17th June 2013
Nick Martin founder and CEO of Wineowners.com talks about why he set up the website and how it can make the experience of owning, investing in and trading wine all that more enjoyable.
Where we got the idea for www.Wineowners.com
The concept of Wineowners.com came about because as an enthusiast and a collector of wine, I found myself facing three challenges. These were –
1/ Keeping on top of my purchases, aggregate spend and current value, further complicated by having wines stored in multiple locations as a consequence of securing wines from different sources.
2/ Identifying what I needed to drink where I’d got carried away and bought too much, what needed selling and what would realise most value at any given time.
3/ Selling on parts of my collection via the secondary market was often a long-winded process, the elapsed time between a purchase and settlement often being weeks or months.
We researched the market and discovered that many other wine collectors were experiencing exactly the same issues. We decided to create a comprehensive solution to solve private clients’ wine management and trading challenges, and so was founded Wineowners.com.
We saw that most other management and trading solutions focused on the needs of the wine trade. From the outset we set out to meet the needs and delivering value to private clients with a solution designed by wine collectors for wine collectors.
How it works
Wineowners.com enables the private client to upload their existing wine collections, open a storage account where required, manage and analyse their collection and trade their wines from their portfolios. When you want to add wine to your cellar, there are three methods for doing so.
You can use the Wine Wizard to input wines yourself. You can have us do it for you. If you have an electronic copy on a common spreadsheet programme such as EXCEL or Mac Numbers you can send us the file by email. Finally if you store your wine with a professional storage facility, we may be able to take an electronic feed from the facility detailing your holdings.
We have also just completed a consultation exercise with our users and have incorporated more than 100 improvements since we first launched the service in November 2012. We now include more summary options, a dashboard, enhanced charting and comparison functionality. We have extended user preferences givingclients greater control, easy cellar filtering and brought in additional sort criteria to name but a few of the changes.
In this way, we think everyone from the enthusiast with a growing appetite for collecting through to the seasoned collector gets a total solution for fine wine appreciation and trading. A subscription to the Wine Owners platform is free and enables wine collectors to answer all sorts of questions about their wine collection. These include the following –
How much have I spent to date?
What’s a wine honestly worth if I want to sell it tomorrow?
How have my wines performed?
What should I drink now or at least drink up soon?
What do I have too much of, and what should I think of selling to make room for what I’d like to buy next?
Trading your stored wines via the exchange also ensures fast settlement, within days, rather than the more usual weeks or months. The trading process helps minimise movement of wine, helping to preserve its good provenance and its future value.
When we refer to asset management, we use it to describe the set of activities covering price discovery, review and analysis that make up fine wine appreciation. Price discovery is an essential precondition of any effective market, so asset management provides the transparency and actionable information that are preconditions for private clients to decide what to sell, what to keep, what to drink and what to buy more of.
What regions do we cover?
France is the largest part of the secondary fine wine market and it constitutes most trading on Wine Owners, but our referential database of the world’s greatest 85,000+ wines covers all the great wine regions of the world, including Italy, Germany, Spain, Portugal, Austria, Hungary, USA, South America, South Africa, Australia and New Zealand. The WO 150, our wine index. This covers what you might call blue chip wines, principally from Bordeaux and Burgundy, with some representation from areas such as Northern Italy and the USA.
How does wine compare with other investments?
Wine can offer a medium term return and like other investments the value of fine wine can go down as well. You can always drink wine and derive pleasure from it. Fine wine appreciation is a term that relates to both an enjoyable, social luxury as well as delivering a potential return. Historically wine is not nearly as liquid as other traditional stores of value, which the Wine Owners’ platform seeks to address.
Wine is not fungible, which is to say that two cases of wine are not indivisible, as are stocks and shares. History, storage, tax status and condition are the sort of attributes that make wine a variable asset class compared with stocks and shares or gold.
Businesses that make a living from wine trading are brokers and portfolio managers. But private clients can and do make good returns from wine over the medium to longer term as long as they buy wisely. Our typical clients are people who buy and sell wines, either regularly or from time to time, have other jobs that they depend upon for their principal annual income.
Who uses Wine Owners?
Like most collectible markets, wine collectors are mixed motivators. We believe we have created a platform for enthusiasts and collectors – though they can often be the very same people.
I am a good example of the genre. I am a burgundy lover, own rather a lot of it, but never consider selling after buying, except to a few friends every now and again, when I hit a spike of wine that needs drinking and I don’t have the capacity to do so! If I were to sell burgundies I would have made a spectacular return. I also love other great regions, and enjoy picking up old rieslings whenever I can find good deals for drinking. I also found that I could make some money out of bordeaux when I started to buy better wines in the early 1990s. So I tended to buy more each year for some personal drinking and buy some that could give a potential return. That in turn helped me maintain my burgundy ‘habit’.
Like many others, over the years, my motivations have become mixed. I am passionate about fine wine, and burgundy in particular, but I also like reviewing my wines in the context of the available information on them, and I also buy to sell a proportion of my claret holdings.
We think Wine Owners reflects that mosaic of motivations. Wineowners as a firm doesn’t participate in trading, but exists as a true two-way market making it easier for enthusiasts to sell, buy, search for and source fine wine.
Because Wine Owners caters for enthusiasts and hard core collectors, it isn’t easy to say how often a typical client trades. In a rising market, participants will tend to trade more than in a falling market. They are often flurries of activity, for example, when wines get re-rated by influential wine critics. Typically we’d expect on average about 5 to 10% of the value of a large collection, consisting of several thousand bottles, to be traded each year though the approach of many private investors is very much buy and hold.
Very few collectors are purely interested in fine wine as an investment, and very few are 100% pure enthusiasts, although they may start out as such.
Our pricing tools and graphs gives everyone absolute transparency of current value, performance over time, and comparative performance. Our essential content provides the enthusiast or collector with a library of information which gives them a great basis to acquire even more knowledge.
But most importantly, whatever your level of experience, Wine Owners makes owning, buying, selling and investing in wine all fulfilling than ever before.
This article is sponsored by Wine Owners