Our margins (and industry standards)

The wine retail industry typically operates on margins between 30% and 50%, depending on the type of retailer. Big-box stores (e.g. Total Wine and Grocery Stores) might run lower margins based on high volume. Boutique shops and fine wine merchants tend to sit in the 40–50% range. (Brick and mortar Natural Wine Shops sometimes work on 100% margins! Trendy stuff natural wine is.) And finally, restaurants mark up wine 200–300% over retail (i.e. that $20 bottle on the shelf becomes a $60–$80 bottle on a wine list. Yeah, we know. Criminal. Alcohol has long been the subsidizer for restaurants. Ironically, this is why restaurants are now failing.)

At Harvest, our average margin per bottle is about 35%. That's at the low end of the retail range because we are an e-commerce store with low overhead (minimal rent), and because... it's intentional. We're trying to make wine as affordable as possible, but it's hard! You'll see why below (spoiler: the bottleneck is shipping).

Here's how it actually breaks down across our shelves:

• Our highest-margin bottle ever: ~62%

  This was one wine where we worked out a special deal directly with the producer. Even at this high of a margin, it was the cheapest price you'd find for this bottle anywhere. We don't even think it's for sale anywhere else online. The margin was higher because we got an exceptional wholesale price, not because we inflated the retail number.

• Our most expensive wines: ~15–30% margin

  We deliberately keep margins thin on premium bottles so they remain accessible. A $60 or $80 wine doesn't need a 40% markup to be worth carrying and make the math workout for us (and for you). A $100 bottle at 40% margin would make us $40; although that's great profit, we'd rather make that bottle a bit more accessible in price by reducing the margin. And when you buy 6 or more bottles, the math works even better for both of us because it helps offset shipping costs.

• All the bottles in between: a sliding scale

  We use a sliding scale margin system. The less expensive the bottle, the higher the margin percentage (though the actual dollar amount we make is still small). The more expensive the bottle, the lower the percentage. This allows us to justify stocking budget wines (while keeping them still affordably priced) and our premium wines competitively priced.

• Note: with shipping costs being weight based and not based on package value, sending 12 value priced wines to a customer makes a lot less financial sense than 12 expensive wines. This is a reason why value bottles need a higher margin to justify stocking them.

Which brings us to shipping.

The real cost of shipping wine

Wine is heavy. A standard bottle weighs about 2.5–3 pounds. A full case of 12 bottles comes in around 35–40 pounds with packaging. Shipping companies charge based on weight, distance, and increasingly, dimensional volume. And there are surcharges for age verification layered on top of the base rate that most customers never see.

Here's what it actually costs us:

• UPS surcharge: $8.70 per shipment

  UPS charges an $8.70 fee on every single shipment of alcohol on top of the standard shipping rate. (This is largely due to the added labor of the UPS driver knocking at the door and weighting to see if someone is home for a signature. It really slows down their efficiency.)

  For years, we absorbed this cost entirely. But starting this year, we've chosen to pass that through to the customer.**** It wasn't a decision we made lightly, but eating $8 on every order of one or two bottles was eating into the thin margins that keep the business afloat.

****We cover this $8.70 cost and the cost of shipping on all orders over $350 and on orders of 6 bottles or more (even if under $350).

• Cross-country case (12 bottles): ~$50

  Shipping a full case from San Diego to, say, Florida runs about $50, which works out to roughly $4 per bottle. 

• Within California (3 bottles): ~$25

  Even shipping a small 3 bottle order within the city we are based in (San Diego) costs about $25. A full case within California is about $40. Shipping companies front-load their pricing — the first few pounds cost the most, and then it scales more gradually until you hit the 50-pound threshold, at which point additional handling surcharges kick in and costs jump again.

This is exactly why we offer free shipping on orders of 6 and 12 bottles. On those larger orders, we absorb the shipping cost using our margins. We make less per bottle, but we move more wine, you get a better deal, and everyone wins. And on top of this, we run frequent promos for our newsletter subscribers — it's our way of saying thank you for buying in quantities that make the math work for a small business.

We're not the cheapest wine company on the internet. We know that. But when you factor in our free shipping options on bulk orders, our regular promo codes, and the quality of what we're curating, we believe the value is genuinely competitive. We'd rather be honest about pricing than play games with fake "compare at" prices or misleading discounts. This is par for the course for all the "established" wine shops on line that sell a lot of Napa Cabernet and "only 90+ point wine". It's called lying, but the wine industry calls it marketing.

How tariffs affect what you pay

Tariffs on imported wine have been a moving target over the past year. A 15% tariff on European Union imports took effect in August 2025 as part of a U.S.–EU trade deal. After the Supreme Court struck down the original IEEPA-based tariffs in February 2026, new Section 122 tariffs of 10–15% were put in place almost immediately. If you didn't know tariffs were a thing right now...that's impressive...and now you know.

Here's the thing most people don't realize: a tariff at the border doesn't translate to the same percentage increase on the shelf. In the traditional three-tier wine distribution system (producer → distributor → retailer), each tier applies its own percentage-based markup. So a 15% tariff at the import level can translate to a 25–50% increase by the time it reaches you. A $1.50 tariff on a bottle at the border can become $3–$5 more on the shelf.

At Harvest, here's our approach:

• We do not eat the higher costs from tariffs. We're a small business and we can't absorb price increases from our suppliers and stay in business. What we do instead is maintain the same margins we've always run. When our wholesale cost goes up, our retail price goes up proportionally. No more, no less.
• We adjust prices in real time. When we get updated pricing from our importers and distributors, we update our retail prices to reflect the new cost. We don't round up, we don't pad in a buffer, and we don't speculate on what future tariffs might do. The price you see reflects what we're actually paying right now.
• When prices come down, our prices come down. If our suppliers lower their prices because tariffs get reduced, or because the dollar strengthens, or because a producer offers us a better deal, we pass that savings through. Our margins stay the same, and you pay less. We aren't playing the old COVID game of raising prices temporarily only to hope that everyone forgot they were raised, and establish them as the "new normal".

Beyond tariffs on the wine itself, it's worth knowing that rising wine costs aren't limited to imported bottles. About 70% of the glass bottles used in American winemaking are imported. So are most corks, French oak barrels, and a lot of winemaking equipment. All of those carry their own tariff surcharges now, which means even domestic wines are seeing cost increases from the supply chain side. It's a challenging environment for every wine business right now, from the vineyard to the shelf.

How wine retail pricing works (a quick primer)

For anyone curious about the broader mechanics, here's how a bottle of wine gets from a vineyard to your door and what each step costs:

• The producer

  The winery or estate sets an ex-cellar (FOB) price based on their production costs: farming, harvest, fermentation, aging, bottling, and storage. A producer typically operates on about a 50% gross margin — but that has to cover land, labor, equipment, and years of aging before they see a return.

• The importer/distributor

  For imported wines, an importer buys from the producer and adds their margin (typically 25–30%) to cover freight, customs, warehousing, sales teams, and regulatory compliance. In some cases, we bypass traditional distributors and work directly with importers or producers, which helps keep costs down.

• The retailer (that's us)

  We buy from the importer or distributor and add our margin. Industry standard for wine retail is 35–40%. As we mentioned, we average about 35%. Our costs include rent for our temperature-controlled warehouse space, Shopify website membership fees, wine packaging, business insurance, credit card fees, and then a very very very very limited marketing budget. We are probably missing something there, which is also probably why we aren't turning a profit...lol.

• Taxes and fees

  Federal and state excise taxes, sales tax, and various compliance fees all get layered on top. These vary by state, which is one reason we can only ship to certain states right now.

Every step adds cost. When you hear people compare online wine prices and wonder why there's variation, it's usually because different retailers have different wholesale relationships, different shipping strategies, and different margin philosophies. Our philosophy: keep it lean, keep it honest, and let the quality of the wine speak for itself.

Why we do this

Andy  (me) reinvests every dollar this business makes back into Harvest. There's no outside investor writing checks. There's no private equity fund optimizing for exit multiples. This is a labor of love.

Every pricing decision I/we make comes down to one question: does this let us keep doing what we're doing while treating our customers fairly? If the answer is yes, we move forward. If the answer is no, we find another way.

We know that times are tight. We know that a bottle of wine is a luxury for so many people. We don't take for granted that you choose to spend your money with us, and we want you to know exactly what that money goes toward: great wine from honest producers, stored properly, shipped carefully, and priced as fairly as we can manage.

Thank you so much for supporting our small business. It means more than you know.