Notes from a wine insider

PHOTO CREDIT : © ISTOCK . COM / ANDRESR an extra million in sales we didn ’ t have the year before . In year two , we grew to over two million in sales . We didn ’ t have debt and our small margins were fine — it was additional revenue we had not had before . We kept thinking we might hit a wall , but the business just kept on growing .

We understood from the beginning that customer service was the key to success . We guaranteed every bottle , no matter the reason , and refunded each and every member if they were unhappy . We kept morphing the business into something much bigger than what either of us expected . Changes to sourcing and the distribution model were key to purchasing on a much greater scale . The better the wines we offered , the more we grew . We had superior sourcing , and brought in some sensational wines that really got our customers excited . Our timing was ideal , and we invested the money back into marketing . I ’ m a merchant at heart , and I can ’ t sit still for a minute . My brother and I worked our tails off and it really started clicking .

BY JONATHAN H . NEWMAN

I RECENTLY SAT DOWN with Joe Arking , owner of two of New Jersey ’ s larger wine and spirit stores , and the internet wine flash-sale site , Winestilsoldout ( WTSO . com ). Joe and his late brother Elliot have been in the alcohol beverage industry for more than 35 years .

Jonathan H . Newman : How did you first get involved in the alcohol beverage industry ?

Joe Arking : In 1985 , my brother Elliot and I purchased Roger Wilco Liquors , a three-store chain in southern New Jersey . We were in food businesses at the time , and the wine-andspirit business appeared to have the stability and longevity we looked for .

JHN : What was the genesis of Winestilsoldout ? JA : Fourteen years ago , the wine business was in a general slump . There was a tremendous oversupply of wine at the winery and distribution levels . We built a huge close-out wine department , doing over a million a year in sales . One of our competitors at the time , The Wine Library , had built a huge direct-to-consumer internet business . We looked at shipping wine , but without a shipper to confirm age requirements , we were hesitant . Then came the U . S . Supreme Court ’ s decision in Granholm , and we saw opportunity .

My son Edward told us about a successful electronics website WOOT , and we modeled our business on a one-wine-featured-at-a-time model . We wrote software and developed the website . We found that free freight was the key to successful consumer sales . My sister in-law Cris is a successful New York bond trader , and she emailed her clients and friends and told them about the website — and that got us going .

JHN : What was business like in the first few years ? JA : In year one we did about a million in sales . My brother and I were elated . That was

JHN : How did WTSO grow ? JA : We really did start with nothing , and now almost 15 years later have sold more than 45 million bottles of wine . We consistently reinvest in our business model . A lot of time and energy has gone into compliance and customer service . Due to changes in state laws , we lost a significant amount of business in 2016 and 2017 , but having the lost states back in the fold , we are seeing nice year-over-year double-digit growth . The website will get a facelift this September . We will emphasize new ways to enhance the shopping experience . It will continue to focus on one wine at a time , with five offerings . We built a team of people over the years that are the best I have ever seen in my history in business , and there is no way we would be here today without them . I am proud of our organization and our growth . BD

As chairman of the Pennsylvania Liquor Control Board , Jonathan Newman was once the nation ’ s largest wine buyer . Follow him on Twitter at @ NewmanWine and visit his website : newmanwine . com .

10 Beverage Dynamics • July / August 2019 www . beveragedynamics . com