Starting a collection

With both the consumption and investment perspectives understood, how does one start with collecting fine wines? Provenance is a crucial factor in determining the quality and potential future value of the wine. Wines with the best provenance come directly from the producer, but most producers do not deal directly with end buyers. As a result, one has to rely on trusted merchants, brokers, and auction houses to secure the desired wines. The finest and rarest wines are not worth buying unless you can trust the provenance.

Merchants vs brokers

Merchants build relationships with wine producers, and keep inventory to supply clients. Some merchants focus on particular regions where they have a strong network of suppliers, while others aim to provide a wide collection from multiple regions across the world.

Brokers tend not to hold inventory, but scour the world for the best wines to offer their clients on an agent basis. This means they charge the seller a commission upon sale, but do not pay for the wines up front. Brokers tend to have lower margins to ensure a quick turnover of business.

While merchants can also act as brokers, they naturally prefer to see their own portfolio of wines with higher margins sold. Brokers, on the other hand, is indifferent between the wines they offer as long as they believe in the inherent quality of offered wines.