Want to sell your wine cellar? Here’s how

There are no better products to buy than wine. Fact. With its infinite variety, wide range of prices and ability to (a) increase in value, and (b) make your steak taste better, it appeals to nerds, collectors and sybarites alike.

Which perhaps explains why wine lovers can end up with so much of the stuff. Bottle racks groaning, wine fridges stuffed, cases littering the floor. And let’s not even get started on the hundreds of bottles sitting in bond.

If any of this sounds familiar, feel free to speak up. You’re among friends.

Most of us in the vino-curious community have never considered selling our cellar; our idea of ‘disposing of’ bottles stretches no further than emptying them into a glass and drinking them. But there may be times when you need to (ahem…) liquidate some assets. It could be a small, strategic sell-off to free up space or a much larger/total disposal as a result of a house-move, or worse.

‘People tend to sell their cellar at a time of crisis – divorce, bereavement, things like that,’ says Paddy Shave, head of wine sales at Brightwells auctioneers. ‘But in fact, more and more people are coming to us at the moment and saying that they’re not sure about being able to pay their bills.’

Whatever your reasons for deciding to sell, you need to know your options for how to go about it.

Storage is key

The first point worth making is that if you’ve bought wines (particularly expensive ones) through an established wine merchant and have stored them, unopened, in bond, it’s easy enough to find someone who will take them off your hands and sell them on at a good rate. ‘For us and our clients, in-bond sales are favourable on pretty much all levels: provenance, tax and logistics,’ says Geraint Carter, from the investment team at Bordeaux Index. ‘Consumers (especially those in Asia) tend to want original packaging as an indication that the wines have been correctly stored,’ he says. ‘This is particularly true for our clients looking to on-sell.’

In other words, you won’t have problems getting rid of cases of 1982 Château Lafite that have been kept in the perfect conditions of a bonded warehouse. But it’s a more complex story disposing of the contents of a home cellar containing everything from Stag’s Leap to Jacob’s Creek.

There are two main routes you can go down: auction or straight sale. In the former route, companies will pack up the cellar (or remove the bottles in question), group them into lots, photograph them, promote them and put them on sale. For income they will take a percentage of the sale price, with the seller pocketing the rest.

If you’re selling directly to a buying company, they will pay an upfront lump sum to take delivery of the stock, relying for their profit on selling the contents for as much as they can.

The London Wine Cellar describes itself (proudly) as ‘buyers not brokers’; one of its competitors told me (also proudly) that ‘we put our money where our mouth is’. Certainly, selling directly to a trade buyer has the advantage of being quick and easy, and delivering you money more or less instantly. Auctions are slower – some houses only do fine wine sales three times a year – and the income is variable.

On the plus side, selling at auction ought to deliver a higher return than taking cash upfront. More on this later.

Investigate the market

Either way, it’s worth shopping around. And to do that you need to create an inventory of what you’re actually selling. As Paul Roberts, from fine wine logistics at Wilkinson Vintners, puts it: ‘It all starts with a list – what’s there, what’s in a case, any condition issues.’

You’ll need to work methodically through the bottles you’re putting on sale, recording the name of the wine, the winery, the vintage and the region, plus how many bottles there are. Listing them by country and region will make it clearer.

It’s a good idea to highlight any pluses – anything that is stored in an original wooden case (OWC) or unopened case – and, equally, to flag up anything

that looks suspicious – either because the cork has dropped in the bottle, or there is seepage.

If you’re just selling a few dozen bottles this won’t take long. If you’re cataloguing an entire cellar it can take quite a while, particularly if the collection is made up of hundreds of different bottles rather than large collections of fewer wines.

If this looks like a daunting task, specialist wine auctioneers may well offer this service for you. They’ll typically charge £500-£1,000 a day for it, depending on whether it’s just an inventory or also includes a valuation, though that fee will be revoked if you then go on to sell through them.

Once you’ve catalogued your cellar, you should then send it off to potential vendors, along with any information about where the wines have been stored: purpose-built air-conditioned storage facility, a traditional old cellar, or (hopefully not) under the stairs.

If a company is looking at buying your cellar outright, they’ll use the information you send them to decide whether they’re interested and, if so, make you an offer. Auction houses will use it to provide you with an estimate of what they’d expect to be able to sell it for.

These figures are based on the assumption that the wines are in good condition and have been stored well. But whoever collects your cellar – whether to buy or re-sell – will examine every bottle in detail once they are safely in their warehouse and revise expected prices downwards if they’re in sub-optimal condition.

‘When producing a valuation I look at [wine] level, label, capsule, cork and colour,’ explains Brightwells’ Shave. ‘The better all these are, the more money will be achieved.’

Either way, don’t be surprised or offended if an initial offer is slightly lowered when the cellar has been collected and examined in more detail. Wines suffering from pest or water damage or kept somewhere evidently unsuitable will probably be rejected altogether.

Maximising the value of your cellar

The name’s Bond… in-bond

The easiest wines to sell are those that have never even made it into your possession; that you’ve bought and left in a bonded warehouse, duty and taxes not needing to be paid. Still in their unbroken cases, these wines will attract full market value.

Temperature

Wines at home need to be kept in a cool, dark environment – about 10°-14°C and slightly humid. Purpose-built cellars (or wine fridges) will achieve this with coolers and humidifiers; old-style cellars by being below ground. Wines stored in a place that’s too hot/dry/light won’t reach their market value.

Cases

Even if they’ve been stored at your house, it’s generally easier to sell full cases (which attract collectors and restaurants) than random one-off bottles. Particularly if the case hasn’t been opened (ideal) or damaged.

Keep your labels clean

Dragging bottles into and out of your wine racks can scuff labels and capsules. If you are organised and dedicated about using bottle tags, you’ll keep them in good condition and more people will want to buy them.

Right place, right time

Different auction houses or retailers often attract slightly different customers. Matching your cellar to the right sales outlet can help ensure it reaches its full value. For auctions, it’s also worth checking out which times of year attract the highest number of bidders.

Choose wisely

Once you have your quotes, the next stage is deciding who to sell to (or through). The factors you need to consider are how fast you want the money, how much you are likely to get for the wines and how much commission the vendor will take. If the first and last of these three points are the most important to you, you may want to consider selling directly to a wholesaler, or someone who specialises in buying cellars. They pay straight away and there’s no commission.

If you think an initial offer is too low, you can try negotiating upwards a bit. But remember, they’re taking a punt on being able to sell your bottles for more than they buy them, so what you gain on convenience and promptness of payment you lose in overall value.

If you want to maximise your return, you’re likely to get more money by selling at auction. Very rare or immaculately stored fine wines can go through blue-chip houses such as Christie’s or Sotheby’s. But if you have a mixed collection, rather than 50 cases of Petrus, you’ll be looking at something less rarefied. Bog-standard auction houses – the kind that clear houses and sell furniture – will probably be happy to take whatever you give them. But if you’ve anything approaching decent wines in there (and since you’re reading Decanter, let’s assume you do) this is not a good option.

‘One of the peculiarities of wines and spirits at auction is that something that is very valuable will often tank at a regional sale as it is too strongly priced for the general public,’ says Chris Hambleton of (online) Bacchus Wine Auctions. ‘I’m astonished by some of the prices I see wines go for in non-specialist sales.’ So, make sure you choose an auction house that sells wine regularly.

When assessing your inventory, auction houses will typically provide a low and high estimate for each wine. But think twice before automatically choosing the one with the highest valuation. In the same way that estate agents can over-value your house to secure your listing, it’s entirely possible that an auction house might err on the positive side when providing a quote.

And while dangling extra zeros in front of your eyes can be beguiling, it’s only a benefit if the seller can deliver those prices.

Costs, too, can vary significantly. Commissions can be anything from 8% to 15%; some charge on a sliding scale (the lower the value, the higher the percentage). Others add in small fees per lot as well. Smaller operations might charge for removing the cellar in the first place.

Can you make a profit?

But while it’s good to know what the costs are, like the predicted sale price, they should be a contributing rather than deciding factor in choosing where to sell. After all, paying 15% commission on a £30,000 sale will net you more money than if the same cellar only fetches £20,000 and you pay 8%.

The key factor, then, is whether the auction house can deliver the buyers. To an extent this is a numbers game – if you have 500 registered buyers for a wine auction, you’ve got more chance of them bidding against each other and pushing the prices up than if there are 50. But equally, 100 serious, engaged buyers are of more use than twice that number of bargain-seeking dilettantes.

In this, it’s worth looking at your shortlisted candidates’ past sales – they’ll give you an idea of prices achieved, which kind of wines did well and which ones went unsold. Talk to the head of wine sales to find out what their buyers tend to look for and how this fits in with what you are selling.

If you’re looking to get the maximum out of your sale, and don’t mind the hassle, it could be worth splitting different elements of your portfolio between different auction houses. It’s also worth asking whether sales at certain times of year tend to perform better than others (waiting a few months might net you significantly more than jumping on the next scheduled sale), and also whether they have a good database of foreign buyers. The strong dollar, for instance, currently makes European and UK auctions more attractive to US purchasers, while sickly sterling means British bidders are acting at an inherent disadvantage once they buy outside their borders.

Don’t rush it

Auction houses will suggest reserve (minimum) prices for each lot. You can try to negotiate some of these upwards if you think they’re too low, but conventional wisdom has it that you’re more likely to achieve good prices by increased bidder traffic than excessively high reserve prices. Wines that don’t sell are no use to anybody, and an auction house isn’t going to want half your cellar sitting around in its warehouse for two months.

Unsold lots will be put back into the next wine sale, or – in the case of an online seller such as Bid for Wine – listed on its ‘marketplace’ (kind of like an eBay for wine) with a low (or no) reserve price.

Wine cellars are a sizeable asset, so selling them needs thought. But it can be well worth it. At Brightwells, Shave estimates that sales achieve some 70%-90% of their retail price within a week of going on sale. This might even be enough to cover the gas bill.

And of course, once you’ve cleared out a load of space in your cellar, you can set about the joyous business of filling it back up again…

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