In 2006, the global wine auction market grew an impressive 45% to over $240 million. These statistics are a good barometer for sales of fine and rare wine by private collectors, the source of most wine sold in the auction channel. Keep in mind, however, that private collectors sell through other channels too, including to retailers and even restaurants (often for dining “credits”). Vinfolio, for example, just signed a contract today to purchase a private cellar in the Midwest for over $400,000. Here’s a quick summary how our process works:
- We price the cellar based on our expected retail selling prices (which are almost always higher than auction averages).
- Our fee, which is effectively our retail margin earned when we later sell the wine, is factored in and the seller receives the net amount.
- Payment is made as soon as the wine can be inspected (which in this case is at the customer’s home by staff we fly out).
The result: the seller nets more, is paid faster, and the transaction is completed far quicker than with an auction house.
There are no statistics on the volume of fine wine sales made by collectors to retailers or other alternative channels. My guess is that it’s greater than the auction house channel and a clear substitute for private collectors to consider who currently default to thinking “auction” when they think “time to sell.” Hopefully we can change that mindset.
For details on individual auction firm performance in 2006, please see the Decanter.com article “US/UK auction roundup” or the Wine Spectator article “2006 Wine Auctions Break the $200 million mark."
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