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Wine Trading - Where to Start

How you can get involved in wine trading business?

The stock markets can be volatile and often fluctuate drastically during the year. Many investors have been turning to investing and trading fine wine in order to make a second income. You don’t need a large amount of money in order to start investing in wine, so it is appealing to smaller traders and fine wine enthusiasts alike. You just need to decide which wines to drink, which to keep and which to sell.

Decide which wine to drink and which to sell
When you have quality wines, if you wish to get involved in wine trading business, choose the wines
you want to sell and the method of getting them to the wine market. (photo-nic.co.uk nic - Unsplash)

Using a Wine Fund Manager

Investing in wine funds, utilising a fund manager generally has less financial risk. The wine market doesn’t work in the same ways as cash or stock investment, so the approach to trading is slightly different. A wine fund manager should have more experience of the changing market and the trends in investments. They should be able to negotiate better purchase and sale prices, as well as having access to rare or unusual wines. It is a complicated process if you have to estimate the value of a portfolio of wines, and an experienced fund manager should be able to help with this.

Using wine trading platforms

If you are a private collector or a serious investor, using a wine trading platform, not dissimilar to the Forex platforms, can help you buy and sell wines, but without having to use an agent or a broker. You are essentially cutting out the middleman in the trading negotiations. Sites such as Wine Owners and Cavex are convenient to sell products, and make an income with a lower commission from traders. What is more, nowadays, the majority of traders opt for online platforms to make money, as it’s a much more time-efficient way to earn income. When it comes to commission, wine merchants will often charge 10%, however the commission charged by Cavex currently stands at 3%. This can make a big difference if you are trading in quantity.

Start small with your wine trading business
Trading in fine wines can started with a small investment, without a need to spend a lot,
until you "feel your way" around the market and see how things work, minimizing your risk.

What if I have a small portfolio?

If you only have a small portfolio, or looking to make minimal investment, there is nothing wrong with getting in touch with a wine merchant to deal with your sales and purchases. It may be worth doing some research into market values of the wine that you have, as these can change. One of the advantages of using a merchant is getting sound expert advice, as well as a more personal service.

In these changing markets, it is always worth considering investing into wine. After all, we have been drinking wine for over 2,000 years, and will no doubt continue to do so for the foreseeable future.

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