile” of a winery that does well on your platform?

Steve Johnson (SJ): The beauty of Amazon Wine is we’ve in essence leveled the playing field for wineries to attract customers and create their own success. We’ve seen up-and-coming brands have just as much success as established brands on Amazon Wine. We know that customers have a broad palette as we listen to their feedback daily. When customers come to Amazon Wine they’ll find more than 8,500 labels at a variety of price points so they can find the perfect wine every time, whether they are looking for a favorite or maybe even discovering a new favorite.

How do you see Amazon’s market position relative to the three-tier system of alcohol distribution in the US?

SJ: Amazon Wine is an online marketplace that connects customers with labels offered directly from the winery. Over 1,100 wineries selling on Amazon Wine have the opportunity to tell their story, build their brands and expand their customer reach.

How does Amazon approach the pricing strategy for wines? That is, do prices match up with other ecommerce/DTC options? Does Amazon take a commission on sales and, if so, how much? And, since shipping fees are such a sticky issue for online sales, how does Amazon approach that?

SJ: Wine sellers set their own prices and all Amazon Wine orders are sold and shipped by the wine sellers. To create a great customer experience, all sellers adhere to standardized shipping rates for the shipping speeds they choose to offer (standard group, two-day air or next-date air). Sellers may also opt-in to participate in the 1¢ shipping promotion, which provides customers with standard ground shipping for a penny on eligible orders.

Sellers on Amazon Wine pay a referral fee just like our millions of sellers in other categories, and our rates are transparently posted on our site. We believe in no surprises, and that we succeed only when our sellers succeed.


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