(NBBJ) - It was the heady e-commerce boom of the late 1990s when Jim Weinrott launched WineAccess in a Philadelphia suburb as an online portal for buying wines from a network of wine shops.

WineAccess launched in 1999 and received $9 million by September 2000. But then The dot-com boom reversed, and the value of technology stocks slid from 2000–2002.

“The site launched, and the market crashed, and everyone ran,” said Weinrott, 60.

WineAccess hasn’t received any more venture funding since then. From 2002–2006 as consumer interest in online wine purchases was limited, the 25-person team shrank to three as the company survived on monthly fees of $500 a month from a network of 75 stores.

Then in 2006 the business model changed. Weinrott took the advice of a vintner friend in Los Carneros and sent out a 300-word email piece about a wine. Thirty-five consumers bought the wine, and the company made $280.

Building on his background in math, four decades in the wine business and a passion for storytelling, WineAccess has transformed into a direct-marketing business with more than 2 million people receiving the daily newsletter explaining various wines. Close to 200,000 cases worth of wine were sold through the site last year.

Weinrott is set to be on the “Route to Market” panel at the Business Journal’s Wine Industry Conference on April 24. He spoke with the Journal about how “wine is sold by stories.”

Some say wineries should focus online marketing on getting to the “buy” button?

WEINROTT: They’re wrong. Here’s where they’re right: If you’re buying a commodity, you kind of know what jeans you like and kind of know your size. In most verticals of anything near like the size of wine, the brand sells the product. The brand drives the purchase.

That’s the reason why these flash sites have struggled so much and are closing businesses: They do not make money. A brand does not need a Gilt [Groupe flash site] to explain it.

In the wine business, there are two buckets of consumers: those who know what to get and those who need to be told what to get. My experience is the second bucket is bigger. People buy brands because they do not know a lot about wine.

K&L [Wine Merchants] does not have many competitors anymore. The cost of running a brick-and-mortar store is outlandish with turnover and inventory, but they do something you do not have with many wine websites. They tell consumers about wine, so when the consumer opens it at home, it is delicious. That type of retail has kind of disappeared.

In 2008 our company was pretty much nowhere, but I was tasked to talk to an insurance group in Istanbul about e-commerce. I told them everything about the buy button and ads is wrong.

Here’s a way to explain it: There was a bookstore where I grew up, and guy who owned it — call him Mr. Smith — knew about books but did not have many books. So he suggested books, and if he did not have them he ordered them. Then the King of Prussia mall opened up, and a big box bookstore opened up in mall. Barnes & Noble not only has all the books … but also no one knows about books.

In 2007 [Amazon.com founder Jeff] Bezos came to electronic Main Street and had all the books at good prices. But after a while, he realized he had no one who knew about books, so he contacted all the Mr. Smiths to come and work for him.

I believe the sale of wine is about authority and delivering on promises and stories that are intriguing and providing consumer choice. Wineries should never cede authority to the buy button. We sold 300 cases of excellent pinot noir at full price, and it was not an issue. Wineries need to build trust with customers every day. For the wine industry, the consumer needs direction. So it is all about trust.

How is WineAccess different from other online wine retailers?

WEINROTT: We’re really merchants. The biggest difference from WineAccess than others is, like wineries, we are wine people. The most significant thing is the next transaction. Sixty-seven percent buy a third time, 83 percent buy a fourth time, and it’s in high 90 percent range for the next 10 purchases. That is trust.

There is an opportunity for people to change the way they buy wine. It’s not just the 50,000 regulars on WineAccess at any time.

Is there a saturation point for wine shipped directly to consumers?

WEINROTT: That it is very unlikely. Clearly, there are very large brands. If you look at the wine industry and the number of products, it is enormous. But if you look at big brands, they tend to skew to low end and do tremendous business, but I do not think they will go to this channel. In 10 years it is going to be like the radio going to the television. There will be a colossal change, with young people more likely buy on the Web.

What else should wineries consider?

WEINROTT: Do they really understand their brand and their story? I think they do, but it’s been dumbed down by the inability to speak directly to the consumer. They lose what got them into it to begin with. Wineries are quite good when consumers go to their doors. They care, and consumers get an experience they don’t forget. If you can’t get to the consumer, then you need to select a voicebox that cares.