If you are considering selling all or part of your wine cellar (or inherited collection). Keep in mind the old adage that - ‘something is worth only what someone else is willing to pay for it’. And whether it is just a few bottles or an entire collection for sale, the real success story is finding that someone that likes your wines, cannot find them elsewhere and values them.
While that is your focus - there are a few steps to address before such a person will part with any money. So what are some of the options to auction (i.e. sell) your wine. In many large cities there are established auction houses that can carry out the process from start to finish. Or today there are many who try the online, person-to-person option, or contacting their favourite fine wine retailer to place their wine on consignment and informal trade sales.
But be aware, in some cities, the ‘secondary’ wine market can be vast and decentralized. Regulations regarding the sale of alcohol vary from country, state and city, adding another layer of complexity. A good first step when considering the sale of your wine - is to check with your local alcohol authority to see what is permissible where you live.
The best option for selling your collections depends on the number and the quality of the bottles you are wanting to sell. If you go to auction, expect a few dollars to be taken off the final price - after the seller’s fees, insurance and taxes. Before you approach anyone, here is what you will need to consider - to save yourself time and money, before you put your wine on the auction block.
Has similar wine been sold at auction recently? If possible, check the auction house wine-price database. If your wine(s) have a recent history of auction sales, there is a good chance that reputable auction houses could be interested in selling them. Do some research on the wines you have, visit the wineries website, see if they have prices for older vintages, or news articles on any recent auctions. Visit Auction House websites to view their current inventory to see if they carry similar wines. If your bottles don't show up in your search, it doesn't mean they won't be accepted, but your odds are much smaller.
So how much wine do you want to sell? - Due to economic reality, most auction houses are only interested in larger consignments that will pay for their time. But this again will vary, as a smaller house in quiet months and specific wine dates throughout the year, may have no minimum value. Auction houses also take into consideration the makeup of the collection; multiple bottles of the same wine are easier to sell than single bottles of different wines. Having multiple bottles also allows designated auction staff to sample your wine to give them an idea of authenticity and how well the wine has been stored, which is extremely important for the secondary buyer.
Typically, renowned Auction Houses are only interested in bottles that have been stored in ideal cellaring conditions, or in professional-grade storage units with a regulated temperature and humidity. Collections stored in passive cellars with ideal conditions are considered, but most auction houses say those are rare. Other outlets are less strict, but still many will note how the wine was stored in the sale description notes. If you can prove your wines life story (history from purchase, storage and offering to an auction house) - plus prove ideal cellaring over the same period of time, you have a better chance of getting the bottles accepted.
Many Auction houses and outlets offer free (or minimal fee) appraisal of bottles you intend to sell. But they will ask that you make a list of your wines, where they were purchased and how they have been stored. Also, consider when you want to sell the wines (transporting your wine will cost more in summer, when temperatures demand overnight shipping) and investigate the other following costs you may incur.
Several commercial auction firms have a sliding fees scale that will vary according to the rarity, quantity, quality and condition of the wines. If a collection is particularly valuable or noteworthy, the seller's fee may be waived for a commission. If the consignment is significant, a seller's fee of about 6-8% is fairly standard. Since the final amount is negotiable, it is worth shopping around in order to get the best rate. If an auction house is interested in your lot, they will likely send you a provisional estimate (based on recently achieved prices) along with a suggested reserve price (the privately agreed-upon sum below which your wine will not be sold) and a proposed fee. Then it is up to you to decide. Some houses add an insurance charge that works out to about 1-2% of the estimate and covers your wine while it is in their temperature-controlled storage facility prior to the sale. However, if your wine is already insured under your home and contents policy, ask to obtain a waiver if your personal plan has a better rate.
Most auction houses make payment promptly after the sale-providing they have been paid by the buyer. (NB: If for some reason the buyer defaults on payment, the auction house is not liable). Unlike brokerage firms and corporations, auction houses do not issue tax forms on their sales. So it is up to you and your accountant how to handle the tax reporting of any profits.