INVESTING - 4 MIN READ
The Ultimate Guide To Wine Exchanges (2020)
This article contains:
(Click on the links below to jump to a specific section)
- What is a Wine Exchange?
- 3 Best Wine Exchanges.
- Pros and Cons of Trading Wine through a Wine Exchange.
- How to Invest in Wine Easily through Vinovest.
Let’s dive in.
What is a Wine Exchange?
A wine exchange is a peer‑to-peer online marketplace for members to buy and sell wine from anywhere in the world - be it from Bordeaux, the Tampa Bay area, Orange County, downtown St Charles or Napa Valley.
You can trade wines with private individuals, syndicated groups, and wine funds - without having to go through brokers, merchants, or auction houses.
Note: Any restaurant or wine shop that has “winery exchange” in its name, is not a wine exchange.
But which wine exchange should you choose?
Choosing the right platform to trade wines may seem confusing as there are so many options to choose from.
Let’s take a look at some of the most popular wine exchanges today.
3 Best Wine Exchanges
Here are the top three online platforms for wine trading:
The London International Vintners Exchange (Liv-ex) was founded in 2000 and is one of the most popular wine exchanges today. It’s an online and telephone-based platform to provide prices and market data, trading, and settlement services for wine trading. This service is meant for approved wine merchants, and not for private collectors.
Cavex, launched in 2013, is another wine trading and portfolio management platform for wines stored in UK bonded warehouses. You can buy wines and have them delivered to your bonded storage, or you can sell them and arrange delivery to the buyer’s bonded storage provider.
3. LiveTrade by Bordeaux Index (BI)
This online wine trading platform was launched by the fine wine and liquor merchant BI Wine and Spirits in 2009 for individuals and wine merchants. They provide real-time updates on liquidly traded Bordeaux to capitalize on the best prices.
Besides the above three, there are several other wine and spirits exchanges, including Brooklyn Wine Exchange, Wine Owners, and Berry Bros & Rudd, that you may want to try out.
Just make sure you read up customer reviews and complaints on websites like Better Business Bureau to make an informed choice!
Trading great wines through these exchanges may seem as easy as picking up a bottle from your local wine store.
But, is there a flip side to it?
Pros and Cons of Trading Wine through a Wine Exchange
Here’s a look at the benefits and drawbacks of investing via wine exchanges:
1. Greater convenience.
You can trade high quality wine bottles via a secure platform from the comfort of your desk - which is incredibly convenient and transparent.
2. Faster transaction times.
Most wine exchange platforms offer rich, up-to-date content (prices, market news), and efficient portfolio management tools. This way, your transactions take place in minutes!
3. Lower commissions.
Some wine exchanges (e.g., Cavex, LiveTrade) charge lower commissions than the 10% (or more) charged by an auction house or a winery. However, you will have to pay the delivery charges, duty, and VAT.
1. No scope for personalized service.
Most wine exchanges operate as independent trading platforms and don’t offer any personalized investment advice. If you’re inexperienced in the wine market, you could find it difficult to invest well.
2. Need to do your own research and portfolio management.
You will need to conduct your own research on vintage performance, current prices, and so on. You’ll have to manage your own portfolio, including deciding when to buy and sell.
3. Most wine exchanges don’t offer insurance
Most wine exchanges will deliver your wines under the insurance of your delivery provider or export shipper.
4. High transaction fees
In most cases, you have to pay transaction fees ranging from 2% to 6% and additional settlement fees for delivery.
5. No trading of en primeur wines.
Most wine exchanges don’t allow en primeur wines to be sold. (En primeur investing allows you to buy "wine futures" while the wine is still in the barrel.)
6. Some wine exchanges don’t offer storage.
In some cases, you’ll have to set-up a personal wine cellar with stringent climate control or arrange storage in a bonded warehouse. All of this can cost tons of money - pushing your overall investment cost higher.
So the real question is -
Are wine exchanges your best bet when it comes to investing in wine bottles?
After all, how many of you would want to research wine prices, arrange long-term storage, and sell them - all on your own?
You’d be better off using an option like Vinovest to invest in wine without any hassles.
How to Invest in Wine Easily through Vinovest
Vinovest is an online platform that lets you own and sell investment-grade wines from anywhere in the world.
How does it Work?
All you need to do is go through a simple process:
- Sign up on the Vinovest website.
- Complete a questionnaire on your investment horizon and risk tolerance.
- Track your wine investment portfolio.
- Add money to your investor account.
Benefits of Investing in Wine through Vinovest
Vinovest researches, authenticates, buys, stores, and insures your wine for you.
Here are some of the key benefits of using it:
1. 1-on-1 expert guidance
You can consult Vinovest’s experts with any questions you have - be it about their wine investing, your portfolio, or your passion.
2. Curated portfolio and management.
Vinovest’s Master Sommeliers combine their expertise with Artificial Intelligence-driven investment algorithms to do the hard research and number crunching for you. So, you get a carefully curated portfolio of investment-grade wines, including en primeur wines.
3. Full Insurance:
Vinovest is insured with an FDIC (Federal Deposit Insurance Corporation) equivalent for wine - so, you get a full insurance policy at market value.
4. Low Fees:
Vinovest charges lower fees than most other wine investment management firms - a 2.85% annual fee (2.5% for a portfolio of above $50,000). This fee includes wine purchases, fraud detection, storage, insurance, portfolio management, and selling.
5. Vinovest handles the storage for you.
Vinovest stores your wine bottles in humidity, temperature, air quality, light, and vibration-controlled chambers in bonded warehouses.
6. Best prices.
Vinovest sources wines directly from winemakers, global wine exchanges, and merchants so that you get the best wholesale prices.
7. Assurance of provenance and authenticity.
Vinovest’s Master Sommeliers take care of tracing the provenance and checking the authenticity of each bottle of wine.
8. Global wine community.
Become a part of a global network of wine experts and enthusiasts. Get access to a private sale, or a limited release or an upcoming vineyard. You can even go to a fully stocked wine tasting with great food wine and cheese along with friends who share your taste!
A much smarter way to invest in fine wine, isn’t it?
While wine exchanges are a simple way to buy and sell wines, they’re not an ideal option for investing in wine.
You’ll need a wine investment firm like Vinovest to select, buy, store, and sell your precious bottles. That’s why when it comes to wine investing, Vinovest is your most reliable bet to build a high-growth wine investment portfolio.
Why not sign up today to start investing in the attractive wine market right away?