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Screaming Eagle '97 Trades for $69,100 on WineCommune.com
WineCommune, which hosts an average of 1200 wine auctions a day, allows sellers to reach a large wine buying audience, and buyers a wide selection of wine from many sources. WineCommune has become the main storefront for many retailers and wine brokers as they are given access to its 4,500 plus registered user base.

The two lots of Screaming Eagle 1997, both hosted by the same seller, were sold this past month; the first on September 13, and the second on October 2, together totaling $69,100. "[The second lot] was the highest bid we have ever registered," said WineCommune's CEO and founder, Michael Stajer. Each lot was active for five days. "This past month, we reported the highest number of unique visitors per day due in part to the Screaming Eagle lots," claims Stajer.

The first lot of twelve bottles spawned a fierce competition between two bidders but eventually sold to an anonymous buyer for $24,000. The second lot of 24 bottles sold to the same buyer for $45,100 with a total of twelve different bids. The seller, Worldcellar.net, a licensed wine merchant from Oregon represented three businessmen from Silicon Valley in the sale. Marvin Mills from Worldcellar.net who hosted the lots is an active member of WineCommune having sold over $100,000 of wine from his business this year. Mills was quoted as saying, "WineCommune is the easiest place to sell wine since it reaches such a wide audience. I was really pleased with the results of our lots."

Buyers log onto WineCommune at their leisure, review the available wine lots, and bid on those that interest them. A buyer also has the option of requesting a wine on the system. The buyer posts information on the wine they are looking for and the price they are willing to pay, sellers log on, browse the listings and can then bid to sell wine to that buyer. The buyer watches as sellers offer lower prices to "win" the auction.

In Q3 2000 WineCommune posted and closed 6 lots of Screaming Eagle 1997 with a low of $1,340 per bottle to a high of $2,000 per bottle, at an average of $1,811.04. Nine lots of Screaming Eagle 1996 have sold with a range of $1,166.67 to $1,466.67, at an average of $1,315.15.

The far reach of the Internet unites wine lovers from different continents giving sellers access to the largest possible audience, and buyers access to the wine they might not otherwise find locally or for the right price. Said CNN Correspondent, Rusty Dornin in the May 19th article titled, Small vineyards attract a cult following with pricey vintages, "If nearly nobody else has it, then someone will pay a lot of money for it, which is why Internet wine auction sites like Winebid.com and Winecommune.com are full of speculative sellers."

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Liquid Assets Wine: An All-Consuming Investment
By Viktorya Tobak, CBS.MarketWatch.com
Last Update: 6:52 PM ET Oct 16, 2000

SAN FRANCISCO (CBS.MW)-- Move over GE and Intel, there's a new blue chip in town. And this one is very liquid. From Screaming Eagle to Petrus, collectible wines have become increasingly accessible to both consumers and wine investors with the proliferation of Internet wine auctions.

For years now, wine auctions have matched buyers and sellers looking to broaden their wine portfolios.

Far too often, though, connoisseurs looking for that perfect bottle had to search retail outlets or wait for their existing wine to peak. But commercial Internet wine auctions have since empowered oenophiles with the ability to research, price compare and buy collectible wines.

All with the click of a mouse

Now, because of the Internet, wine investing is likely to flourish, moving beyond its reputation as a high net worth hobby. Online auctions for wine are drawing attention from both everyday consumers and serious collectors by cutting costly travel, shipping, and storage costs. Several sites catering to wine collectors offer storage of young wines, allowing investors to resell the wine at a later date -- and a higher price -- without physically moving it. A virtual cellar, you might say.

From clicking the mouse to popping the cork

Analysts say the strong economy has given a boost to wine auctions as well as the industry overall. But as all retailers know, convenience and choice are major factors for all consumers -- and the wine lovers are no different.

"Right now we're in a very strong economy and the vintners can hardly keep up with demand." Says Gladys Horiuchi, spokesperson for the Wine Institute, a public policy group representing nearly 450 California wineries. "Consumers are demanding both premium wines as well as wine futures right now and the Internet is certainly giving them more choice. However, the key in Internet sales is trust and information. Both consumers and collectors of wine need to know that a site specializing in wine will be able to provide quality products."

Which great wine appreciates faster? What cult wines are hot right now? Investors new and experienced want to know. They also want lower prices and more convenience. So while Christie's and Sotheby's have historically had a stronghold on the market, start-up wine auctions models are not only pulling away potential customers but also forcing the traditional houses to adapt to the Internet age.

"There have been two phases in wine auctions," explains Thomas Matthews, executive editor of Wine Spectator Magazine, "First, in 1994, the wine auction business really exploded with traditional houses like Christies and Sotheby's. Then in 1996 the first wine auction occurred on Winebid.com and that business has multiplied. The online houses have not had a huge impact in the overall business but they have expanded the consumer base. Online auctions have made wine collecting accessible to everyone."

Christie's has lost several of its wine department executives to dot-coms and has since begun releasing sales results online. It also offers an online service called "Lot Finder" that identifies specific wines before they go on the auction block. Sotheby's has also launched a Web strategy that includes an auction catalog along with an impressive search engine.

According to Wine Spectator Magazine, the value of online wine auctions has jumped from $14 million in 1993 to nearly $100 million in 1999. Although online wine auction revenues are difficult to measure, they are estimated at $10 million for last year and will most likely exceed that figure in 2000.

Signs of the times

Just like with stocks, individuals are turning to the Internet for cellar-worthy wine. Sites such as Winebid.com, Uvine.com, and Auctionwineonline.com are all seeing traffic from consumers who value their benefits. Those would include the ability to research, lower commissions, immediate email alerts, and the ability to buy from anywhere, anytime.

Another popular site is Winecommune.com, a site where buyers and sellers interact with each other directly.

"The Internet is truly changing the way people buy and invest in wine," says Winebid CEO Orin Michaels, "Not only has the Web made it easier to learn about wine and make wise decisions, it has also made the whole process more efficient -- from price to storage. Investing in wine is something that has traditionally been reserved for the high net-worth individual but that will likely change because of the Web." See the interview with Orin Michaels

Meanwhile, the king of all auction sites, EBay prohibited the auctioning of alcohol on its site late last year due to tight regulation. But its EBay-style oddities and selection that make the Internet so appealing. And, when it comes to wine, more seasoned collectors have been frustrated in trying to find the same type of choices available in online auctions of other goods.

While it's true that the convenience of online auctions is a major draw, there are still some issues that have to be worked out before this market can take off. For one, the market seems flooded with sites. There are more than three dozen online wine auctions companies -- nearly three times the number of traditional houses. Consumers should also consider the level of control individual sites exercises over their lots as well as well as commission fees (which are almost always lower than traditional auction houses). Some sites only deal in full lots while others allow bids on single-bottle lots as well.

Also worth noting is the fact that using the Internet to invest in wine is easier than using it to purchase wine for everyday consumption. That's because Prohibition-era regulations designed to protect suppliers, wholesalers, and retailers prevent consumers in more than half the states from receiving wine shipments from other states. That's something investors with virtual wine portfolios don't have to deal with.

So how does one know when to hold or sell? Wine Spectator's Auction Index is a good resource for those looking to profit from collecting fine wines. The Index tracks the value of the auction market as a whole by valuing representative wines, much like the Dow Jones Industrial Average does for the stock market.

The wine industry is making a grand push to be a part of the new economy. How quickly that will happen depends on both consumer demand as well as any change in current legal regulations. Internet wine sales are expected to account for nearly $3 billion -- or up to 10 percent of all retail wine sales -- by 2005, according to a Salomon Smith Barney study.

"It is possible to make money investing in wine if you pick the right wines, have good storage and choose the right moment to sell. But its not easy." says Wine Spectator's Matthews. "We don't advise people to look at wine as a real money maker. It's always nice to buy wine at $10 and open it up 20 years later. Even if the investment falls, you can still drink it."

Most importantly, says Matthews, a wine collection should be a reflection of the consumer. He advises consumers to buy what they like because developing a wine cellar has become a new hobby much like starting a home gym or nice entertainment center. In other words, don't focus so much on the monetary return.

"Have fun because the odds are you'll end up drinking it."

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