All investment opportunities have a similar goal; to make money.
In order for an investment to make money, it must have the potential to appreciate in value or provide cash flow.
Wine investments are no different.
So, how do you actually make money with wine investments?
We’ll be answering that question and more in this article.
How To Make Money With Wine?
The premise is simple.
To make money with wine, investors purchase a bottle or collection of wine and sell it in the future for a higher price than they paid.
While the idea is simple, the execution is a bit more nuanced. There are numerous factors that determine the value of wine.
Like any investment, a particular wine investment can appreciate or depreciate in value over time.
Thus, it is important to understand the wine market and risks involved before getting started.
For a more hands off approach, you could opt into investing through a platform like Vint or Cult Wine. These platforms actually help you build a portfolio and handle the storage and insurance of the wine on behalf of the investor.
How Much Money Can You Make From Wine?
In 2018, a bottle of French Burgundy sold for a record $558,000 at an auction at Sotheby’s.
This was roughly 17 times more than its original estimate claiming a value of $32,000.
While this example may be a bit extreme, investors could reasonably expect to earn 7-12% with wine investments.
According to the Liv-Ex Indices, fine wine has averaged roughly 10% annually over the last 30 years.
Of course, when buying an individual bottle of wine, the risk is increased and returns may not reach the average of fine wine in total.
Where To Buy Wine
Buying fine wine as an investment is not as easy as going to a grocery store and picking up a bottle.
Instead, there are a few places where you can buy an investment grade bottle of wine.
Sotheby’s and Christie’s are two of the most popular auction houses for buying wine outright.
Of course, when you purchase a bottle of wine on your own, you will need to consider the transportation, storage, and insurance costs.
How To Sell Wine
If you have wine that you want to sell for a profit, you have a few options.
No matter what route you choose, be sure to conduct your own thorough research about each one.
In cases of rare wine and large collections, it might make sense to pay a wine appraiser to review your collection and provide an appraisal.
To actually sell wine, you have a few channels depending on your goals and the wine itself:
- Retail stores. If you have a small quantity of wine, you can consider selling it to retail stores or wine shops in your area. These businesses may be interested in purchasing your wine to sell to their customers.
- Online marketplaces. There are several online marketplaces, such as Wine.com and Wine-Searcher, where you can list and sell your wine. These platforms allow you to reach a wider audience and make it easier to sell your wine online.
- Auctions. If you have rare or high-value wine, you may be able to sell it at auction. There are several auction houses that specialize in selling wine, and these auctions can be a good way to reach a wider audience and potentially fetch a higher price for your wine.
- Direct to consumers. If you have a small quantity of wine, you may be able to sell it directly to consumers. This can be done through your own website, through social media, or through other channels such as local wine events or tastings.
As a physical asset, wine tends to hold its value better than many financial assets.
However, unlike many stocks or real estate investments, wine investments do not provide you with monthly cash flow or dividends.
Instead, you only realize a profit when you sell the wine (should you sell for a gain).
To make money with wine, investors purchase wine and sell it in the future for a gain. This makes wine a non-yield bearing asset.
To learn more about wine investments, be sure to check out our complete wine investing guide here!