What You Don’t Understand About Fine Wine Might Hurt Your Business
If I leave right now, an Uber from the Flatiron building to my apartment on the Upper East Side will cost me about twenty bucks. Some people will say thats a rip-off, but I say I’m paying exactly what it’s worth. Why?
Because that is how supply and demand works.
Let’s use another example. Something a bit more fun, maybe. How about… wine?
Chances are you’ve been in this situation: you’re at friend’s house, for dinner or a party, and someone is going off on what the wine tastes like. They’re saying it has hints of blackberry, or brick or oak or whatever. And you’re standing over in the corner, thinking something like this: “What the hell does oak taste like? Is this person saying they’ve licked a tree?”
Am I right? I’m right.
If you’re thinking that, you probably also think that high-end wine is a total hoax; it’s all made up, and the entire market is a fraud. If you can get a pretty great bottle for fifteen dollars, why pay more? Is it a hoax, just like taking that Uber is a scam?
I can tell you this much: it’s just as much of a hoax as the art world is, or a high-end restaurant charging $10K for a once-in-a-lifetime meal. They can be hoaxes, and more often than not, they’re not. The demand for a product is high enough and supply low enough that the cost is driven to a point that seems ridiculous to some, but actually makes a lot of sense to the business. Think about it: is a stock price a hoax?
I used to think that the amount I was being paid for my speaking engagements was ridiculous. I couldn’t believe this world I was entering and how ludicrous it all seemed. But then I realized that I was getting compensated for more than what I was actually doing for that event. I was getting compensated for the attendance I would bring in. My number was equal to not only my services, my talents, but also the attention I was bringing.
It’s similar to the game of Hollywood movies, or even sports. Is an actor getting $8 Million for a movie more of a hoax than an athlete who constantly gets ridiculed for being over-paid? It’s all the game of arbitrage. That same actor is putting people in the seats. You aren’t just paying for the movie, you’re paying to see them too. Ad budgets are being leveraged against the appeal of that actor or actress.
So, can I taste the difference between a $10 wine and a $100 wine? Absolutely. I live it. It’s what I do. The beauty of wine is that everyone has their own palate, similar to how people have different opinions and tastes in art and music. It’s simple branding. Supply and demand.
My advice? If you don’t care, don’t drink good wine. Because guess what? If you start to taste the good things in life, you’ll realize none of them are a hoax. The first time you fly first class. That first taste of a truly amazing meal. Your first sip of a bottle of wine that cost more than fifty dollars. The first time you opt for an Uber instead of hopping on the bus.
It’s perspective, but mostly, it’s context.
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