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Compliance? We’re talking about compliance?
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I didn’t get into the wine business to do this!
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Legal and Legislative Update
Strategies for Getting Compliant
Optimal Compliant Workflow
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Legal and Legislative Updates
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Wineries can ship to 41 states for offsite sales
WA
OR
CA
NV
ID
WY
MT ND
NE
CO
NM
LA
MO
MNWI
MII
IL INOH
KY
ALGA
FL
NC
VAWV
P
NY
NH
MA
RI
CT
NJ
DC
MD
DE
AZ
AK
HI
VT
UT
SD
IA
AR
TX
TNSC
ME
PA
MS
KS
Restrictions (On-site Purchase Only)
Prohibited
Allowed
OK
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Direct Shipping Update Trends
$4.5 BillionTotal DTC
$1.5 BillionDTC Shipments
$2.8B$540M
$900M
Events
Ecommerce
Tasting Room
$270M
Wine Club
Source: Silicon Valley Bank DTC Survey, WineDirect Proprietary Data
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30 States with Budget Shortfall in 2013
IA
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WA
OR
CANV
ID
WY
MT ND
NE
CO
NM
LLA
MO
MNWI
MI
L INOH
KY
ALGGA
FFL
NC
VAWV
P
NY
NH
MA
RI
CTNJ
DCMD
DE
AZ
AK
HI
VT
UT
SD
AROK
TX
TNSC
ME
PA
MS
KS
DTC Shipping States That Require Common Carrier Licensure
IA
Source: Wine Institute
IL
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IA
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Now for some good news….
OR
CA
NV
ID
WY
MT ND
CO
NM
LA
MO
WI
IL
G
F
NC
P
NY
AZAR
PA
MA
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2013 State Update- Montana and Arkansas
.31% .43%
$50 $25*
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Massachusetts (HB 1029)Pending Legislation in 2014
3.5% 2.5%
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Massachusetts (HB 1029)Shipping starts 1/1/2015…probably.
3.5% 2.5%
• $300 permit.• 12 cases
consumer/ year.• Carrier 21+
stickers.
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Pending Legislation in 2014
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Okay, so you’re ready to get compliant. What do
you do next?
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Real-time order checking
Accurate collection of sales taxes
Tax and shipment reporting
Staying current with rule updates
Obtain licenses where required
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All-In
Updated January 2014 Source: WineDirect Proprietary Information
WA
OR
CA
NV
ID
WY
MT ND
NE
CO
NM
LA
MO
MNWI
MII
IL INOH
KY
ALGA
FL
NC
VAWV
P
NY
NH
MA
RI
CT
NJ
DC
MD
DE
AZ
AK
HI
VT
UT
SD
IA
AR
TX
TNSC
ME
PA
MS
KS
OK• 88% of US Consumption• Total Cost: approximately
$7,908• Reports Required: Up to
780 filings per year.
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Maximum Opportunity
OR
NV
ID
WY
MT ND
NE
NM
LA
WI
P
AZAR
PA
2.90%
18.07% 1.79%
4.83%
1.51%
4.34%2.63%
2.65%
8.02%
2.19%
8.30%
0.27%
2.26%1.54%
0.54%
4.37%2.76%
“Free” States
• 70.3% of US Consumption• Total Cost: approximately
$2,888 per year• Reports Required: Up to
312 filings per year.
Updated January 2014 Source: WineDirect Proprietary Information
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Cost Conscious
MT
NE
LA
WI
P
AZAR
PA
2.90%
18.07% 1.79%
4.83%
1.51%
4.34% 2.65%
8.02%
8.30%
0.46%
0.45% 2.76%
0.12%
0.47%
0.11%
1.54%
“Free” States
2.26%
0.54%
1.71%
1.43%
• 62.2% of US Consumption• Total Cost: approximately
$1,350 per year• Reports Required: Up to
348 filings per year.
Updated January 2014 Source: WineDirect Proprietary Information
0.27%
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Licensing Strategies
Cost Conscious
•62% of consumers
• 348 reports• $1,350/ year
Maximum Opportunity
•70% of consumers
• 312 reports• $2,888/year
All-In
•88% of consumers
• 780 reports• $7,908/ year
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Real-time order checking
Accurate collection of sales taxes
Tax and shipment reporting
Staying current with rule updates
Obtain licenses where required
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How does compliance fit in with my DTC business?
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Two Common DTC Workflows
Order System
Compliance
Shipping or Fulfillment
Order System
Shipping or Fulfillment
Compliance
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Introducing the Optimum
Optimal Compliant Workflow
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New Optimum DTC Workflow
Vin65Order Management
POS
Shipping or Fulfillment
WineDirectCompliance
software
Tax Rates
Compliant Y/N?
Tracking Compliant Orders
Club
Tele-sales
Tracking
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Keys to customer friendly workflow
• Capture all order sources.
• Do not interrupt sales transactions.
• Maintain a single source of truth.
• Enable fast shipping.
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Resources