A NEW Internet-based system is giving consumers the opportunity to source wines at the price they are prepared to pay. On entering the snup.com.au website, buyers find the wine or wines they are looking for, enter the quantity required, then place a bid for the total amount they are prepared to pay, including delivery.
From there, snup's network of reputable, independent Australian wine retailers will review the bids, and accept when it's economically feasible. The founders of snup, Duncan Banks and Stephen Lee, say their revolutionary system gives consumers two advantages: bargaining power and access to a large range of wine.
During their studies at Melbourne Business School, the partners analysed the inefficiencies of various markets and devised potential strategies to resolve them. They determined that the Internet provided the ideal platform for a business which gave consumers access to an extended range of wines, and the power to name their own price for these wines.
"Business is about meeting the needs of the consumer," Duncan and Stephen say. "This principle can't be truer than in the wine industry. Due to the explosion in the number of Australian wine producers in recent years, the range of wine available has grown exponentially, making it difficult for consumers to navigate the market. Subsequently, pricing of wine has become opaque. Wine lovers no longer know where to find the wine they want and a reasonable price to pay for these wine, their only guide being the price tag the retailers have attached."
The partners say that, despite its merits, the snup model does not defy basic economic principles; a retailer will not accept a bid if it means selling wine at below cost. They urge consumers to appreciate that delivery charges, payable by the retailer, can be significant, and that purchasing in dozens or half-dozens can reduce this cost on a per-bottle basis.
"Buying wine through snup is fun," say Duncan and Stephen. "It gives the consumer a sense of empowerment, the ability to haggle for the wine you want, without the embarrassment of asking a wine shop attendant for a price reduction."