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Bottoms Up!

Here's what every online alcohol startup needs to know.
April 1, 2008
URL: http://www.entrepreneur.com/article/191556

When it comes to online retail, wine and spirits sales aren't the easiest areas in which to launch a startup. The licensing and regulation hassles alone can make even the staunchest entrepreneurs think twice. But those challenges didn't stop Jill Bernheimer from launching Domaine547--one of a new breed of sites that combine alcohol sales with online social networking features--in 2007.

"My biggest challenge was navigating the local, state and federal legal issues regarding sale and distribution of alcoholic beverages," says Bernheimer, 36. "My launch date kept getting pushed back." The whole process took about seven months, with much of that time spent waiting for licenses to come through, she says. "Waiting it out was not the worst thing in the world. It allowed me to launch the blog and content portion of the site before the e-commerce portion." What sets Domaine547 apart from the old guard of online liquor and wine retailers is its dedication to social features. The site's friendly design, blog and forum areas make it attractive to consumers who are eager to learn as well as purchase. The first thing a visitor to domaine547.com sees is an ongoing wine blog with an unobtrusive link to the company's online store in the upper right-hand corner of the page.

Age requirements for registration and ordering and ID requirements from FedEx help Los Angeles-based Domaine547 stay in line with shipping regulations. Though shipping restrictions prohibit Domaine547 from sending wine to every state, Bernheimer is able to reach a national audience with her site's content. If current trends continue, shipping restrictions will eventually lessen and those content-perusers could become regular wine buyers as well. Any online alcohol startup needs to take into account the social aspects of the web as a vehicle for attracting customers, sharing information and building a community.

In a space that's dominated by competitors both large and small, smart marketing is important. Domaine547 sponsors search results on Wine-Searcher.com and advertises on a popular wine blog that reaches out to East Coast audiences. "The longer-term marketing strategy is more about growing the social community aspect of our business and forming some strategic alliances with other people in the 'wine 2.0' world," says Bernheimer, who expects to earn sales of $500,000 this year. Domaine547 also connects with other wine bloggers around the world and has started offering special wine packages built around their recommendations. With the social boom on the web underway, no wine or liquor startup should be an island.