Bid, Click, Cheers: A Look at the World of Online Wine Auctions

I’m usually a red wine kind of gal. But when Jerome Zech, CEO of WineBid, points me toward a white Burgundy in the online auction currently underway with his Napa, Calif.-based company, I’m intrigued.

A few clicks later, I have the opening bid on a bottle of 2007 Louis Jadot Beaune Greves Les Clos Blanc. I monitor the action over the next few days, but with 31 bottles of this particular wine available, my $30 bid -- $10 below the estimated high -- is the uncontested winner when the auction ends. A fellow bidder, “Fred M.,” of California, has picked up two more bottles, and in WineBid’s next auction, I notice the 2007 Les Clos Blanc’s starting bid has jumped by $5 – perhaps thanks to Fred M.’s and my interest?

Such is the expanding world of wine online. Web-based auctions, which can last for a week or more and involve bidders from all over the globe, are a growing and profitable niche in the market, as evidenced by the number of companies – WineBid, Zachys, WineGavel and Acker Merrall & Condit, just to name a few – that have jumped into the fray.

Some, like WineBid, which was founded in 1996, the year following eBay, specialize in Internet-only auctions, while others use a hybrid model of Internet-based and live auctions with online bidding.

“The economy is getting better, and that’s why we’re seeing more people signing up,” Zech notes of the company’s growing base of 64,000 registered bidders.“But we’re also seeing a lot more interest from our Asia market, and we’re seeing a lot more people bidding right away. We like to see that, because that’s the most interesting part of the auction.”

Though not quite as thrilling their live counterparts, online auctions offer casual drinkers (like me) a great opportunity to experiment with their palates and pick up some great bargains, all in the anonymity of cyberspace. Via mouse and monitor, I can fantasize about having enough money to bid on, say, a 1.5-liter bottle of 1982 Lafite-Rothschild (starting bid: $7,200) as I’m upping the ante by $1 on a $30 bottle, without anyone knowing I’ve never even heard of half the stuff being auctioned.

Indeed, as ever, the Internet means something for everyone, from casual drinkers to serious collectors with cellars as big as their wallets.

“The great thing about Internet auctions is that you can buy 10 lots and walk away with a bill for less than $2,000,” says John Kapon, CEO of Acker Merrall & Condit. “You walk away with 10 lots at a live auction, and chances are you’re spending $30,000 to $40,000. It’s a different animal, and it’s a great supplement to our overall business.”

The New York-based fine wine merchant has been conducting online-only auctions for about 10 years and in January 2009 added Internet bidding to its live auctions. Kapon estimates that online auctions will bring in $8-$9 million for his company in 2011.

“It’s become a steady, important part of each auction,” he says, adding that 15 percent of its winning bids come from online. Pretty impressive, considering that a recent Acker Merrall & Condit’s Burgundy auction brought in record-setting sales of more than $4 million.

Unlike their live counterparts, most Internet-based auctions include smaller lots that may contain just a single bottle, which is a selling point for novices looking to experiment with their palate. Equally enticing is affordability. Depending on the site, you can bid in as low as $1 increments, and online offerings are typically at a much lower price points.

Consider, for example, Bordeaux-style wines, the best of which can command thousands of dollars at live auctions. By contrast, a current online auction at WineBid offered 136 Bordeaux items priced between $40 and $59.

Red lovers can also look to California wines for quality at excellent prices. On WineGavel.com, Duckhorn Merlot is currently available in 1999 and 2006 vintages for as low as $30 a bottle.

“People can find some amazing deals because of the fact that these wines are ‘previously owned,’” notes Gence Alton, WineGavel’s director of auctions and acquisitions. “And they already have age on them, which is a big part of buying and cellaring.”

More risk-taking consumers should consider white Burgundy, which has fallen out of favor as of late because of a mysterious phenomenon called premature oxidation, or premox, that negatively affects taste and has afflicted several vintages, starting around 1995 (Zech, for his part, has given me a heads-up before I bid on mine). As a result, inventory of white Burgundy is at an all-time high, especially online, which means some great deals for savvy buyers (especially if you can nab one before 1995).

Here’s hoping my bottle of Les Clos Blanc is premox-free. But even if not, it’s a gratifying reminder of how far I’ve come since guzzling cheap white Zinfandel in college, and for that, I’m already a happy bidder.

Tips for Bidding Success

1. Do your homework: Research wines you’re interested in before you place a bid, and read up on how the bidding process works. Take advantage of nifty tools offered by some sites, like WineBid’s photo-close up of the goods that allow you to see defects such as torn labels.

2. Do the math. Your bid doesn’t include the extra 15-25 percent paid to the auction house, often called the premium, shipping or insurance (usually 1 percent), so budget accordingly.

3. Watch the calendar. Bidding usually is most active right at the start and end of online auctions. Some sites offer functionality that automatically bumps up your bid by a designated increment, but if there’s a flurry of bidding at the last minute, it helps to be online and logged in.