12 Aug Wine 101 Wednesday – August 12, 2015: Wine Investing: How To Buy and Sell Wines
This Week In Wine 101 – Wine Investing: How To Buy and Sell Wines
Recently wine’s become a popular global commodity. Among the contributing factors are: (a) China’s growing interest in fine wines; and (b) Americans increased appetite for and consumption of wine. Now many wine enthusiasts aren’t only purchasing fine wines for consumption, they see the act of buying and selling investment wines as an opportunity to make a profit. So how does one go about buying and selling investment wines?
Like most other types of investing, when buying investment wines the objective is to buy the wine at the lowest possible price and sell the wine for top dollar. To do this, you’ll need to have the right resources for storing your investment wines; this will guarantee your investments age properly and appreciate in value. Investing in a high quality wine cellar, a temperature controlled storage unit, or renting a space from a reputable wine cellar company that offers space to store your investment wines for a certain time period, will help maintain your wines integrity, allowing them to age gracefully. For more information on the different types of wine storage facilities, check out the following article: Advantages and Disadvantages of Wine Storage Solutions.
So, how do you buy investment wines? Consider the following tips:
Why Invest in Wine? To make money? To enjoy and share them with friends or family? In any case, it helps to define your objectives.
Set a Budget. Assess how much money you have to start your collection. Some wine profiteers state that all you need is a top quality wine storage facility or wine cellar and $250 – $1,000 to begin buying investment wines. Of course this all depends on your financial situation and your appetite for risk. If you decide to retain the services of a wine broker you’ll need to take into account their fees.
Note: When you start investing in wine, you should start small and once you see profitable returns, grow from there.
What types of wines will you invest in? Will you focus on a specific country’s region (e.g. Bordeaux, Burgundy, Rhone, Champagne, Tuscany or Napa)? Will you concentrate on wines from a specific country (e.g. Spanish, Italian, French, German, Portuguese, Austrian, Australian, Californian wines, etc.)? Will you sell top fine wines or best sellers? Whatever you decide, make sure you provide detailed information about the wines you intend to sell if you pursue this activity on your own (e.g. description, size, vintage, varietal, tasting notes, price).
Are you investing for the long haul? Most wines are meant to be consumed while they are young, so if you are looking to invest in fine wines that improve with age, this process can take anywhere between five to ten (or more) years before you see a return on your investments. Another option, invest in both, best selling wines that require little to no aging and top fine wines that improve with age and have the potential to sell for a hefty price.
Do Your Homework. Make sure you thoroughly research the wine(s) you intend to invest in, and speak with a merchant that has a good reputation and an in-depth knowledge of the wine’s origin, history, vintage and more. This is especially important if you are new to the wine investment scene. Wines you think will sell for a (significant) profit may not have any future value to support your assumptions. Some wine profiteers take into account reviews by specific wine critics such as Robert Parker, Jancis Robertson, Antonio Galloni, James Suckling, along with other reputable critics.
Wine critic Robert Parker is considered one of the world’s most acclaimed wine critics and has a significant influence on the wine market. A recommendation by Mr. Parker usually drives demand for those wines, resulting in increased prices. Generally speaking, wines with excellent reviews that are produced and sold in smaller quantities, especially those from prestigious regions or vineyards, sell for top dollar, such as Chateau Haut Brion and Chateau Lafite Bordeaux’s or Richebourg and Chateau Romanee-Conti Burgundy’s.
Visit respected wine investment websites like, Liv|Ex, Vinofolio and Berry Bros & Rudd, to see which investment wines are frequently traded, when they’re expected to sell for top dollar, when they’ll peak (age & price), or when the best time to buy is. Though rare, wines from a “comet vintage,” are also highly rated and highly sought after and sell for tons of money. A comet vintage is when an astronomical event occurs before or during the harvest. Throughout the history of winemaking many believe the sighting of a comet to be a good omen. In fact, some of the most notable wines from a comet vintage are sold for a great deal of money and bear almost perfect wine scores. An example of this is an 1811 Chateau d’Yquem, which sold for over $25,000.00!
Buy In Bulk. Many buyers of investment wines recommend buying in bulk. This gives you an opportunity to try the wine yourself or save it for a later date. Plus, once you’ve sampled the wine you can communicate your experience with potential customers. If you buy wines in bulk, see if any discounts are offered and make sure to buy wines in their original cases. Many serious buyers will not purchase wines if they are not in the original case.
You can buy wine by the bottle or by the case. Cases usually come in sets of 3, 6 or 12 bottles. Another option is buying wines En Primeur, which means investing in a wine while it is still in the barrel (e.g. before it has been bottled). While the Old World wine regions, like Bordeaux, Burgundy, and the Rhône Valley, have been offering wines En Primeur for quite some time, more and more New World wine regions have started offering this as an option to buyers of investment wines. However, because the quality of En Primeur can be unpredictable, resulting in stagnant wine values or price plateaus, this method of wine investment is not highly recommended.
Buy Insurance. Wine insurance is another essential factor to consider when deciding on the number of wines you’re looking to collect and sell for a profit. You do not want to lose money because you didn’t consider the possible weaknesses or threats when devising a plan on how to buy and sell investment wines. Therefore, if you intend to store your wines in the privacy of your home, protect your assets and make sure to speak with your home insurance representative and discuss how to cover your collection for its full value. Also, if you live in an area prone to natural disasters (e.g. tornado alley, hurricanes, earthquakes, or floods) make sure your insurance company covers those types of natural disasters. CYA!
Know The Law. Check your local and state regulations to find out if there are any restrictions that will prohibit you from buying or selling domestic and international wines (online).
Be Aware of Fraud. Because wines have become exceedingly popular and demand is high, wine investing has attracted a number of counterfeiters and fraudsters. Make sure you’re speaking with those well versed in the wine investment world, only those professionals who come highly recommended and have the wine community’s trust.
‘In Bond.’ This is a term used among investment wine merchants, buyers and sellers in the United Kingdom, and is the process of having wines stored in a bonded warehouse to avoid costly taxes that can be incurred during the processes of buying and/or selling investment wines
Economy. The economic state of a country can also play a vital role in a wine’s worth. It all comes down to supply and demand. What the market demands and investors or profiteers are able to supply to their consumers for a price that will allow them to make a profit. Make sure to factor this into your plan when deciding on wines you’d like to invest in.
How would I go about selling my investment wines to make a profit?
There are a number of websites where you can sell your investment wines. Take for example these wine sites:
Through these sites you’re able to either invest in fine wines or create a profile and market the wines you’d like to buy or sell for a profit. Certain wine websites offer live wine auctions where you can post the wines you’re looking to sell to the highest bidder or set the price for your investment wines. Research which website platforms meet your needs as a buyer or seller and create a profile. Some may require that you place an order with their site beforehand or store your wines in their storage facility.
As you can see there are a number of steps you’ll want to consider before making any quick decisions about buying and selling your investment wines. It’s truly a long-term commitment that can help you learn a great deal about the wine industry, tap into a market that is growing quickly, and make money. Remember to do the following:
Do your homework and review state and local laws regulating the buying and selling of wines online.
Find a trustworthy wine merchant with a good reputation, especially if you don’t have a background in the industry. It just makes your life a little easier.
If you don’t have the proper storage facility for your wines consider the alternatives: storing your wines with a company that specializes in this area; purchasing a storage unit or facility; or building a wine cellar if you have the finances.
The wines you invest in are of great value and to ensure they appreciate in value it is important you take good care of them so you can make a nice return on your investments. I hope this article was helpful and wish you all the best!