you're reading...

How Gary Vaynerchuk Turned A Liquor Store Into A $60 Million #wine Business

How many people do you know that have build a local liquor store into a $60 million business, and then become a huge media star with a million dollar book contract, like probably one, us too.

We’re going to talk to Gary Vaynerchuk when we come back. So Gary, welcome. Great to have you. You know, people know you as this media figure, they know you as the Wine Guy, they know you as the best-selling author of Crush It and now The Thank You Economy, take us back.

You emigrated to here from Russia when you were younger. Talk about that. Yeah, I came to the States when I was three.

I was born in Belarus, so it was super ghetto, right? Eight family members in a studio apartment. You guys think you’re crammed? We had it bad. You know, it was difficult and my dad got a job as a stock boy in New Jersey, and it all kind of started there, so I was super entrepreneurial. You know, lemonade stand franchise, I had seven of them. I rode my little Big Wheels around, collecting my cash. You know, and then had a big baseball card business, you know, two or three thousand dollars a weekend selling cards.

Then my dad ruined my life, dragged me to the store, paid me two bucks an hour. So it was really an immigrant story and I became passionate about wine when I was 16, 17. I wanted to really build the biggest wine store in America. Innovated, you know, launched WineLibrary.com in 1997. So all this debate about socials ROI is the e-commerce debate of ’96, ’95, ’97, right? So it all feels like the same to me. Was able to build the business very quickly, and then when I turned 30, had the epiphany that, oh my God, I can’t ship to a lot of states, I’m not going to be Amazon or Zappos, I’m out of markets that I can’t ship to, let me build something that can’t be taken away from me, like I felt these markets were being taken away from me and that was when I decided to build my own brand.Take us a little bit through the actual building of the wine business. Did you do experimentation, did you have a…Yeah. So my dad, the store was called Shopper’s Discount Liquors, a local store in the Springfield, Milburn, Shorthills area of New Jersey. First I learned my craft. The amount a lot of wine knowledge I had at seventeen should be illegal, right, no kid should know that much. I mean, I was just all in, and I worked the floor, and at the end of the day I think everything that’s going on in business is always understanding the end user, right?

That’s the whole game. And I understood it. And so what I understood was the world changing, people started having email. While the Zachy’s and the Sherry Newmans and the Morells were doing fax services, I was doing an e-mail service.

And that was one of the big kind of pushes for me, you know, obviously that went to a five day week service, so there was a lot of growth in email marketing. The website was very important, we hired a developer in 2000, which my dad freaked on, right, why does a liquor store need a developer? And I started understanding and learning the culture and get a hold of, you know, we were the first advertiser of the world “wine” on Google. I was paying ten cents for the word “wine” and converting. And so it was, it’s kind of my thesis today.

You’ve got to continue to innovate, wine is growing as a culture in the United States. It was good timing, and really awesome execution. And how much success of the store, to focus on that, is the fact that you have made yourself famous? The, probably the forty to sixty million dollar part, right, like every Saturday. If you go to Wine Library on a Saturday there are license plates from all over the country, and a lot of people are just asking to go upstairs and see where I tape the show. So there’s definitely been residual, maybe like a celebrity chef, kind of novelty. But I think the big reason we do what we do and we were able to grow up that celebrity is, i don’t care how good you are at marketing, content is king, right. Because the store has such a great selection and because we over-deliver on customer service and because our pricing is so strong, we’re able to really convert life time value. And so the funnel has been tremendous because of my brand equity but keeping them has been about execution.And as you build your own brand, is it finding things that are effectively true to talk about all the time or is it, “I’ll do anything to get famous” and then that will accrue the business.

I’m not really good at a lot of things, Harry. I’m good at story telling. The reason this whole second part happened is because it was what I was most excited about when I was building Library TV, I wasn’t happy that I was the star of Wine Library TV. I was happy that I was the brains behind building the brand. And so it’s very comfortable for me to segway into working with other brands, you know, before I built my own brand, I build the Wine Library brand, cause we were Shoppers Discount Liquors. I had to re-brand it, so for me it’s about brand building, you won’t see me go do, I’m not coming out with a hip-hop album. You know, I’m not going to become a chef. I’m going to stay in this very closed you know, section of branding and marketing. And of course wine is a huge passion. And will you stick with wine? Now you have Vayner Media, which sounds like it’s taking off. You’re advising other companies on how to do effectively what you did for the company. Does that become the main business?

I thought I was done with wine. As a forefront I’m obviously, you know, always working with my family business, it’s my family business.You know, I retired from Wine Library TV on the stage at South By this year when I hit my thousandth episode. And about six months earlier I timed it, and it was like, you know, I’m a showman, and I wanted to do it on South By’s stage, I thought that was going to be it. Somewhere around four months before it happened, I said holy crap. I still love wine so much. And I, you know, I’m obsessed with mobile. Clearly I felt like I needed to innovate again because the show is five years old. It was great for ’06; people have caught up in 2011.

So, I launched something called Daily Grape, which is an iPhone app now. Android’s coming out any day. Same kind of concept, me reviewing wine, but it’s seven minutes, more consumable, much more useful. I kind of look at it as useful entertainment.So now you watch a show, you see a wine that is interesting based on my review, you can add it to your wish list, and now people are going into restaurants and stores, handing their iPhones to the sommelier or the wine guy and saying, “Hey, can I buy this wine? Do you have it?” And I’ve got enormous amounts of feedback, twenty episodes in, on how I’m solving a problem.

You know, I do a lot of angel investing. And I don’t care that Fred Wilson is investing in your company or that TechCrunch is writing it up. What problem are you solving? And I kind of woke up one day and said, “What problem am I solving?” And so I’m solving the problem of wine shopping, which, as we all know, people shop by label and rating. Absolutely. And so how do you get paid for that when…on the app? So, you know, on the app, it’s a free app, but I am now doing something that goes after the Robert Parkers and the Wine Spectators.

I do have a monthly newsletter, which is four dollars a month, so it’s pretty much a freemium model. If you want to look at it. The show continues its legacy, its still free, but for the fans that want to see what I taste outside of the camera, which are hundreds of wines a month. I’m now recording them so its a new lifestyle change. My wife and I are buddies throughout, and I am recording my tasting notes even casually. So I am monetizing that way and the conversion’s been pretty impressive, and I am happy to see that I have built enough equity in my fan base that they feel they want to jump on that newsletter.


Read more: http://www.businessinsider.com/gary-vaynerchuk-wine-library-1-2011-4#ixzz1Oyr4o47Y



No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: