QB Winery Solutions

FREE Membership During Slowdown

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Recently, we seem to have settled into a new ‘normal’ in dealing with the COVID-19 situation. My team and I empathize with your frustrations regarding being quarantined (even us hermits are getting cabin fever!) while managing the uncertainty surrounding what the future holds (3 weeks? 8 weeks?).

Even if you are not in one of the five states that have mandated closure of wine tasting rooms, small family wineries everywhere have watched their sales come to a halt. Sadly, this comes at a time when many of us have had to put our social lives on pause as well. 

What are you planning to do with all of this extra time?

  1.       Untangle that pallet of wine?
  2.       Catch up on your filing?
  3.       Take an eCourse that has been lingering on your ‘to-do’ list?

If option #3 is your FIRST choice, I have an offer for you:

We have created a new FREE limited time only club membership: The Copper Club. Copper Club members have access to everything on our website that was previously only available to Silver Club members:

  •         Our foundation course: How to use QuickBooks in the Wine Industry
  •         For the excel nerds: How to Calculate the True Cost of your Wine
  •         Our new course: The Costing Book Checklist
  •         Plus all mini-courses and ‘quickies’

Copper Club members may also post questions in the Forum. Our experts answer these questions. These are not crowd-sourced, so you don’t have to guess if the answer is correct!

If you’ve ever considered joining, this may be a great time to check out just a few of the benefits our Silver Club members enjoy year round.

Is your wine glass half full or half empty? We hope a limited time free membership makes it half full. Please share this post with your wine industry friends.

2020 SVB State of the Wine Industry Recap

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As usual, the report is a good read. It’s also filled with charts and some wonderful photos, so be sure to print it in color! Go ahead and dive in anywhere, as you will undoubtedly land on something interesting. Here is a guide to what each section of the report entails.

  1. Introduction – Read these 2 pages for an overview of the main themes in the report.
  2. Executive Summary (3 pages) – This lists the 7 headwinds and 7 tailwinds.
  3. 2019 Predictions in Review (2 pages) – I love that Rob is willing to admit what they got wrong.
  4. 2020 US Wine Predictions and Observations (2 pages) – Key topics are Supply, Demand, and Price.
  5. Grape and Wine Supply (8 pages) – The is an oversupply, but you probably already noticed this.
  6. Wine Sales (20 pages) – Sales are flat everywhere. Rob has been discussing this issue for a while, therefore, this is not new, but still interesting.
  7. Demographics and Marketing (11 pages) – Rob feels that the wine industry has done a poor job of reacting to changing customer values in its key messaging.
  8. Land and M&A (2 pages) – If you were considering selling, now is not the time.
  9. Cumulative Negative Health Messaging (3 pages) – There is a strong neo-prohibition direction coming from government agencies. At the same time, the Millennials are very health-conscious, and they are picking up on this message.

Rob led two, one-hour discussions with a panel of experts to discuss the report. To be honest, I only listen for issues that I feel are useful for the family wineries. Much of the discussion is primarily focused on that other wine industry (the large, distribution focused wineries).

In the first session, my big takeaway was the neo-prohibition messaging that has quietly taken hold. The book “The French Paradox” and the report on “60 Minutes” all happened 30 years ago. (Remember when we all watched “60 Minutes?). It caused a surge in wine drinkers, particularly among the Boomers. Now those Boomers are “aging out” and the new generational cohorts are hearing a different message about wine. At the same time, several other alcoholic beverages have managed to find and spin a health benefit associated with their product (for example Vodka is gluten free!). Rob feels that the wine industry can do more to “bring balance to the conversation”.

In the second session, I was delighted to hear a shift away from last year’s statement that “the tasting room model is dead”. Instead, they suggested ways to continue the conversation with the visitors you initially meet in your tasting room. Continuing the conversation can be through emails, social media, or even a good old fashioned telephone call. These are suggestions that family wineries can easily implement. Large wineries simply cannot do this and will never have the genuine relationship with their customers that family wineries can develop.

Personally, wine has always been about connecting with my friends and family. Good wine always seems to stimulate conversation in a way that beer and cocktails simply don’t. With that being said, I encourage you to find new and different ways to connect with your visitors. I guarantee that both of you will enjoy the conversation!

Silicon Valley Bank webinar replay

 2020 SVB Annual Report

 

SVB Annual Direct to Consumer Wine Survey

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THE 2020 SURVEY HAS BEEN CANCELED, BUT MAY BE RE-OPENED AT A LATER DATE.

SEE THE LINK BELOW TO REVIEW THE 2019 SURVEY RESULTS

Here is a message from Rob McMillan and his team at Silicon Valley Bank

“Today more than ever, the wine industry needs to be more strategic and proactive in the direct to consumer approach. It can be the difference between success and failure in the coming decade. How do we know? Silicon Valley Bank and Wine Business Monthly have been collaborating for almost 10 years on an annual survey on direct to consumer wine sales. The survey is now open through March 20th.”

Download the instructions: 2020 SVB DTC Survey Instructions

Here’s a video to help you complete the survey: Instruction Video

Download the Survey Questions: 2020 SVB Survey Questions

Go here to take the survey: SURVEY  We will update if the survey is re-opened.

Here is last year’s webcast: Webcast

Another Compliance Problem – Wine Club Automatic Renewals

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The Wine Institute recently held a webinar to warn members that professional litigators are targeting wineries with wine clubs who fail to meet the requirements of the Automatic Renewal laws. (If you are a Wine Institute member, log into the member’s area for a replay of this webinar.) Remember the ADA problem a few years ago? This is a similar situation, whereby attorneys are taking advantage of obscure and lesser-known laws by targeting small businesses that do not adhere. They know that small businesses do not have the resources to fight a lengthy battle. They count on settling for an amount that is just enough to be painful; however not enough to fight.

The law I’m referring to is in regards to the automatic renewal laws which apply to your wine club membership. This issue is so obscure that the only article I  found was published by the Santa Monica Daily Press! Thanks to the Wine Industry Advisor for mentioning this article. Click here to READ ARTICLE.

As I mentioned, this is not a new issue. In 2015 several regional district attorney offices formed The California Automatic Renewal Task Force (CART). That group met with the California Alcohol Beverage (ABC) and they issued an advisory. Here are the 4 key features that you must follow to be in compliance:

  • Disclosure – Disclose automatic renewal offer terms in a clear and conspicuous manner (larger font, contrasting font or another way to call attention to the terms)
  • Consent – Obtain affirmative consent before charging the consumer (ex: a checkbox)
  • Acknowledgment – Sorry, this does not translate to standard English
  • Cancellation – Provide an easy, user-friendly method for cancellation; also, if the initial signup was done online, members must be able to cancel online

For the full advisory CLICK HERE

If you are not in California, be advised that the Federal statutes are similar. There are penalties at the Federal level as well.

Please consult with your attorney to confirm that you are in compliance with all features of these laws. We all know how easy it is to fall prey to a subscription service that we did not intend to pay for. These rules are not difficult to follow, so I urge you…don’t be one of those services.

One more thing…if you are not a member of The Wine Institute, consider joining! They are great advocates for the wine industry. They have spearheaded the agenda of growing the list of states where we are able to ship wine directly to customers.

Links mentioned in this post

Wine Institute   https://wineinstitute.org/

Alcohol Beverage Control advisory on Club Renewals   https://www.abc.ca.gov/club-renewals/

Santa Monica Daily Press article   https://www.smdp.com/wine-settlement-is-latest-success-for-consumer-protection-law/186738

Wine Industry Adviser   https://wineindustryadvisor.com

 

2020 SVB State of the Wine Industry Report

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The annual State of the Wine Industry Report prepared by Rob McMillan and his team at the Silicon Valley Bank Wine Division is here! It’s hot off the press, so I have not had a chance to read it. I watched the first webinar on January 14th, and I will watch the second webinar on January 22nd.

In the meantime, check out Rob’s blog where you can get links to the recordings of the webinars.

2020 SVB Annual Report

 

Cheers!

Jeanette

2019 DTC Surveys Compare Results

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The Wine Industry Network compared 2 major reports on DTC sales and marketing trends. I typically read industry reports with a grain of salt because they tend to refer to the large-winery-wine-industry, which is very different from the small-winery-wine-industry. However, I noticed the most successful wineries I work with have already implemented the article’s advice.

According to Dawn Dolan of the Wine Industry Network Advisor, these are the Quick Take Aways:

  • Online sales are increasing; be sure your e-commerce is accessible and user-friendly for not only your computer-using clients, but optimized for ease of use from your mobile users. Online sales represent the biggest opportunity for growth.
  • Utilize your tasting room for client acquisition.
  • The better trained your tasting room personnel, the higher the returns. Invest in staff training.
  • High intensity marketing = high returns. Develop a multi-pronged marketing plan.

To read Dawn’s entire article Click here

The reports discussed in the article were:

Costing Book Activities

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I updated the Costing Course (How to Calculate the True Cost of Your Wine) and I added several activities so you can practice some of the techniques I discuss.

I also added a new module with a 4th costing book example. This module explains the different choices you can make when laying out the costing book. Depending on your winemaking processes and your business needs, you may choose to have a few or a lot of bulk lots. If you have just a few bulk lots in your costing book, it will be easier to maintain the costing book.

Module 7 – Steffie Farm and Vineyard

Activity – Chart of Accounts

Activity – Allocation Math

Activity – Costing Book

Activity – Bulk Lots

Have fun!

California Sales Tax MAJOR CHANGE

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The CDTFA (California Department of Tax and Fee Administration) made a significant change in the sales tax rules effective April 1st.  Click Here for the ShipCompliant article on this change.

Here is a summary of the changes.

  • Applicable for wineries with over $500,000 DTC revenue in California
  • Sales tax is now based on the district that the wine is shipped to, regardless if you have a physical presence in that district.
  • Retroactive to April 1st

The hardest hit by this rule change are the micro wineries, because the larger ones are already using ShipCompliant (or something similar)

Note: I called the CDTFA to clarify some of the details, but if you have any questions call them directly at 1-800-400-7115. I am only sharing the guidelines

Applicable for wineries with over $500,000 DTC revenue in California

  • If you are not close to this threshold, go back to your racking project. Just keep this number in the back of your head.
  • Only DTC revenue shipped in California (yes, pickup at the tasting room counts at “shipped in California”). So distribution and wholesale sales are excluded. Also the rules states “tangible personal property” so that would exclude things like event fees, but again…check with your compliance consultant to determine what other exclusions would apply to your situation.
  • First, calculate your DTC revenue in 2018. If you were under $500k, you are excluded for now. When you cross that threshold, even if it is in the middle of the year, the rule will begin to apply.
  • If you include in “California taxable sales” the sales you make to states that you are not licenced in, then you will need to know that total for this threshold. (See below if you this is not clear)
  • If you are not in California, the rule applies if you ship $500k of personal property into California

Sales tax is based on the district it was shipped to

This is the crux of the rule change. In the past you only paid for districts where you had a physical presence. I know that many of you have been doing this all along, especially folks who worked in a large winery and then transferred to a smaller one, but it was actually not correct.

The solutions to this are:
  1. Use ShipCompliant
    • This is fine if you feel you are can justify the fee, because the program works well.
    • File the CA return through ShipCompliant, because there will be a lot more boxes to fill in.
    • If you currently have ShipCompliant, double check your settings to make sure they will meet this new rule
  2. Do it manually
    • Only for the wineries with minimal shipments
    • You will need to run a report that lists the shipments by zipcode, then match the zip code to the district. Check with your POS program to see if this report exists. If you push in your sales, you can run this report in QuickBooks. Pop a question in the forum for the checklist to make sure you are pushing in all the details.  (I asked the VineSpring team to add this column to their Sales Tax Reconciliation report…let’s see if they come through)
    • Download the CDTFA report with the districts and tax rate. What is useful are the district names. Click Here
    • I am still googling for a report the lists the CA zipcodes and the district it is in.
    • Remember, you are only liable to pay for what you should have collected, not what you actually collected, unless you collected too much. So charge your customers for the CA Statewide rate (currently 7.25%). When you file your return, you will end up paying a little more than what you collected, but consider that a savings over using expensive software.
  3. Do a semi manual method
    • Upload your shipment report (described above) to a Sales Tax reporting program that is not winery specific. There are a few out there, and I am testing one right now. That’s it.
    • However, you will not have live updates to the district rate changes, so hopefully your POS program will have that.
Notes for everyone
  • Make sure your POS program is properly setup. If the winery is in a district with a high rate, you don’t want to be charging all of your shipments that rate. The best would be to have an on-site rate (your home district) and a shipment rate (the CA Statewide)
  • I would strongly recommend NOT setting up a QuickBooks sales tax item for every district. This is too time consuming to manage. I don’t think the difference between what you collect from your customers and what you pay when you file your sales tax return warrants the giant mess you will have with all of these sales tax codes.
  • Frankly, I recommend that you shut off the QB sales tax feature and let your POS program handle that calculation
  • Double check your ShipCompliant settings

Retroactive to April 1st

This was signed on April 25th and made retroactive to April 1st. So if you already ran your April club run, you are SOL. Sorry.

One final note

Just to clarify what are “California taxable sales”… let’s discuss the 3 ways I have seen wineries handle out-of-state sales

Out-of-State Options

  1. If licensed in that state, charge that state’s rate. Report and pay to them.
  2. If not licensed in a state
    1. Charge CA rate. Report and pay to CA
    2. Charge zero. Since the wine was shipped out-of-state, CA cannot say it was a CA sale so it is excluded. Since you are not licenced, do not report, and do not pay that state, and include with the Out-of-State exclusion on your sales tax return.
    3. Use a third party shipper like Vinoshipper. Their system will charge the tax, collect it, report it, and pay it.

Discuss with your Compliance specialist or legal team which option you are comfortable with.

Stay tuned for that mini-course on Sales Tax I have been promising for over 3 years now….

Cheers!

Jeanette

 

2019 Silicon Valley Bank State of the Wine Industry Report

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Last Wednesday Rob McMillan from Silicon Valley Bank hosted a webcast to discuss the annual wine industry report that he and his team put together. The report is a good read, really. I recommend that you at least read the Executive Summary.

Rob has valuable insights for the wine industry, however many of his comments are aimed at the larger wineries because the small wineries do not bank at Silicon Valley Bank. Right at this moment I have to climb down off the ledge due to a few comments made by the panel during the webcast that, if taken out of context, the team at a small winery might take the wrong way. I will make some comments, but first I I am going to digest the report.

They will be doing a follow-up webcast on January 23rd. Check out Rob’s blog for information on how to join that webcast Rob’s Blog

Have a look for yourself:

2019 SVB Webcast Replay

2019 SVB Annual Wine Industry Report

 

Cheers!

Jeanette

Website Updates

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While you have been busy pressing and punching down the grapes, we have been busy pressing the keyboard and punching down code (trust me, you had more fun), and we rearranged things on the website. Some key changes are:

  • Go directly to all the courses from the Courses tab in the top menu
  • The webinars are now mini-courses and are listed under the Advanced courses
  • Access our all-new My Favs page under the Account tab for all of the courses you have favorited
  • Find the Blog/Quickies link in the footer

Most importantly …. drum roll …. we are launching Office Hours, the last Tuesday of the month at 10:30 am Pacific.

Here is a video to show you around…

Cheers!

Jeanette

The Crush

Your first step to running a profitable winery and crushing your business goals.