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October 24, 2009

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Lewis Perdue

Very nice summary. Very!

Mike Duffy

Thank you, Lewis. Given your stature, that means a lot to me.

Jon Bjork

When I took a tour of NVL last year, they showed us banks and banks of empty pallet racking going up nearly to the roof of their two-story warehouse. They said it was mostly for expansion to accommodate a large client they refused to name.

Their automated systems with quality-control checkpoints were truly state-of-the-art and looked to be somewhat under-utilized when I was there.

I'd therefore doubt that the warehouse-pick-pack operations side of NVL would have had any problem handling Amazon.

I think what really sunk the deal between Amazon and NVL were delays related to Amazon handling interstate compliance (as you mentioned) compounded with a huge drop in business from the winery clients of NVL. If Amazon had their act together earlier, NVL would probably still be viable.

Looking at the case boxes and pallets of wine that were stored for NVL's clients, and knowing most of those were Napa Cabs going for upwards of $50/bottle, they were the first to see shipment quantities drop off in 2008.

Mark

Seeing how my company has the challenge of starting as a 3rd party wine club I can definitely see the difficulty involved in shipping as a 3rd party. Best case scenario for us to to ship to around 24 states at launch, which is about 65% of the wine drinking general public. Not bad for us as a 2 person operation, but again not great if you're Amazon and have the logistic difficulties they would inevitably face because of their size.

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