Wine.com Uncorks Catalog
The first drop took place this month to 70,000 recipients while the rest of the books went last week.
Recipients include corporate prospects who could ring up large orders. One group taken from 13 lists totaling 70,000 includes bankers, lawyers, executives and purchasing managers. Another group of 80,000 includes top customers of the Wine.com site in the past 14 months. These names include people interested in sending gifts based on their past purchases and those in a position to make decisions regarding gifting programs.
"This does not include a one-time buyer of two bottles of $11 wine," said Peter Ekman, president/CEO of Wine.com, San Francisco. "They are frequent buyers who have sent gifts through us in the past. This group also includes those whose addresses indicate they have their own business or work for corporations.
"An order can be as high as $45,000 when you have a company that wants to buy one bottle of wine for 2,000 clients. It adds up. Orders like that can come in from a law firm or private equity company like Morgan Stanley or from banks."
The rest of the catalogs went to 60,000 past Wine.com gift recipients and about 10,000 whom Ekman calls "the network of people that we at Wine.com collectively know and have relationships with and who are in our personal networks. We have 100 supportive shareholders and an executive team that is well-connected in the trade."
Ekman expects the average order to be $300 to $400.
"I think I will have a minimum of 1,000 orders out of this book," he said. "That would be the minimum we would expect. [The catalog] is expected to be an add-on for us, an incremental opportunity to make money. Even at less than half-a-percent [response rate] out of my mailing, it's a home run."
Wine.com customers "tend to be female," ages 35 to 45. "My customers tend to live in metropolitan areas and buy from us three to five times per year [and] six bottles per purchase at an average bottle price of $20 to $25," he said. "Think about it. Going into a liquor store is not necessarily a great experience for her. By purchasing from us, she's not hauling a case of wine up a flight of stairs to her apartment. I'm shipping it directly to her."
Champagnes Dom Perignon and Veuve Clicquot are expected to be big sellers along with the Syrah Shiraz Challenge gift pack, consisting of three Australian shiraz and three American syrah wines.
The wine clubs also are expected to do well. The catalog's clubs include the Build Your Cellar for $69.95 a month, Wines of the World for $39.95 a month and Wine Odyssey for $19.95 a month. All wine clubs deliver two bottles monthly.
The average price of an item in the catalog is $25 to $30.
The company invested $90,000, including the book's entire production and postage cost, resulting in a per-piece expense for the catalog of about 41 cents.
Plans for 2003 include dropping more than 500,000 copies. While next year's frequency and mail dates are to be determined, Ekman looks to produce summer and holiday books with each having a circulation of 250,000.
He expects 70 percent of catalog-generated orders to be placed via the Web site with 20 percent to come through the toll-free number.