Ann: Company Update, page-138

Good one Steve. And also to a few of the comments about the real value of winedepot being the marketplace;

Don't underestimate how valuable the logistics (warehousing, handling, freight etc..) is to the winedepot model.

Dean's previous companies are a good example of this - it's far easier to launch an ecommerce site and partner with wineries than it is to establish a whole logistics network. Even Dean himself has said, the truly great online businesses are built on top of a strong logistics network.

It's like Amazon without logistics...which would you rather invest in, Amazon or eBay?

I used to work for a POS software company, and we had a few of our POS' in cellar doors. I learnt then that most wineries hate logistics. They are excellent at producing wine, but when it comes to logistics they prefer someone else to manage this. B2B logistics is ok because the volume would justify the effort but B2C sucks.

So when WineDepot comes along and offers them a paddock to plate model that instantly cuts their logistics costs and delivery times, it's a very compelling value proposition. In other words, Dean has taken a first-principles approach to the problem. By solving and owning the logistics, all of the other features (marketplace, resellers etc..) feed off of the logistics.

Without logistics, they become like any other eCommerce business. The stronger the logistics network, the larger the barrier to entry for competitors.

In my last post, I highlighted the sheer size of the market for WineDepot and how compelling it is to own DW8 at today's prices. IMO folks will regret selling at these prices. This is a billion-dollar business model, and I can't think of many better than Dean to deliver. Until that day, I'm a long term holder. Happy days.