The Cost Of Free

I woke up on Christmas morning in a great mood. All the girls were home. I had already had my coffee. It was time to start cooking the feast. I opened the fridge and knew something was off. It just didn’t feel cold enough. That’s fine. We have a spare fridge in the garage. Two hours later everything had been transferred, except for the obvious casualties. The garage fridge is smaller, so there were additional trips to the winery fridge for what felt like dozens of condiments we rarely use but suddenly couldn’t live without.

The next day I decided to MacGyver the main fridge. I was pretty sure I knew what was wrong. A small part. An inexpensive fix. Then came the decision. Do I wait for free shipping, which during the holidays in our area can take more than a week? Or do I splurge for expedited shipping?

I recently read a post on the Tablas Creek Vineyard blog where general manager and partner Jason Haas walked through the realities of shipping costs and consumer expectations with a level of transparency that honestly surprised me. Tablas does something rare. Their blog goes far beyond polished behind-the-scenes marketing. They openly share vineyard data, fermentation decisions, distribution challenges, regulatory shifts and even hard sales numbers tied to shipping economics. It reads less like a marketing channel and more like an industry resource. Other wineries can actually learn from it.

We have some shared history with Tablas Creek. Our vines at Holly’s Hill came from their nursery, vine material originally brought over through the Perrin family of Château de Beaucastel fame. I also served alongside Jason for about ten years on the board of Rhone Rangers, the nonprofit promoting American-grown Rhône varieties.

The takeaway from Jason’s post was simple and sobering. Shipping is expensive. Offering it for “free” is not a casual decision. Tablas has largely moved toward subsidized shipping rather than blanket free shipping, while showing customers the actual freight cost and avoiding padded handling fees. We do something similar at Holly’s Hill. We charge actual shipping rates and often absorb a meaningful portion of the cost ourselves.

The last few years have seen dramatic freight increases. At the same time, as Amazon Prime members, we understand the psychology. “Free” shipping feels good, even when we know we are paying for it somewhere, whether in higher product prices or an annual membership fee.

For several years we have offered free shipping to wine club members who order 12 bottles or more using Global Logistics (GLS).  It works for us. It increases sales and gives members another reason to stay in the club.

GLS ships only to western states, which keeps a 12-bottle box closer to half of what it costs to reach the East Coast, where freight can run about $80. They also allow us to ship in the original case box rather than an additional outer container, which can save over $6 per case compared to some national carriers like FedEx. Like Tablas, we are always trying to balance three things.

Make customers happy.
Sell more wine.
Keep the lights on.

There is no perfect model. Only tradeoffs.

So what shipping model works for you? Free above a threshold? Flat rate? Fully transparent actual cost? Built into bottle pricing? Something else entirely?

As for our fridge, I cheaped out and waited for free shipping. Long story short, the fridge is finally working. One month later. On the bright side, we got a lot of steps in while walking from the kitchen to the garage.

Josh Bendick
Co-winemaker