Online-only wine store grows local customer base

Tom Natan’s wine shop is not really a store at all. A chemical engineer and oenophile himself, Natan’s business brings imported French, Spanish and Maltese wines directly to customers — but he operates entirely without a storefront.

Natan didn’t exactly plan it that way.

Six years ago, he was introduced to a co-worker’s husband who owned a vineyard in Provence, France. The grapes from that vineyard were sent to a nearby winery run by a village cooperative, and Natan discovered the resulting vintages had yet to make their way to the United States.

So he reached out to several winery owners, and leveraged his personal relationships to exclusively import their wines to the Washington, D.C. area.

When he applied for his wine retail license, he had planned to open a brick-and-mortar specialty wine and food shop. Then he noticed an important loophole in the D.C. liquor code allowing him to save on the overhead costs and rent. “There’s no requirement that you have a physical storefront [for a liquor store],” he said.


First Vine is highly selective in its imports — it currently only carries wines from Spain, Malta, and France — and sells exclusively online. (MARTIN BERNETTI/AFP/GETTY IMAGES)

The code did, however, require that the retail license be associated with a particular location, so Natan registered the license to a Security Storage Warehouse in Adams Morgan where he keeps all his imported wines.

The unconventional arrrangement means Natan cannot access his own inventory without calling in advance, and he is then escorted to his storage space. Warehouse workers load his car with bottles of wine for him — he then personally delivers the wine to his customers within the District, often paying for the transportation cost himself.

Most of his customers buy their bottles from his Web site, FirstVine.com, after having sampled the wine for free at local retail shops and restaurants like Mount-Pleasant dress shop Nana, U-Street’s GoodWood, and Hill’s Kitchen near Capitol Hill – all businesses Natan has approached and asked to partner with.

First Vine delivers usually within 48-hours of an online order, depending on the availability of the customer.

But as liquor laws generally vary by state, Natan must tailor his delivery model outside the District depending on the home state of the customer. State liquor laws sometimes require out-of-state liquor to be shipped by a “common carrier” – for example FirstVine uses FedEx, an approved common carrier, to ship to Virginia. First Vine can deliver to D.C., Virginia, California and parts of Alaska – shipments to 17 other states can be made through Vinoshipper, an online wine-shipping site.

Despite the complex state liquor laws, Natan prefers online retail to a brick-and-mortar storefront. In a good month, FirstVine receives 50-60 orders, each generally for six or more bottles.

“I don’t have to be sitting in a retail shop. I process the orders as they come in, and make deliveries when it’s convenient for the customer,” he said.

Most of his customers are people who enjoy wine with dinner multiple times a week and want to buy several bottles of wine for $10-15 each—this pattern accounts for 75 percent of sales, he explained. Another significant chunk of his orders come from local caterers.

Natan has created a multi-pronged marketing strategy. Though his retail license prevents him from selling his wines on the spot at the free wine tastings, which usually happen twice a month in the summer, Natan draws some orders at these events. (He noted that July and August are his slower for business because potential customers are on vacation – February and November months are busiest.)

First Vine participates in the Washington Wine and Food Show in February, where his retail license allows him to sell on site. Additionally, First Vine offers wine tasting at events through the Alliance Française, a French language and cultural center, to reach the Francophone community who might crave French wine. Natan also maintains a blog about the wines and food pairings on the First Vine site — he keeps about 1,500 customers informed through the First Vine listserv.

Yet, Natan noted the downsides of his sales model. For example, First Vine doesn’t get any impulse buyers, and he can’t physically introduce new wines to the customers if they stumble upon his site. He also has to purchase all the inventory in advance before he knows if he can sell them – he usually makes three orders of 25-50 cases each from overseas wineries every year. The shipments take about six weeks, and upon arrival the wines need to sit or settle for another three weeks before sale.

As of 2011, his business is just breaking even.

He has considered soliciting outside funding, but doesn’t think it will be fruitful. Investors might “have a hard time grasping a store without a storefront,” he said.

However, Natan said he doesn’t think he imports enough wine to be a full service brick-and-mortar wine shop.

“People would be looking for more variety than we could offer in a wine shop. We would have to amp up our selection, though I’m not averse to doing that,” he said.

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Mohana Ravindranath covers IT and small business for the Washington Post and its weekly Capital Business publication.
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