A broker sells stocks--right?

~One harried day when I sold wine at retail I received a phone call from someone who not only had a deal for me—he had the best deal in the world. He could sell me 25 cases of wine and deliver customers to take them off my hands. All I had to do was to pay him up front for the wine.
~I’ve been around long enough to know the old adage, if it sounds too good to be true, it is. Plus, in New York it is not legal for someone to sell wine without either a wholesale or retail license. This fellow represented no wholesaler that I knew of in New York.
~I made him a counter offer. I told him to send me the customers. I will gladly take their orders and payment and then have him send me the wines to deliver. In New York, wines sold to consumers must go through a retailer with a license.
~He was incredulous that I would not take him up on his offer. He also wondered why I didn’t trust him. At that point, I hung up the phone, and when you get a call from someone pressuring you into buying wine—or anything—you should do the same.
~Ask yourself this question: are you really that lazy not to go to the Saturday tasting at your favorite wine shop to try out the latest find, or to attend one of the big wine tastings that usually show up around town? If so, then a so-called wine broker may be for you, but if you do go with a broker do some homework.
~I’ve been told numerous stories about wine brokers not only pressuring people on the phone to buy certain wines but also pressuring people to buy in large quantities. The worst part of the stories is that, when pressed, my friends and acquaintances tell me that the brokers don’t seem to know much about the product they sell. Whenever I hear such stories I think of those boiler room scam operations that one reads about in the newspapers.
~The wine brokerage operations that I have heard about seem to sell the most obscure wines on the planet—the brokers seem to be the only ones who have ever heard of them. It seems that way because it is likely accurate. A lot of those wines are bottled just for the telephone operations.
~From my perspective, there are two problems with buying wine I’ve never heard of from someone who hasn’t a clue what to say about the wine, let alone try to pronounce it properly (I’ve heard of that happening with brokers).

The first problem is that the wine could be pretty bad. That’s why I either taste before I buy wine or I know the person who recommends a wine to me. I’ve heard that brokers get agitated when they are asked to let you taste the wine.

The second problem is that even if by a remote chance the wine is quite good, it likely is a wine that is also found under a different, and maybe recognized, label. The probability is that the one in the broker’s label will cost much more.

Now that I think of it, there’s a third problem with buying wine from a broker. Some—not all of them—are skirting the law. If you deal with someone skirting the law, odds are customer service may be fleeting, especially if you are unhappy with your contraband delivery.

~Don’t get me wrong. Some reputable wine retail operations sell by telephone and many reputable operations sell wine online. Mostly, however, their sales people are employees and quite often they even know something about wine.
~I’m not going to include links in this post The only broker I know is on Wall Street; judging by my portfolio, you don’t want to know him.

Copyright, Thomas Pellechia
January 2007. All Rights Reserved.