Although we would all prefer to sit on a shaded verandah sipping fine hand-crafted wines that spent years in our cellars, it must be said that wine can make for a great financial investment too. However, to make money from buying, cellaring and selling wine you first need to know a little about it. As with any other investment including property or shares, you need to know what you’re doing – at least to some extent.
We recommend you visit your local library first to discover the differences between the varietals (types) of wine, then compare average prices for different styles and regions where wines are produced. You can research prices online, at the local bottle shop or in certain wine books including Jame’s Halliday’s many Australian-focused publications. Understanding your product is the first key. To this end, we also recommend you taste as many wines as possible. This will increase your knowledge and experience with different varietals, making you a stronger and more confident wine guru.
Step two. Buy wines. Get your hands on as many great deals as you can. Being sensible, you might choose to buy wines ‘on the cheap’ at first – sensibly avoiding the urge to spend with your heart rather than your head. Like any product, wines can be expensive so select with care and only expend what your budget allows for. Select wines that will cellar well (red wines are obvious winners and a nice selection of wooded white varietals including chardonnay or semillon would set you on the right track). If you’re not sure whether a wine will improve with cellaring (which will eventually create a profit for you), then you should research it first or simply not purchase that wine. A little prudence will go a long way…
Be warned now: store your wine bottles carefully or risk spoiling the magic that lives inside. There are many refrigeration systems available, so shop around and find one that meets your space and cooling needs. Install the fridge, fill it up and monitor the temperatures regularly (an extreme pessimist, I admit to checking mine daily, however once a week is probably enough). If it breaks down or is running inefficiently, get it fixed pronto. Your key mission should be to protect your investment at all times.
Keep an accurate record of your investment. Treat your cellar like a retail store – keep complete records of what comes in, what goes out and calculate your profit and loss and any wastage. Depending on your country’s tax requirements, you’ll most likely have to claim your sales against some kind of tax, so do check before you purchase wine with the intention of one day selling it. Additionally, you must remember that in most countries it is illegal to sell any alcoholic beverage without a liquor licence.
Online auction sites like www.langtons.com.au allow you to auction your wine without having to register a liquor licence, which can be expensive. I personally recommend Langton’s wine auctions – I have been a happy customer for many years.
Try to ship your wines to the auction house in batches of at least 12 bottles to reduce the shipping cost. Remember to check the percentage cut the auction house intends to take (they often call it “seller fees”). Remember to keep a record of shipments to auction houses, in case you need to claim insurance for damaged goods. Always insure expensive shipments.
Then, once the wines sell (with a little luck and a persistent market demand), you can expect to bask in some kind of profit. While it’s unlikely that you’ll make the Top 100 Richest List overnight, you’ll definitely make enough to put towards a neat annual holiday to some exotic location.