Thursday, June 16, 2022

How To Sell Whiskey On The Secondary Market

Investing In Whisky: A User’s Guide

Bourbon Prices and the Secondary Market – What is Going On?!

Investment whisky like The Glenrothes 50-Year-Old, a marriage of sherry cask and ex-bourbon barrel … whiskies, is a growing trend that’s been growing exponentially since 2015.

Courtesy of The Glenrothes

In celebration of The Glenrothes Distillerys release of their oldest and rarest whisky to date, a 50-year-old single malt scotch barreled in 1968, the fabled whiskey house assembled a panel of the worlds leading experts who explain how the collectible spirits market works.

Only fifty bottles of Glenrothes 50 Year-Old were made available globally, with a price tag on this rarest of liquids resting at $35,000. While most of us could never consider such a purchase, collectible super-luxury spirits, referred to as investment grade whisky in the business, has rather suddenly emerged as a major player on the auction markets. Rare whisky 101, which is considered the industry standard, reports the number of recorded bottles of Single Malt Scotch Whisky sold at auction in the UK in 2019 increased by 33.37% to 143,895 from the previous year.

To flesh out how the collectible market works, these professionals offer insight into building a whisky collection for investment based on five factors: Research, retail sourcing, determining secondary-market prices, spirits auctions, and insuring a collection.

Like any investment, awareness of fluctuations in the whisky market helps collector’s make wise … purchases.

Courtesy of Duncan Fox

Tiers Of Allocated Bourbon

I have ranked these bourbons based on how hard it is to find and obtain. Obviously, these may vary regionally, according to the season and the total amount of bottles sold. And realistically, some brands are more coveted then others.

Youll see that many Buffalo Trace items are listed as Tier 1 items, but thats just the way it is with as many fans that BT has.

Tier 3 Allocated bottles that are somewhat easy to find and could be found on a shelf in most cases.

These are dependable annual releases with most having multiple releases per year.

Tier 2 The difference between Tier 3 and 2 is that Tier 2 items are typically more expensive and may only be released once a year.

Also, Ill include distillery-only releases in here as well because unless you live in Kentucky, then its not fair.

Tier 1 These are the hardest to find allocated bottles and the ones that command the highest secondary prices.

Youll realistically not find these bottles on the shelf. Youll always have to know somebody to get them.

Inside The World Of Black Market Bourbon

June 29, 2020 | Sean Evans

The term flipper sounds so bad, Paul H.* groans after I casually refer to him as such. As the midday sun streams in through his kitchen window, he leans back against a folding table thats overflowing with whiskey-shipping supplies, running a hand through his bed-head hair. I sell high-end whiskey as a middleman, he clarifies. My eyes drift to ogle another table full of enviable whiskiesHirsch Select 25, Sazerac 18, and Hibiki 21 year olds. Pauls makeshift processing center is not what youd call tidy. Childrens books, plastic bags, and crumpled cash fill the occasional voids between the rare bottles packed upon the stained table.

But I never feel bad about selling whiskey, Paul admits. Its like walking into a store, seeing 10 lotto tickets, one of which is a winner, and taking any of the nine losers. You dont leave winners on the shelves. Im not ruining whiskey. Im not the reason people cant get Van Winkle. Im one f******* person. I dont have that much power.

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The Bourbon Gray Market

A couple of months ago FiveThirtyEight posted an article about the secondary market in the sneaker industry. Now, Im no sneakerhead but the article was extremely interesting and I couldnt help but draw comparisons from what is going on in the sneaker industry to the current bourbon market. The sneaker industry releases special edition shoes to which people camp out for, riot over and in general go a little too crazy over what is, in my mind, just a shoe. Sound familiar? Nike releases special edition Air Jordans which are by far the most popular and bring the highest secondary prices. However, there are other releases like the Lebrons, Kobes and KDs that also fetch multiples on MSRP on the secondary market.

Heres how I see the bourbon secondary shifting:

Like it or hate it limited edition bourbons are sold on the secondary market on sites like Bottle-Spot, Facebook groups and Craigslist every day. The mysterious bourbon flipper is the most hated figure in bourbon today. Cant find Pappy? Blame the flipper. Store increased their prices? Blame the flipper. Distilleries increasing prices? Blame the flipper. I think of a flipper as someone that doesnt even drink bourbon and purchases solely for resale. I think this is a very small percentage of the market but increasing. Whats also increasing is the bourbon opportunist The guy that is in to bourbon but can fund a year of purchases with the sale of one bottle of Pappy.

Whats the most expensive bottle right now?

The 12 Most Commonly Flipped Whiskies

The Chuck Cowdery Blog: The Whiskey Secondary Market Doesn ...

For all his proclamations to the contrary, most whiskey lovers would call Paul a flipper. He doesnt drink. He doesnt have another job. He sells and ships 30 bottles in a good week. He boasts that he can get you any bottle you want within 24 hoursany bottle. He claims hes the first call most retailers make when their allotment of allocated whiskeys arrives. He has spent fifteen hours a day driving around, hitting up scores of liquor stores across multiple states. Hes braggadocious until pressed on the intimate details of his operation. Man, youre not the IRS, right? he nervously chuckles in reply to my string of questions surrounding his sourcing of vintage whiskeys. His suspicion aroused, I tell him Im both a whiskey lover and a journalist investigating the state of the bourbon secondary market. I dont know how I feel about being included, replies Paul.

Owen Powell founded the Bourbon Secondary Market, which had over 55,000 members when it was shut down by Facebook. He now has his own whiskey brand.

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A Broken System Still Works

Bourbon has become a commodity, Paul surmises. Some of us choose to use it, whereas other people stockpile 900 bottles in their basement, like thats a normal thing to do. Everyone started getting upset like it wasnt a commodity. The real question is if youve got a $300 bottle that can easily command $2,000, who should be making that money? The distiller? The distributor? The retailer? Flippers? And should they be required to do it legally?

Its impossible to separate the secondary market from the maelstrom of negativity that hovers over it, but redeeming tales of camaraderie, benevolence, and sacrifice are also omnipresent. Many whiskey lovers have forged lasting friendships with secondary-market strangers from other states, some of whom began traveling to meet in person for bottle shares. Others have established symbiotic cost plus shipping relationships where allocated bottles common in one region are swapped, without profit. There are plenty of good folks in these groups, says Michael V. People in it are just trying to help each other find great whiskey.

Attorneys General From 46 States Sign Letters

We believe that everyone has an ethical and moral responsibility to protect consumers, especially those who are most vulnerable to fraud. Self-regulation and self-policing to prevent illegal and unfair trade practices and ensure consumer safety are minimum responsibilities for your respective companies. You have the technical prowess and power to accomplish basic protections against illegal sales, reads the letter signed by 46 state and territory attorneys general, including NAAG President Jeff Landry and Aaron Frey .

The attorneys general asked the vendors to take the following steps:

Review the current content posted to their companies websites and remove illegal postings for the sales and/or transfer of alcohol products.

Develop and deploy programming to block and prevent users of their platforms from violating state law by posting content for the sale and distribution of alcohol products on their websites.

The attorneys general also asked the vendors to establish a working group with stakeholders to discuss and establish realistic and effective protocols for internet platforms and content providers related to illegal and unlicensed alcohol sales via digital platforms.

Which States are Missing?

Well save you some time from searching the entire list by state. Turns out Puerto Rico and Washington, D.C. attorneys have signed the letter. The states missing from the list are Alaska, Arizona, California , Missouri, New Hampshire and Wyoming.

Menlo Park, CA 94025

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Have A Bottle You Want To Sell Here Are The 4 Best Ways To Offload It

By: BottleBlueBook

Update: As of recent Facebook has and is actively shutting down all groups that were involved with buying and selling and other online trading spots have closed up shop as well. Check out our latest article for another means for selling your collection.

If set in present day, Jed Clampett would be better off if up from the ground came a bubbling Pappy Van Winkle. Although this would make for a terrible TV show theme song, its hard to argue the fact that Bourbon is becoming the equivalent of gold . But, you likely already know all of this or why else would you be here in the first place. This allows me to bypass the Bourbon is booming speech, and we can also move past the facts and figures detailing its scarcity. You already know that it is rare and it is no longer just the Premium bottles are missing on those liquor store shelves .

Very often we are approached by our members with one of two questions that are directed differently, but ultimately share the same goal, I have/want a bottle of XXX, how can I go about selling/buying it? What theyre referring to of course is the Secondary Market, and unfortunately finding it isnt as easy as shopping on Amazon. Im sure it comes to no surprise that the Secondary Market is not one, but a conglomerate of multiple outlets someone can use to buy or sell Whiskey that is rare, or sometimes impossible, to find sitting on the shelf of the local liquor store.

Social Media

Brokers

Bourbon Clubs

Attorneys General Across The Us Cracking Down On Illegal Secondary Market Online Sales Of Alcohol

What Even IS the Bourbon Whiskey Secondary Market & WHY Does it Matter? | Video Podcast #6

As the holiday season kicks into full gear more and more people will be trying to get their hands on that impossible to find bottle of bourbon, whiskey, tequila or whatever spirit their heart desires. Rather than arriving at the liquor store at 4am in 30° temperatures and standing in a line that wraps around the building many people choose to do their shopping from their easy chair by visiting their favorite website to search the secondary market to find that impossible to find hooch.

In that search many will turn to social media sites like Facebook, a bidding site like Ebay or an everything is for sale site like Craigslist. Any online purchase is buyer beware but when it comes to consumables theres additional risk. Its possible what you are buying is the real-deal but its also possible that bottle with the sealed cap is filled with a lesser product or one that had been adulterated to give the aroma and appearance of the real McCoy.

A quick online search shows things are easy to find online. The Pappy Van Winkle Collection for $15,000 or even an empty bottle of Pappy for $249? Hmm. Caveat emptor = buyer beware.

In an effort to help curb online sale of alcohol by non-licensed sites the National Association of Attorneys General sent letters to leading U.S. online vendors, asking them to undertake certain steps to curtail illegal alcohol sales online.

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The Market For Selling Whisky In 2021

The market for bottles of rare single malt whisky has remained buoyant even throughout this turbulent year. Bottles continue to break records and distilleries continue to release new and unique bottlings.

As you are probably aware by now, the market for single malt scotch whisky has risen dramatically over the last few years. There was huge growth in 2020 for certain bottles through lockdown and this growth has continued through 2021. A good example demonstrating just how much the market has risen is Macallan Private Eye. It was first released in 1996 with a retail price of £36. It was a limited edition of 5,000 bottles and was advertised for sale very widely across national newspapers.

Just 11 years after release the value had jumped to £240 at auction quite a healthy 566% ROI. Jump forward another 10 years to 2017 and the auction price had jumped again, but this time to £1,500 .

The market then took a real leap and the market reached its peak in October 2018 with prices for Private Eye reaching a staggering £4,000 . This moment also marked a turning point for the market. Prices have been gently falling ever since as the market has become saturated with bottles.

In early 2021 we have seen the price of Macallan Private Eye jump to around £4,000 to £4,500 proving the appetite remains for this bottle.

Selling Whisky At A Traditional Auction

We cant write a guide to selling whisky without mentioning the traditional bricks and mortar salerooms, as they were the birthplace of the resale market for whisky. Although they used to have a monopoly on the market, all of the above options have really eaten into their dominance and traditional auctions are now sadly in decline.

High commission rates for buyers and sellers and the lack of focused marketing are the main reasons for this demise.

Many of the traditional salerooms sell antiques and collectors items as their mainstay, with whisky being a small part of their calendar of sales. As such, their marketing budgets for whisky are often not as high as the online options so they do not achieve the same reach to the specialist buyers and often dont achieve the best prices.

The real nail in the coffin for the traditional salerooms though is the commission they charge both the buyer and seller. Standard selling fees are 18% for the seller AND 28.8% for the buyer. What that means is you only receive 53% of what the buyer had to pay for your bottle. The high buyers premium is taken into account by buyers and as such they reduce their bids accordingly.

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How Has Brexit Affected The Industry

The issue of Brexit has been at the forefront of the minds of many whisky brokers, dealers, retailers, and distilleries. So, now that the deadline has passed, how will Brexit affect the whisky industry?

Brexit has caused many delays in shipping due to additional customs data being needed when shipping packages to the EU. As such, many parcels of whisky have been turned around at the border due to insufficient customs data. This has caused huge delays and frustration as it is, presently, very difficult to ship goods out of the country.

In addition, goods coming from the EU to the UK are now subject to import duty and tax. This has caused a stir in the industry, as EU citizens were not liable for duty and tax on goods shipped to the UK pre-Brexit. The passing of the deadline means additional costs for exporters.

In the wake of Brexit, whisky exports to the EU have declined by 63%, a huge blow to the industry. Other industries that have suffered include fishing , beef, pork, and cheese. In fact, all 10 of the top food and drink exports have seen a decline.

The good new is that shipping within the UK has remained the same, meaning that internally the industry is carrying on relatively as normal. The US also suspended its controversial $7.5 billion tax on EU exports. The Scotch Whisky industry bore the brunt of these taxes exports to the US fell by 35% and whisky companies lost over £500 million. The suspension on tariffs prompted a collective sigh of relief from the industry.

The Most Experienced Old & Rare Team In The World

ISO a secondary market for George T Stagg 19

Our buying team is led by The Whisky Exchange co-founder Sukhinder Singh, who has been collecting and trading old and rare whisky and spirits for more than 30 years and is regularly called on to consult for distilleries and auction houses. We are passionate about fine spirits and would love to buy your bottles. Click here to request a valuation.

Fact

We Bought More Than £10 Million Worth of Old and Rare Bottles in 2018 alone

The global market for these spirits has grown significantly in recent times, with the value of rare expressions more than doubling in the past few years alone. The Whisky Exchange has an enviable reputation as a leader in this field:

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Selling Whisky Via Our Auction Coordination Service

Following the rise in the value of whisky, coupled with the need for a legal way for the public to sell whisky online, a few entrepreneurs set up specialist, online whisky auctions. They started to appear around 2010 and grew in number each year. As of 2021, there are over 20 specialist online whisky auctions and they can be a great place to sell your whisky online. The main of the specialist online auctions is to help you sell whisky online, but how do they achieve good prices when they only sell whisky online?

These auctions cater only to the sale of whisky and as such are able to be very targeted with their marketing. This had the result of opening up the whisky market to the world as the sale and purchase of rare bottles of whisky became more accessible and user friendly. The significant increase in the value of whisky from 2010 onwards can certainly be attributed, at least in part, to the rise of online auctions, but arguably their most important asset is the fact they are completely legal!

We have partnered with one of the leading online whisky auction houses to provide a service that helps our clients get their bottles to auction quickly and efficiently. Once your bottle is at auction you can watch live as bidding commences and your bottle passes to the hands of a new owner.

If you are interested in selling your bottle through our service then please email some images of your bottle standing upright to

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