Liquor Store Avoids Selling to Pappy Van Winkle Flippers

There’s a trend in American whiskey. People buy up all the special edition bottlings and they resale the Pappy, LE Four Roses, Buffalo Trace Antique, etc., in their respective markets at ridiculous prices. Meanwhile, some liquor stores set the prices for limited editions beyond the reasonable pricing structures. You can read about that in my blog post, “Who is to blame for $6,000 Pappy Van Winkle?”

The high-end bourbons are becoming harder for the common man to find let alone buy.

Apparently, liquor stores are tired of this phenomenon and some plan to take note of customers buying caseloads of product. One major liquor store told me that they will not sell limited edition bourbons or Pappy Van Winkle to known flippers, people who intend to earn a profit in the secondary market. The store requested it not be identified, but said they have a list of known flippers in the United States.

I asked Brad Williams, the spirits buyer for Louisville-based chain Liquor Barn, about flippers and whether they plan to limit quantities sold. These are his comments:

At this point, we have no plans to {ban flippers} but only because we have not taken the time to research the exact individuals who are flipping the bottles.  We typically limit everyone to one bottle anyway, so if we did, it would be hard to monitor the thousand bottles that went out of our stores on Pappy day, for instance.

I hear more about our customers acquiring limited release bottles and then trading them on bourbon forums and blogs for bottles they could not get.

I suspect a little more flipping goes on out of state because  a lot of the out of state accounts do not sell out in minutes to hours like the stores in Kentucky do.  I imagine a flipper might be able to get in on quite a few rare releases before out of state accounts know what hit them.

Again, at the sheer amount of bottles we release as a chain, it would be hard for us to monitor that especially since we just let them line up and go first come, first serve.  Hardly any of the bottles are held under names.

I don’t expect the bourbon interest to stop anytime soon, and there are hundreds of consumers joining the bourbon bandwagon every day. Brands will continue to drop age statements, such as we’ve seen with Very Old Barton and Jim Beam Black, and limited editions will continue to draw dozens to a hundred of people standing outside waiting in the cold.

Now, we see liquor stores trying to somewhat regulate the craziness caused by damn good bourbon. I guess, like it or not, this is just all part of the bourbon evolution.

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18 Replies to “Liquor Store Avoids Selling to Pappy Van Winkle Flippers”

  1. I have to search all over for these bourbons but the bourbon bars always seem to have all you want to drink-for a highly inflated price per drink. Maybe it’s time to learn to drink scotch-heaven help us all!

  2. What I don’t understand is why does a liquor store care? They get bottles at their prices, set their price to make a profit and then sell the bottles. What happens to them after that…why would they care?

    Each store has every right to do with their bottles what they want. I can understand not liking it if somebody who never sets foot in their store the other 11 months of the year comes in and takes a bottle that they’d rather go to a regular customer. But then sell to your regular customers only. And if a regular customer wants to sell a bottle illegally, they will likely use those proceeds to buy more alcohol from that same store.

    This isn’t about whether I think flipping is OK or not, nor do I care to have a discussion on the fact that it isn’t exactly legal. I’ve just never understood why a store would even care what happens to a bottle once they’ve sold it.

  3. Firstly, Fred, I hope you don’t mind me posting here – I’m not trying to spam, and please feel free to hide/delete my website if you like.

    Just a few thoughts – the tactic most stores tend to take is to simply sell one bottle per customer. They still might be flippers, but that lowers their total cash opportunity for flipping.

    As to the greater issue (or taking the more involved tactics described by the anonymous shop above), you can really break it into two groups. Pappy Van Winkle, and to a lesser extent the Buffalo Trace Antique Collection are currently priced well below their genuine market value, largely because demand has grown and supply hasn’t. It’s likely that he situation with Pappy won’t change much, but it is fair to note that on a day to day basis no is paying $6,000 for Pappy Van Winkle; not even for the 2009 ORVW Decanter Set.

    The second group would be the tertiary market. In my state Stagg Jr. sold out as quickly as BTAC did. If that’s because people simply settled for it, fine, but my guess is that flippers are hoping to at least double their money (they can triple it with BTAC, and at least quadruple it with Pappy). This behavior is likely to discourage flipping more than anything else, because they’re unlikely to even double their money on Stagg Jr.

    It’s important to note that the perception of the secondary market as a gray or even black market helps fuel some of the more insane prices out there. The skilled flippers know that they can buy rare bourbons in well stocked markets and then list them on Craig’s List in markets with zero supply at exorbitant prices, and since it’s hard or impossible to search all Pappy Van Winkle (or other listings) in the US to compare regional prices, the uniformed may be duped into paying $2,000 for a bottle that they could have had for half that price. We see it with new sellers on our site who think they can get away with it before realizing they’re listing right next to dozens of cheaper examples of the same bottles.

    In short, the secondary market is here to stay, but I do see prices stabilizing and even dropping a bit, and I also see tertiary flippers barely breaking even on their “investment” and falling out of the game. I’d even argue that the smartest thing Buffalo Trace could do at this point is raise their prices 20% – that would eat into potential flipper profits and discourage some of them, and frankly George T. Stagg is worth ever penny even at $120.

    I hope this was helpful in some way; I really enjoy your site! My wife and I loved your book as well!

  4. Tom’s point is invalid. If a store doesn’t sell to certain flippers, they immediately talk trash about said store. If the store charges aftermarket prices like Tom said, they talk even more trash. Being in the industry many years, I will tell you: you cannot win with these guys. They think they are entitled to EVERYTHING.

    Last point: I’ve also noticed that I can spot a drinker a mile away. The same goes for flippers. Flippers are have flaky personalities. Drinkers are decent dudes. It’s easy to tell the two apart. Tom, by your perspective, I can tell you are a flipping whore.

    1. That’s not my point at all. My question is why does a store care?

      You don’t know me, no need to make irrational judgments. I just don’t see why a store would care what happens to a bottle when they’ve made their mark and it leaves their property.

        1. I’m not arguing, I’m asking. And again, you don’t know anything about me. But this is entertaining.

    2. Craig, you sound like you might own a store that deals with all of this pappy craziness. Whatever path you choose to deal with pappy, make sure that it helps your overall sales. Reward your good customers with the good stuff and build new customers with some of the lower end pappy. Declaring an all out war against flippers is only going to hurt your business in the long run.

  5. I tend to agree with Tom. I have never understood why the liquor store would care as long as they are making a profit. I think it presents a great opportunity for the business to reward regular customers of have some sort of promotion or event. Craig, all flippers have flaky personalities? Seems like a broad assumption. I would think flippers would either be whiskey enthusiasts or just good ol red-blooded American entrepreneurs! So, I am interested to hear from a liquor store owner – why do you care if a bottle is flipped? By the way, I have never flipped a bottle of booze in my life.

  6. I think the reason you are seeing a backlash from store owners is the amount of time spent for so little return. All limited edition bourbon sales make up less than one percent of revenue. Yet they make up 95% of phone calls this time of year. Even if we charged crazy prices, limited releases would still not do much for the bottom line.

    In a normal business setting, a group of products with such low supply and revenue with such a high amount of labor would be dropped.

    However, We keep them around to reward our good customers and deal with the hassle and endless phonecalls.

    1. Eric is spot-on! Finally an intelligent thought on the subject. 100 calls a day from people wanting Pappy. Here’s the deal: We don’t make alot of money selling them, and they are super hard to get. Not to mention, everyone acts like a baby when they don’t get what they want. Why are you special? If any owner was smart, they would just flip themselves. You flippers think you’re smarter than everyone. Everybody has the internet, it’s easy to flip. If a customer is a good guy and loyal shopper, I see no problem with selling to them (of course ripping the foil first).

  7. I think stores should just sell these bottles at secondary prices and give a near retail discount to regular customers they know aren’t going to flip for a profit. Any doubt, 400% markup. Someone will pay, and when they do, you’ll know they’re not a flipper. At that point offer them another special bottle at retail and it’s all good.

  8. Whiskey flippers are no different than people who buy and resell tickets. As long as there is a secondary demand, someone is going to find a way to profit from it. You may think you know who’s a drinker and who’s flipper, but deal with all of your customers respectfully because even flippers dring whiskey, beer & wine and you don’t want them buying from you competitors.

    1. It’s a little bit of a chicken/egg thing though, innit?

      I mean, there’s a secondary market because there’s a limited supply of the product.

      But at least part of why the broader market’s supply is *so* limited is because multiple individuals buy up large numbers of tickets/bottles in order to make a profit.

      There’s never going to be enough for everyone who wants some, but the case-at-a-time flippers only make it worse.

  9. Eric, I can only imagine how annoying the calls get at this time of year. And completely agree that stores should utilize these bottles as best they can to benefit their store when nobody is getting rich off their retail price. Whether that be an event that brings in tons of potential customers or keeping regular/good customers happy and buying all their liquor throughout the year.

    But I still have my question that nobody has addressed, other than being called a “flipping whore.” Why does a store care what happens to a bottle once they have sold it?

    I’m not talking about how much a store should/shouldn’t charge nor am I talking about who they should/shouldn’t sell to. Nor am I talking about how annoying customers are or are not.

    But once it is sold at whatever price they choose to whomever they choose to sell it to. Why do they care what happens to the bottle?

    I find this interesting and those who are actually discussing it, I appreciate the discussion.

  10. Tom, I think the short answer is most store owners are enthusiasts of fine alcoholic beverages. They also value their core customers, and would like to see these fine products enjoyed by said customers at fairly reasonable prices.

    I’m not sure what the long answer would be.

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