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How Does Vivino Make Money? The Vivino Business Model In A Nutshell

Vivino is an online wine marketplace founded in Denmark by Heini Zachariassen and Theis Søndergaard in 2010. Zachariassen started the company to help consumers make better wine purchasing decisions. Vivino earns money by charging its sellers a marketing fee for every bottle of wine they sell on the platform. The company also manages a subscription-based wine club for consumers. Vivino sells advertising spots and consumer aggregate data to interested parties. The popularity of both options is likely to be enhanced by the vast size of the Vivino marketplace and user base.

History of Vivino

Vivino is an online wine marketplace with an app for Android and Apple devices. The company was founded in Denmark by Heini Zachariassen and Theis Søndergaard in 2010.

Zachariassen started the company to solve a problem many consumers face when choosing a bottle of wine: determining the good from the bad amongst the hundreds of different brands for sale.

Though smartphone apps were just beginning to take off, there were almost 1,000 existing wine apps available when Vivino was launched in 2010. Many were run by industry experts, but Zachariassen and Søndergaard were unfazed. Their strategy from the beginning was to build the largest wine database in the world while remaining steadfast to their mission to help consumers make better purchasing decisions.

To build their marketplace, Vivino sent wine labels to India where 50 people manually researched information about those wines and added it to the app. This process continued for 18 months until there was a 70% chance that a consumer could find reviews about a bottle of wine in the Vivino database.

At this point, the company had achieved critical mass. Vivino’s commitment to serving its users who were wine enthusiasts but not wine experts gave it a critical point of differentiation in the market. Vivino also listened to its audience and helped them understand the various wines they were interested in. This high-level engagement increased the likelihood a user would purchase a bottle of wine and leave a review. 

By 2017, the platform had enough user data with which to make recommendations. To that end, Zachariassen and Søndergaard built a machine learning tool that read all the user reviews on a particular wine and compiled a structured description of its taste. This led to some calling Vivino the “Netflix of wine”.

Vivino now claims to be the world’s largest online wine marketplace and the most downloaded wine app. The platform features almost 79 million user reviews on more than 14 million wines.

Vivino revenue generation

Vivino works on the marketplace business model, matching the supply of wine from wineries with the demand from consumers.

The company has several revenue generation strategies, with each listed below.

Marketing fees

When a winery sells a bottle of its wine through the Vivino platform, it has to pay the company a so-called marketing fee.

The exact fee is a percentage of the purchase price and is negotiated on a winery-by-winery basis. Established wineries likely pay a smaller marketing fee than smaller, unknown players.

Subscriptions

Through the Vivino Wine Club, wine enthusiasts can receive six bottles of wine delivered to their door every six weeks. Happily, the wine selection is based on their individual preferences and activity history in the app.

The cost for this subscription is $120 per order.

Advertising

As the largest wine marketplace in the world, Vivino has no difficulty selling lucrative advertising spots to wineries and related businesses. 

Advertising fees are based on the length of the campaign and category competitiveness.

Consumer aggregate data

Vivino also collects vast amounts of consumer purchasing behavior data. This information helps guide the merchandising strategies of various wineries and wine retailers who pay Vivino for access and exposure.

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