- Digital Wine Ventures has processed its first wave of orders from its WINEDEPOT business
- WINEDEPOT is a specialised wine distribution platform that allows retailers to drop-ship orders to customers from multiple depots in Australia
- Digital Wine now plans to expand WINEDEPOT into China, Hong Kong, Canada, New Zealand, Singapore, the U.S., and the U.K.
- The company has ended the day up 16.7 per cent with shares trading for 0.7 cents apiece
Digital Wine Ventures has processed its first wave of orders from its cloud-based wine distribution business WINEDEPOT.
Launched in September, WINEDEPOT is a specialised wine distribution platform that allows retailers to drop-ship orders to customers from multiple depots in Australia.
This has reduced delivery times, freight costs and breakages thus making distribution more efficient for all sides.
The business currently generates a number of revenue streams per case of wine (depending on volume and size) by providing the industry with an end-to-end supply chain which includes fulfilment and storage fees, and surcharges.
WINEDEPOT currently has over 200 suppliers who are signed up to its platform and is able to deliver same day orders under a partnership signed with Australia Post in October.
Digital Wine's CEO Dean Taylor has stated that new sources of revenue will grow with the company.
"Right now our primary source of revenue is from logistics fees, which are entirely volume-driven," Dean said.
"The next phase of the platform will be to establish a B2B marketplace whereby the company will also generate trading fees which are value-driven with WINEDEPOT taking a percentage of the overall transaction value," he added.
While trading fees will ultimately become WINEDEPOT's largest and most profitable revenue stream, the company is currently focused on acquiring suppliers and generating cash flow.
"What is really exciting is that our revenue and profitability is directly linked to the number of suppliers, products and orders processed every day and we are experiencing growth across all of these metrics," Dean said.
He also confirmed that the amount of orders being processed through the WINEDEPOT network is steadily increasing as more customers sign up to take advantage of its delivery service before Christmas.
"All this extra volume creates a backlog on the freight networks, forcing retailers to publish cut off dates to guarantee that their customer's purchases are delivered before Christmas and depending on the customer's location, these cut-offs can be weeks ahead," Dean commented.
"As a result, online retailers miss out on millions and millions of dollars of sales each year, especially in the liquor category where sales literally fall off a cliff about mid-December," he added.
WINEDEPOT has plans to be expanded into China, Hong Kong, Canada, New Zealand, Singapore, the U.S., and the U.K.
Digital Wine has ended the day 16.7 per cent in the green with shares trading for 0.7 cents apiece in a $6.127 million market cap.