Hey, watching this live and you are hitting on all the things I believe and think is fair, I will purposely buy a bottle based on what I know what my friend like to drink and have a hard time finding, I am always good with taking fair trade or heck , pay me what I paid, I am not a believer in paying secondary prices and have a 10% max up charge I will pay if I want it but also believe in drinking and sharing
I don't pay secondary market prices! A $40 bottle for $59 is kind of cheesey but not over the top! A $40 bottle for $99 or $200 is wrong on many different levels! There's great whiskey on the shelf at regular prices! Cheer's!
For the most part, they do not have the bottles that trade on secondary for sale at the distillery. The few that do release bottles at that level do so randomly. There are locals that stand outside the gift shop every day just to see if they are releasing any rare bottles that day, only to be disappointed most days.
@@BourbonRealTalk Yeah, I live here and see the lines at Buffalo Trace. They do post what they'll have for sale that day on their website so sometimes it works out.
@@lofiwire7917 Yes, but BT doesn't sell BTAC or Van Winkle line at the distillery. You might get a Blanton's. I can find Blanton's here. I did get on the last time I was at BT!
I'm not going to tell you if I participate in secondary markets or not, buuuuut here's an educational video where I tell you all about how it works. Haha. Good video though! Thanks for the info. Quite interesting. Also, I need to look up what is defined as "private transfer of alcohol" out of curiosity. So if my buddy comes over to my house and I toss him a can of beer is that "private transfer of alcohol"?
In Texas, where I live, it is technically illegal to gift someone a bottle of alcohol. Of course it is not enforced that way, but technically it is an unlicensed transfer of alcohol. If you are looking to get more connected I would like to invite you to join our free community. facebook.com/groups/bourbonrealtalkcommunity
Great video. There is so much to agree with. A lot of my interests over the years have had to deal with secondary hype increasing prices...cigars and Harley's in the 90s, ammunition prices in the 2000s and even now. I am glad I started REALLY loving bourbon 9 plus years ago when you could buy fat bottle Weller 12yr for 50 bucks and ETL for 34 bucks no problem. Thanks
I so wish it was just a “Bourbon Brotherhood”. If you get a double of a great bottle hook up a buddy, or trade it bottle for bottle. Never going to judge someone for flipping, that is what a free market is all about and I don’t know their financial situation. Just wish it wasn’t the case, as it is a “black eye” for those of us that are legitimately in the hobby.
Agreed. Generosity is only possible when everyone has their base needs met. When there is such a disparity between the haves and the have nots, buddy systems break down. I do not know how many cost plus shipping groups I have seen come and go. Each group has a rule that you let bottles go at cost plus shipping. If you take a bottle you are supposed to give a bottle. Inevitably, people stop participating because they don't have a bottle they are willing to give up, and they know if they take anything they can get kicked out. The group usually starts off strong, then someone takes advantage, they get kicked out, fear grows, activity drops, and the group dies.
So true my man! Same thing goes for the Buddy you look out for 3-4 times and there is never reciprocation. I don’t “help” buddies expecting things in return, but ultimately, any relationship that isn’t reciprocal dies. Thanks for the content you out out! I really enjoy and appreciate it! God Bless you Brother.
In my opinion, it was not the pandemic or the gamblers that caused the rise in secondary prices. It’s the government giving everyone free money… once the handouts go away, the secondary market will go back to its original state. Unfortunately, that will be quite a while as people have tied up a lot of cash into overinflated bottles….
Overall decent info but a very broad overview and lacks alot of context - The secondary market did not start as a means of trading current allocated bottles but as a means of trading Bourbon produced from a bygone that will never be produced again - basically everything bottled before the mid 2000s that were barreled into casks made from old growth american oak of which there is none left - the grains on old growth oak are visibly tighter than anything harvested today - these bourbons also saw extended aging during prohibition and again when demand plummeted in the 80s to 00s and bourbon sat in cask for 15-25 years which previously never happened outside of prohibition and even then the max is around 18 years... Allocated bourbon sprung out of brands and extinct stocks being consolidated under big houses like Buffalo Trace - when you talk abut MSRP and allocated brands you have to factor in how bars/shops get these bottles from suppliers - they have to essentially buy large amounts of low end - high volume - high margin products to receive a small amount of "allocated" bourbon - so the their entire beverage program is heavily influenced / dictated by suppliers and the entry level products are thus not competing in the market on their own merit but rather coerced, this is why BT sets "MSRP" 90% below market rate - because they've already made their nut on pallets of vodka and BT base bourbon at a 300% margin and can produce endlessly and quickly - Look at Macallan, MSRP is much closer to current market value because they lack high volume low cost entry level brands to factor into equation .. In regard to supply catching up with demand there are 2 major factors not mentions - increased demand from the east which is largely null in regard to bourbon and more and more of the 3-4 billion people in the easter hemisphere are thrust into middle upper classes only a small percent need to pursue bourbon to affect demand. Then there is the cost of raw materials - remember whisky was created as a byproduct of excess grain - as the global population grown and habitat loss surges equally the cost of grain, water and wood will only increase.
Solid points. My research shows the growth of the secondary was not fueled by dusty hunters, but I have no doubt that was a contributing factor. I would also disagree with your logic on BT's MSRP. My working theory is they have models that show additional increases in prices would lower demand below what they need it to be when the 1.3 billion dollars they have invested in expansion brings more product to market. Keep in mind BT was years into excessive demand before they started a major vodka brand. All other points have been covered in other pieces.
@@BourbonRealTalk right but I was referring to the origin of the secondary market which originally started back circa 2008-2012 on ebay and only moved to FB after ebay shut down alcohol sales... The market at this time until about 2016 or so was largely driven by a small group of guys hoarding a shrinking supply of bottles that will simply never be replicated - mostly from the 2 eras of bourbon production in which barrels sat longer than normal along with market disruption (brand changing hands, distilleries shuttering etc)... in the mid/late 80s on the 2 private bottlers KBD (Willet) and Old Commonwealth (Van Winkle) began bottling in fervor a plethora of extinct stocks from closed distilleries like Stitzel Weller, Boone, Bernheim, Schenley, Old HH etc... What put Van Winkle on the map was the 20yr Julian bottled using the old Boone stocks he bought from Wild Turkey a few years prior along with other various Stitzel Weller sourced labels - when his father sold Stitzel Weller in in 1992 part of the contract was that they could still purchase barrels to be bottled at the Old Commonwealth distillery... So all in all the circumstances surrounding the bourbon industry during this time produced a multitude of stocks that we will likely never see replicated and a handful of guys bought every single bottle they found for over a decade progressively paying more to pry them form reluctant hands - and have only recently slowed down with prices on the truly rare stuff getting well into the 5 and even 6 digit range... not discounting anything in the video but simply adding context/back story as it really all began with a very small group of guys who simply loved the bourbon from the glut era of 80s-00s... These bourbons are chemically different than anything bottled today and the overwhelming consensus is the wood - barrels made from several hundred year old trees had a significantly higher concentration of oils and sugars... in regard current allocations there is no way BTAC or current VW is profitable at wholesale costs without low cost / high volume products factored into the equation - it's a common marketing practice across several industries... It's pretty evident when you compare strategies from BT vs Beam Suntory or Michters... I think long term the secondary market further splits between what you described above and the old stuff just moves more and more to auction, retail or museum type settings - to use precious stones / metals as an analogy its basically black opal or pink diamonds vs quartz...
Your show has taught me a lot I have been tempted to buy way above retail prices. The information you have provided has taught me to be patient and enjoy the search. I do have a question are sites like Cask Cartel, Reserve Bar considered secondary market
That depends. If they bought the bottles outside of the three tier system and offer them up for sale then they are secondary. If they bought the bottles from a wholesaler and legally sell those bottles to the public then they are just an overpriced retailer. If they acquire their bottles legally, but sell them illegally (like shipping to a state that doesn't allow shipping into the state), then that would kind of be secondary. Definitely a grey area.
I have an idea.. invest in expanding Buffalo trace to the size of Jack Daniel's. I am not in secondary but my local liquor store sells 25% or more over msrp.. they had Weller Special Reserve for $99
They started a 1.2 billion dollar expansion in 2016. Their capacity will go from 1200 barrels a day to 2400 per day in the next year...then we wait for the new whiskey to age.
@@BourbonRealTalk and BTW, I don't get this secondary market. Today Im gonna buy OGD bonded and enjoy the hell out of it. No idea why anyone would pay $950 for a bottle but that's what another dead economist Carl Menger would describe as "subjective value theory"
@@freddybastiat8299 The manipulation of the ill informed masses in an attempt to control their vote is something that really pisses me off. There are so many young people who have a completely distorted view of human nature and capitalism because of political hacks telling them what they wish were true...instead of what they need to know...that I am scared for the future of the USA. I typically avoid politics, and when I address something political it is usually a rant about something associated with the concept of equal outcome vs equal opportunity. If people really understood capitalism and human nature they could spend their time working towards a goal that actually has a chance of success. Sorry...no more ranting today.
@@BourbonRealTalk understood, I was just talking basic economics which unfortunately turns the discussion political eventually because of the stupidity of politicians on the subject.
I'm sure that if the world had more people like you we'd have a lot better whiskey to share. Thanks for your hard work and dedication to this cause because life is so much easier when you enjoy what you're doing. Your detail on the secondary market was really educational and awarding. I hear from the other whiskey tubers "secondary this or secondary that" when I really never paid attn to what it all meant. Believe me, brother, this explained a lot for me and I now have that education from you. Just one question, why aren't you a college professor?
I am a christian and always believed my "spiritual gift" was teaching. A few years ago I realized my heart was filled by teaching about any subject. I found an outlet, but I don't think I would have made a good professor. I like to teach people who are seeking understanding about the subject I know about...not people who begrudgingly listen to me because they have to. So glad you enjoy the channel.
This was really interesting. Thanks for the education. I thinks it’s kind of funny how every time I pick up a new hobby, I discover that there’s an entire subculture surrounding it-I’m always totally oblivious to that going into it-but then I’m pleasantly surprised to discover its cult-following. I’m seeing that it’s going to be no different with my new interest in exploring the world of brown spirits, particularly whiskey. Cheers!
Damn, we can always count on randy for the deep dive down the rabbit hole. As someone who has never had a Facebook account this is all very enlightening. I see people talking about this stuff all the time in the comments here on TH-cam, but I never knew how deep it actually goes. I love whiskey and I have been drinking it a long time, but there is a world out there that I know little about. I find a handful of liquor stores with good selections, I buy what appeals to me from the selection they have available on the shelves, and that's that. The little $50-100 a week that I spend on whiskey is never going to get me on any big spender's list, the stores are not going to call me, or put anything back for me. And I am okay with that. There's plenty of great whiskey on the store shelves, and I have no interests in chasing some elusive magic bottle.
50-100 a week is enough to put you on their radar. They don't mind letting a valuable bottle go so a loyal customer like that. Always appreciate the support of the channel.
They are commercially produced fragrance oils, similar to essential oils, but designed to add scent to candles, perfume, lotions, etc. They are suspended in carrier oil. Neither the fragrance oil or the carrier oil is expected to degrade with time. We have had sample vials for years that have not had a change in their scent. Hope this helps.
😂. Totally get it. That is likely a $3,500-$3,750 profit...which is nice. I would say that the value of the experiences I can create with an open bottle like that far exceeds the cash I could make, so I open them. But I don't begrudge you your profits. Cheers!
@@BourbonRealTalk secondary price made it impossible to just open the bottle. I ended up donating the profit to the shelter I volunteer at because fuck money. My friends want to kill me though :)
Stuff can still be super over priced and not be on the secondary market. A neighboring state has privatized sales. The county I share a border with sells "x" whiskey for 22.99, went to a store at the beach in that same state, "x" bottle was 49.99. it's not just the secondary market driving up prices. A wise man once said, " a whiskey is worth whatever your willing to pay for it"
I have covered this in other podcasts, but each store sets it's own prices (except in control states). When the store doesn't follow MSRP there is no recourse for the producer. They are not allowed to withhold product from that retailer...which is why I am against price gouging by stores.
@@BourbonRealTalk the stores being free to charge what they please isn't the problem though. The problem is all the government restrictions that violate the rights of producers, distributors, and retailers to enter (or not enter) into agreements with others. Just like you don't have to buy that bottle that's on the shelf for 10x MSRP and are free to keep your money and leave without it, producers shouldn't be forced to participate in a system that allows retailers to sell their products in ways they don't like free of consequences. Once again, the free market isn't the problem. Government interference is the problem.
Hey big Randy. Luckily found your channel months back and happily subbed. It is refreshing and inspiring to see a conservative, every man put out quality content and speak genuinely and openly without a hint of any desperate vying for subs or support. I also must add i love how you're videos are edited. Unlike too many others that quick cut every 2 seconds and that drives me nuts. Seems very unnatural, as to where you are an excellent speaker and can carry on naturally, fueled by your passion and knowledge for all things whiskey. Your authenticity shines right through the screen. Those that know, can feel it. Looking to pick up your whiskey aroma kit soon. Big thanks and power on. God bless
This means a lot to me! I don't watch a lot of other whiskey channels because I am worried about plagiarism, so I am not intentionally doing my content differently. I just produce the content I would have wanted, to teach me what I am interested in, and hope that like minded people find it. I do identify as a fiscal conservative, but I don't really fit into any title when it comes to my social politics. Honestly I don't think it matters that much. We all want the same things, just think differently about the best way to get there. Cheers!
Thank you! I have noticed that when I post the link in whiskey clubs the algorithm doesn't show it to many people, so if someone else posts it I feel like it gets more reach. Cheers!
Interesting video. I learned a lot, as I do from all your other videos and podcasts. Your Whiskey's buyer's guide video was also great. Nice reminder...Thanks for all the great content!
YAHOOO....and this is why I love your videos... You always tackle the tough subjects... And make people aware of what's going on...your the best out there...thank you for all your hard work..Carry on greatness my friend.... Cheers to the max...YAHOO from North Attleboro Massachusetts
The black market is the black market is the black market. I've been calling it that for years because that is what it is. It doesn't have a bad connotation, it's just real. Plus it gives a little pizazz, and exotic flavor. It's as American as bootlegging, and everyone seems OK with that term.
Appreciate the detailed info & perspective Randy. Some of this I knew and pieced together on my own but there was a lot of new info. Keep doing what you're doing!
How about the people that work with store owners that flip bottles for the store owner on secondary and it never hits a shelf and profits are split with both parties. Happens all the time and that one really just gets me worked up.
I hear you, but if you know what the store goes through to get it they would argue they need the extra cash to cover loses on the vodka they had to buy etc. I would rather them make the extra money quietly than have them put it on the shelf at a ridiculous price and damage the credibility of the brand. This explains it a little better: th-cam.com/video/7cd0gbXT7VI/w-d-xo.html
@@BourbonRealTalk I understand they have to purchase other items to get different bottles, but they can sell those too. They took a risk of opening a store. Then you have placed like Kroger, that the employees are selling the bottles on the side too. I don't see how it could damage the credibility of a brand, it could maybe damage the store if anything.
@@markshaw9361 The people who purchase bottles at the gouge stores are inexperienced whiskey drinkers or friends/family of one. They walk away thinking the whiskey is extremely over priced compared to flavor, and decide they don't like the brand. This is the thing the producer was trying to avoid when they decided not to raise their price to market value. They know they will be at market value at current price when new capacity comes online. Retail stores have the ability to fuck up this equation without permission from the producer without repercussion. If a store lost money trying to get the bottle, and they need to make up the lose by selling the bottle for more than MSRP I would rather than them sell it through a proxy on the secondary than them drag the brand into it by putting it on the shelf for the high price. Large retailers are immune from the wholesaler manipulation and this theory would not apply to Kroger and the like.
Tons of information in this video that was totally new to me. I had a vague sense of how the secondary market worked for whiskey the US but the details of things were pretty illuminating. Thanks for sharing, Randy!
It’s not just bourbon my friend, every damn thing in this world has a secondary it seems lol. Just the world we live in. Also I’m still waiting for your workout and nutrition videos ha.
😂 what kind of dogs? we had to say goodbye to our youngest, 4 days before his 4th birthday. He was a Jack Russel/Beagle, Jackabee if you will 🐕. Always tough, I've been to funerals for family to acquaintances, have cried maybe 2x, but man I am a straight broken soul when it comes to the rainbow bridge....
Both of my dogs are Cavalier King Charles Spaniels. I had a lab that I had to put down about 8 years ago. I didn't want to go through it again, so I said no more dogs. My wife begged for a cavalier, and I am not good at telling her no...so we got too. Now I love it of course, but that breed has heart problems and one of them is starting to show symptoms. Just want to keep them around as long as I can, so I feel your pain. Cheers!
supply and demand + human nature ! the best solution, if BTC can flood the market for a couple of years! guarantee all flippers will quit! and no more 2nd market!
There will always be flippers aslong as there are those who buy from flippers. If people would stop buying from flippers that market will instantly evaporate.
I addressed this argument in the piece. That can not happen. Human nature prevents it. If you can not get rid of the secondary then the question becomes how do you manage it.
what about the service flippers provide...there are guys who make more money with time spent working than time wasted chasing and the 3x MSRP makes sense to them
@@johnj.baranski6553 I personally think the world would be a better place if flippers pulled out of the market, but that isn't going to happen. Black markets fix flaws in legal markets, so I chose to face the facts and ask myself how to make it the best it can be given the reality of the situation.
@@BourbonRealTalk it's the same in the pocket knife word...drops of high demand but low production knives crash retailers websites all the time and within 45 minutes of the drop the knives are posted on eBay at 3x MSRP using pictures from the retailers website!! But the knives sell at those prices because people will pay 3x MSRP to avoid the anxiety of sitting all morning in front of their computer waiting for the drop only for the site to crash. it's gotten so bad in the knife world that some makers, seeing their knives sell at 3x MSRP an hour after the knives drop have raised their prices to capture some of the secondary market valuation. I don't blame them. It would be tough to see 300 bucks a knife go into the hands of the flippers every single time.
My MGP bourbon sold out in 3 min and 46 seconds, so a little too late. That said the entire capitalistic driven industry is working hard to make money off of the situation and it will work it self out eventually.
The black market in whiskey can easily be shut down. Just follow the money. Nearly all payments are made via PayPal or Venmo. If each states Attorney General required that money received above a certain threshold had to be reported and 1099-K forms had to be issued I predict there would be an abrupt end to BSM.
@@BourbonRealTalk pretty sure all these services fall under the control of the U.S. Dept of Treasury. So any trusted payment method would be auditable.
@@ranman1959 Still wrong. One, there is no regulatory authority that has enough resources to stop black market transactions. Two, if they did (which they won't because the cost to the American people to stop something everything thinks there should be overlooked would cause everyone in power to be removed in the next election) everyone would just pay with cash. Black markets are as inevitable as the sun coming up tomorrow.
@@BourbonRealTalk Respectfully disagree. Who’s going to play a raffle with cash, or send cash for shipped bottles? And I believe PP and VM already are going to start sending 1099-k forms for eBay sellers with more than $600 in sales. No different than the banks sending info to the IRS on interest paid above $10.
@@ranman1959 Rather than educate and then hear arguments that are theories, let me ask you a question. When in human history has government intervention been able to stop a black market when there was a giant delta between supply and demand at the MSRP? The answer is never. The answer is never because human nature drives man...not laws. As long as humans want what they can not have for money...black markets will survive.
Flippers always get lot of blame, but i feel they get arent really much of the problem. If a person is flipping, there is still lots of bottles to be had. More blame should go to people who purposely flex their wallet (we all do it at different levels).. Talking about the people who show their walls of 500+ unopened bottles , 50 bottles of the same "rare" whiskey on shelf around your room.. These people take the bottles out of circulation, making it harder to find or get for others.. This is what causes the FOMO, making people to spend more than they should have to.. I dont mind secondary market itself, because im one that falls into the "my time is valuable". Im not waiting 5hrs at crack of dawn to "maybe" get a $55 bottle. I also dont like spending $4k in a year for points to get a $85 rare bottle.. The bottle is cheaper to buy for $400 secondary and not have to have that feeling to spend entire year getting enough points.. If i want to try something rare, its cheaper to buy a Wee Glyn through you and see that huge wall of OPENED whiskeys!! At least i get to take the glass home unlike any bar... Someday soon, thanks for the content..
The people do not know, but they are actually preserving bottles for a future generation of drinker. Same as the little old ladies who bought beam decanters in the 80's that are now popping up for sale. Demand is demand. Doesn't mater if the people what the bottle because they want to look at it or drink it. When more people want the bottle than there are bottles black markets form. The problem is false demand. People who want the bottle for some other reason than the product itself. That is the demand that should be removed.
great video, but my opinion is that capitalism really does not work for the most people, just the ones at the top.. so it is a failed system. Think of it as a bus that everyone gets on, but only takes one person to his stop and tells everyone else to get out in the middle of nowhere. That's capitalism.
This video was not in support of and against capitalism. Man is born with self interest and as a result I pointed out the facts of human nature that prevent us from getting rid of BSM. On a side note you do not understand capitalism. To use your own analogy against you, you described socialism. You got on someone else's bus and expected them to take you someplace awesome. You were looking for equal outcome provided by the bus company. In your scenario you are living in a socialist society and the bus company was the government. You didn't even pick the destination. There was never enough for everyone on that bus to get what they were promised. If destination is the goal capitalism is the freedom to choose the destination...not pick one on someone else's rout. Capitalism isn't getting on someone else's bus...it is the right to build your resources until you can buy your own car and go where ever your heart desires. Capitalism is knowing that if you didn't get the car, or make the drive, it is no one's fault but your own. I have started and currently run 5 successful businesses. My father was in prison most of my life. I had no money for college. I washed paper plates and sold my plasma and lived off $30 a week. I've filed bankruptcy and been completely insolvent multiple times. Yet here I am. No one got me here...in fact a lot of people tried to stop me. Capitalism did that for me! Capitalism is equal opportunity, socialism is equal outcome, and the difference between capitalism and greed is sustainability.
Hey, watching this live and you are hitting on all the things I believe and think is fair, I will purposely buy a bottle based on what I know what my friend like to drink and have a hard time finding, I am always good with taking fair trade or heck , pay me what I paid, I am not a believer in paying secondary prices and have a 10% max up charge I will pay if I want it but also believe in drinking and sharing
I don't pay secondary market prices! A $40 bottle for $59 is kind of cheesey but not over the top! A $40 bottle for $99 or $200 is wrong on many different levels! There's great whiskey on the shelf at regular prices! Cheer's!
Ernest is right! If you are buying whiskey based on the quality of drinking experience you do not need allocated bottles to have an amazing pour.
Any of you guys ever drive down here to Kentucky and just buy it from the distillery?
For the most part, they do not have the bottles that trade on secondary for sale at the distillery. The few that do release bottles at that level do so randomly. There are locals that stand outside the gift shop every day just to see if they are releasing any rare bottles that day, only to be disappointed most days.
@@BourbonRealTalk Yeah, I live here and see the lines at Buffalo Trace. They do post what they'll have for sale that day on their website so sometimes it works out.
@@lofiwire7917 Yes, but BT doesn't sell BTAC or Van Winkle line at the distillery. You might get a Blanton's. I can find Blanton's here. I did get on the last time I was at BT!
I'm not going to tell you if I participate in secondary markets or not, buuuuut here's an educational video where I tell you all about how it works. Haha. Good video though! Thanks for the info. Quite interesting.
Also, I need to look up what is defined as "private transfer of alcohol" out of curiosity. So if my buddy comes over to my house and I toss him a can of beer is that "private transfer of alcohol"?
In Texas, where I live, it is technically illegal to gift someone a bottle of alcohol. Of course it is not enforced that way, but technically it is an unlicensed transfer of alcohol.
If you are looking to get more connected I would like to invite you to join our free community. facebook.com/groups/bourbonrealtalkcommunity
This topic has so many aspects to it ,but truth is money is what drives Bourbon from beginning to end. Starting with the distillery.
Truth!
Thank you for helping to make sense of all this.
My pleasure. Thank you for watching!
Found this video AFTER asking you about secondary on another video 😂😂😂🤦 sorry about that!
No worries!
Great video. There is so much to agree with. A lot of my interests over the years have had to deal with secondary hype increasing prices...cigars and Harley's in the 90s, ammunition prices in the 2000s and even now. I am glad I started REALLY loving bourbon 9 plus years ago when you could buy fat bottle Weller 12yr for 50 bucks and ETL for 34 bucks no problem. Thanks
I started in 2014. I remember those days.
Love your video. STOP FLIPPING BOTTLES! couldn't agree more.
Thanks!
I so wish it was just a “Bourbon Brotherhood”. If you get a double of a great bottle hook up a buddy, or trade it bottle for bottle.
Never going to judge someone for flipping, that is what a free market is all about and I don’t know their financial situation. Just wish it wasn’t the case, as it is a “black eye” for those of us that are legitimately in the hobby.
Agreed. Generosity is only possible when everyone has their base needs met. When there is such a disparity between the haves and the have nots, buddy systems break down. I do not know how many cost plus shipping groups I have seen come and go. Each group has a rule that you let bottles go at cost plus shipping. If you take a bottle you are supposed to give a bottle. Inevitably, people stop participating because they don't have a bottle they are willing to give up, and they know if they take anything they can get kicked out. The group usually starts off strong, then someone takes advantage, they get kicked out, fear grows, activity drops, and the group dies.
So true my man! Same thing goes for the Buddy you look out for 3-4 times and there is never reciprocation. I don’t “help” buddies expecting things in return, but ultimately, any relationship that isn’t reciprocal dies.
Thanks for the content you out out! I really enjoy and appreciate it! God Bless you Brother.
Yeah people I would like finally taste a bottle of stagg or weller for the 1st time.
Go to a nice whiskey bar. They will likely have both.
In my opinion, it was not the pandemic or the gamblers that caused the rise in secondary prices. It’s the government giving everyone free money… once the handouts go away, the secondary market will go back to its original state. Unfortunately, that will be quite a while as people have tied up a lot of cash into overinflated bottles….
That makes sense.
Overall decent info but a very broad overview and lacks alot of context - The secondary market did not start as a means of trading current allocated bottles but as a means of trading Bourbon produced from a bygone that will never be produced again - basically everything bottled before the mid 2000s that were barreled into casks made from old growth american oak of which there is none left - the grains on old growth oak are visibly tighter than anything harvested today - these bourbons also saw extended aging during prohibition and again when demand plummeted in the 80s to 00s and bourbon sat in cask for 15-25 years which previously never happened outside of prohibition and even then the max is around 18 years... Allocated bourbon sprung out of brands and extinct stocks being consolidated under big houses like Buffalo Trace - when you talk abut MSRP and allocated brands you have to factor in how bars/shops get these bottles from suppliers - they have to essentially buy large amounts of low end - high volume - high margin products to receive a small amount of "allocated" bourbon - so the their entire beverage program is heavily influenced / dictated by suppliers and the entry level products are thus not competing in the market on their own merit but rather coerced, this is why BT sets "MSRP" 90% below market rate - because they've already made their nut on pallets of vodka and BT base bourbon at a 300% margin and can produce endlessly and quickly - Look at Macallan, MSRP is much closer to current market value because they lack high volume low cost entry level brands to factor into equation .. In regard to supply catching up with demand there are 2 major factors not mentions - increased demand from the east which is largely null in regard to bourbon and more and more of the 3-4 billion people in the easter hemisphere are thrust into middle upper classes only a small percent need to pursue bourbon to affect demand. Then there is the cost of raw materials - remember whisky was created as a byproduct of excess grain - as the global population grown and habitat loss surges equally the cost of grain, water and wood will only increase.
Solid points. My research shows the growth of the secondary was not fueled by dusty hunters, but I have no doubt that was a contributing factor. I would also disagree with your logic on BT's MSRP. My working theory is they have models that show additional increases in prices would lower demand below what they need it to be when the 1.3 billion dollars they have invested in expansion brings more product to market. Keep in mind BT was years into excessive demand before they started a major vodka brand. All other points have been covered in other pieces.
@@BourbonRealTalk right but I was referring to the origin of the secondary market which originally started back circa 2008-2012 on ebay and only moved to FB after ebay shut down alcohol sales... The market at this time until about 2016 or so was largely driven by a small group of guys hoarding a shrinking supply of bottles that will simply never be replicated - mostly from the 2 eras of bourbon production in which barrels sat longer than normal along with market disruption (brand changing hands, distilleries shuttering etc)... in the mid/late 80s on the 2 private bottlers KBD (Willet) and Old Commonwealth (Van Winkle) began bottling in fervor a plethora of extinct stocks from closed distilleries like Stitzel Weller, Boone, Bernheim, Schenley, Old HH etc... What put Van Winkle on the map was the 20yr Julian bottled using the old Boone stocks he bought from Wild Turkey a few years prior along with other various Stitzel Weller sourced labels - when his father sold Stitzel Weller in in 1992 part of the contract was that they could still purchase barrels to be bottled at the Old Commonwealth distillery... So all in all the circumstances surrounding the bourbon industry during this time produced a multitude of stocks that we will likely never see replicated and a handful of guys bought every single bottle they found for over a decade progressively paying more to pry them form reluctant hands - and have only recently slowed down with prices on the truly rare stuff getting well into the 5 and even 6 digit range... not discounting anything in the video but simply adding context/back story as it really all began with a very small group of guys who simply loved the bourbon from the glut era of 80s-00s... These bourbons are chemically different than anything bottled today and the overwhelming consensus is the wood - barrels made from several hundred year old trees had a significantly higher concentration of oils and sugars... in regard current allocations there is no way BTAC or current VW is profitable at wholesale costs without low cost / high volume products factored into the equation - it's a common marketing practice across several industries... It's pretty evident when you compare strategies from BT vs Beam Suntory or Michters... I think long term the secondary market further splits between what you described above and the old stuff just moves more and more to auction, retail or museum type settings - to use precious stones / metals as an analogy its basically black opal or pink diamonds vs quartz...
Where would I find a glass flask or something portable to share some good stuff
www.bourbonrealtalk.com/shop/
Your show has taught me a lot
I have been tempted to buy way above retail prices. The information you have provided has taught me to be patient and enjoy the search. I do have a question are sites like Cask Cartel, Reserve Bar considered secondary market
That depends. If they bought the bottles outside of the three tier system and offer them up for sale then they are secondary. If they bought the bottles from a wholesaler and legally sell those bottles to the public then they are just an overpriced retailer. If they acquire their bottles legally, but sell them illegally (like shipping to a state that doesn't allow shipping into the state), then that would kind of be secondary. Definitely a grey area.
@@BourbonRealTalk thank you
I will not support the secretary market
I have an idea.. invest in expanding Buffalo trace to the size of Jack Daniel's. I am not in secondary but my local liquor store sells 25% or more over msrp.. they had Weller Special Reserve for $99
They started a 1.2 billion dollar expansion in 2016. Their capacity will go from 1200 barrels a day to 2400 per day in the next year...then we wait for the new whiskey to age.
Nice podcast. I’m a first time viewer and I thought you made a lot of sense. Looking forward to future podcasts. Thank you.
Awesome, thank you!
Adam Smith would have nodded his head at 12:10
At first I was like...I don't know an Adam Smith in the whiskey world 😂
@@BourbonRealTalk you described eloquently 2 concepts in wealth of nations 1) the self interest incentive and 2) division of labor
@@BourbonRealTalk and BTW, I don't get this secondary market. Today Im gonna buy OGD bonded and enjoy the hell out of it. No idea why anyone would pay $950 for a bottle but that's what another dead economist Carl Menger would describe as "subjective value theory"
@@freddybastiat8299 The manipulation of the ill informed masses in an attempt to control their vote is something that really pisses me off. There are so many young people who have a completely distorted view of human nature and capitalism because of political hacks telling them what they wish were true...instead of what they need to know...that I am scared for the future of the USA. I typically avoid politics, and when I address something political it is usually a rant about something associated with the concept of equal outcome vs equal opportunity. If people really understood capitalism and human nature they could spend their time working towards a goal that actually has a chance of success. Sorry...no more ranting today.
@@BourbonRealTalk understood, I was just talking basic economics which unfortunately turns the discussion political eventually because of the stupidity of politicians on the subject.
I'm sure that if the world had more people like you we'd have a lot better whiskey to share. Thanks for your hard work and dedication to this cause because life is so much easier when you enjoy what you're doing. Your detail on the secondary market was really educational and awarding. I hear from the other whiskey tubers "secondary this or secondary that" when I really never paid attn to what it all meant. Believe me, brother, this explained a lot for me and I now have that education from you. Just one question, why aren't you a college professor?
I am a christian and always believed my "spiritual gift" was teaching. A few years ago I realized my heart was filled by teaching about any subject. I found an outlet, but I don't think I would have made a good professor. I like to teach people who are seeking understanding about the subject I know about...not people who begrudgingly listen to me because they have to. So glad you enjoy the channel.
This was really interesting. Thanks for the education.
I thinks it’s kind of funny how every time I pick up a new hobby, I discover that there’s an entire subculture surrounding it-I’m always totally oblivious to that going into it-but then I’m pleasantly surprised to discover its cult-following. I’m seeing that it’s going to be no different with my new interest in exploring the world of brown spirits, particularly whiskey.
Cheers!
You nailed it. Cheers!
Damn, we can always count on randy for the deep dive down the rabbit hole.
As someone who has never had a Facebook account this is all very enlightening. I see people talking about this stuff all the time in the comments here on TH-cam, but I never knew how deep it actually goes.
I love whiskey and I have been drinking it a long time, but there is a world out there that I know little about.
I find a handful of liquor stores with good selections, I buy what appeals to me from the selection they have available on the shelves, and that's that. The little $50-100 a week that I spend on whiskey is never going to get me on any big spender's list, the stores are not going to call me, or put anything back for me.
And I am okay with that. There's plenty of great whiskey on the store shelves, and I have no interests in chasing some elusive magic bottle.
50-100 a week is enough to put you on their radar. They don't mind letting a valuable bottle go so a loyal customer like that. Always appreciate the support of the channel.
I am interested in purchasing the whiskey aroma kit. Could anyone tell me how long the aromas are supposed to last before they start degrading?
They are commercially produced fragrance oils, similar to essential oils, but designed to add scent to candles, perfume, lotions, etc. They are suspended in carrier oil. Neither the fragrance oil or the carrier oil is expected to degrade with time. We have had sample vials for years that have not had a change in their scent. Hope this helps.
@@BourbonRealTalk Sounds great! Thanks for the input and I will plan on picking one up soon!
I believe in everything this video says.. then someone offered me 4K for my pappy 23 and I guess I am a flipper.
😂. Totally get it. That is likely a $3,500-$3,750 profit...which is nice. I would say that the value of the experiences I can create with an open bottle like that far exceeds the cash I could make, so I open them. But I don't begrudge you your profits. Cheers!
@@BourbonRealTalk secondary price made it impossible to just open the bottle. I ended up donating the profit to the shelter I volunteer at because fuck money. My friends want to kill me though :)
Keep on making this great content!! My favorite go to!!
Thanks! Will do!
Stuff can still be super over priced and not be on the secondary market. A neighboring state has privatized sales. The county I share a border with sells "x" whiskey for 22.99, went to a store at the beach in that same state, "x" bottle was 49.99. it's not just the secondary market driving up prices. A wise man once said, " a whiskey is worth whatever your willing to pay for it"
I have covered this in other podcasts, but each store sets it's own prices (except in control states). When the store doesn't follow MSRP there is no recourse for the producer. They are not allowed to withhold product from that retailer...which is why I am against price gouging by stores.
@@BourbonRealTalk the stores being free to charge what they please isn't the problem though. The problem is all the government restrictions that violate the rights of producers, distributors, and retailers to enter (or not enter) into agreements with others. Just like you don't have to buy that bottle that's on the shelf for 10x MSRP and are free to keep your money and leave without it, producers shouldn't be forced to participate in a system that allows retailers to sell their products in ways they don't like free of consequences. Once again, the free market isn't the problem. Government interference is the problem.
@@AllPainNoGains You are 100% correct. You basically summarized this podcast.
th-cam.com/video/7cd0gbXT7VI/w-d-xo.html
This is such an awesome topic and not one that is usually talked about openly. Great info here for a lot of newbies.
Glad it was helpful! I was hesitant to cover it, but I thought about it and figured I could provide good information without crossing any lines.
Hey big Randy. Luckily found your channel months back and happily subbed. It is refreshing and inspiring to see a conservative, every man put out quality content and speak genuinely and openly without a hint of any desperate vying for subs or support. I also must add i love how you're videos are edited. Unlike too many others that quick cut every 2 seconds and that drives me nuts. Seems very unnatural, as to where you are an excellent speaker and can carry on naturally, fueled by your passion and knowledge for all things whiskey. Your authenticity shines right through the screen. Those that know, can feel it. Looking to pick up your whiskey aroma kit soon. Big thanks and power on. God bless
This means a lot to me! I don't watch a lot of other whiskey channels because I am worried about plagiarism, so I am not intentionally doing my content differently. I just produce the content I would have wanted, to teach me what I am interested in, and hope that like minded people find it. I do identify as a fiscal conservative, but I don't really fit into any title when it comes to my social politics. Honestly I don't think it matters that much. We all want the same things, just think differently about the best way to get there. Cheers!
Ive yet to have a whiskey i would pay anywhere near secondary for. Ive yet to have a whiskey id pay over 200 for, and ive bought 3 btacs.
There are plenty affordable shelf available products for sure! Cheers!
Very informative video as always thank you for all the great information cheers
Thank you for watching.
Another great and informative video 👍🏻 sending the link to my newly formed whiskey group as I speak.
Thank you! I have noticed that when I post the link in whiskey clubs the algorithm doesn't show it to many people, so if someone else posts it I feel like it gets more reach. Cheers!
Interesting video. I learned a lot, as I do from all your other videos and podcasts. Your Whiskey's buyer's guide video was also great. Nice reminder...Thanks for all the great content!
Great to hear! Cheers!
YAHOOO....and this is why I love your videos... You always tackle the tough subjects... And make people aware of what's going on...your the best out there...thank you for all your hard work..Carry on greatness my friend.... Cheers to the max...YAHOO from North Attleboro Massachusetts
Wow! I'm blushing. Seriously...thank you!
The black market is the black market is the black market. I've been calling it that for years because that is what it is. It doesn't have a bad connotation, it's just real. Plus it gives a little pizazz, and exotic flavor. It's as American as bootlegging, and everyone seems OK with that term.
Without it I do not think there would be as many people getting into whiskey as there are. FOMO is powerful!
Appreciate the detailed info & perspective Randy. Some of this I knew and pieced together on my own but there was a lot of new info. Keep doing what you're doing!
Thank you!
How about the people that work with store owners that flip bottles for the store owner on secondary and it never hits a shelf and profits are split with both parties. Happens all the time and that one really just gets me worked up.
I hear you, but if you know what the store goes through to get it they would argue they need the extra cash to cover loses on the vodka they had to buy etc. I would rather them make the extra money quietly than have them put it on the shelf at a ridiculous price and damage the credibility of the brand. This explains it a little better:
th-cam.com/video/7cd0gbXT7VI/w-d-xo.html
@@BourbonRealTalk I understand they have to purchase other items to get different bottles, but they can sell those too. They took a risk of opening a store. Then you have placed like Kroger, that the employees are selling the bottles on the side too. I don't see how it could damage the credibility of a brand, it could maybe damage the store if anything.
@@markshaw9361 The people who purchase bottles at the gouge stores are inexperienced whiskey drinkers or friends/family of one. They walk away thinking the whiskey is extremely over priced compared to flavor, and decide they don't like the brand. This is the thing the producer was trying to avoid when they decided not to raise their price to market value. They know they will be at market value at current price when new capacity comes online. Retail stores have the ability to fuck up this equation without permission from the producer without repercussion. If a store lost money trying to get the bottle, and they need to make up the lose by selling the bottle for more than MSRP I would rather than them sell it through a proxy on the secondary than them drag the brand into it by putting it on the shelf for the high price. Large retailers are immune from the wholesaler manipulation and this theory would not apply to Kroger and the like.
I refuse to buy any booze over list price... PERIOD! Private flippers or greedy small stores... sorry not paying $80 or $50 for a $25 bottle.
Plenty out there on the shelf that is just as enjoyable!
@@BourbonRealTalk amen 🙏 have tasted some real good stuff for $20 bottle
Tons of information in this video that was totally new to me. I had a vague sense of how the secondary market worked for whiskey the US but the details of things were pretty illuminating. Thanks for sharing, Randy!
Glad you enjoyed it!
It’s not just bourbon my friend, every damn thing in this world has a secondary it seems lol. Just the world we live in. Also I’m still waiting for your workout and nutrition videos ha.
I got a little wild with my diet over the summer traveling. I need to lean out a bit, but I am on my grind. Hope to do it soon.
@@BourbonRealTalk I want to be a bourbon savage like you
Dam right PS5, Shoes, Hats its even going with used cars now.
😂 what kind of dogs? we had to say goodbye to our youngest, 4 days before his 4th birthday. He was a Jack Russel/Beagle, Jackabee if you will 🐕. Always tough, I've been to funerals for family to acquaintances, have cried maybe 2x, but man I am a straight broken soul when it comes to the rainbow bridge....
Both of my dogs are Cavalier King Charles Spaniels. I had a lab that I had to put down about 8 years ago. I didn't want to go through it again, so I said no more dogs. My wife begged for a cavalier, and I am not good at telling her no...so we got too. Now I love it of course, but that breed has heart problems and one of them is starting to show symptoms. Just want to keep them around as long as I can, so I feel your pain. Cheers!
supply and demand + human nature ! the best solution, if BTC can flood the market for a couple of years! guarantee all flippers will quit! and no more 2nd market!
They have 1.2 billion in expansion money working their way toward that goal now.
There will always be flippers aslong as there are those who buy from flippers. If people would stop buying from flippers that market will instantly evaporate.
I addressed this argument in the piece. That can not happen. Human nature prevents it. If you can not get rid of the secondary then the question becomes how do you manage it.
what about the service flippers provide...there are guys who make more money with time spent working than time wasted chasing and the 3x MSRP makes sense to them
@@johnj.baranski6553 I personally think the world would be a better place if flippers pulled out of the market, but that isn't going to happen. Black markets fix flaws in legal markets, so I chose to face the facts and ask myself how to make it the best it can be given the reality of the situation.
@@BourbonRealTalk it's the same in the pocket knife word...drops of high demand but low production knives crash retailers websites all the time and within 45 minutes of the drop the knives are posted on eBay at 3x MSRP using pictures from the retailers website!! But the knives sell at those prices because people will pay 3x MSRP to avoid the anxiety of sitting all morning in front of their computer waiting for the drop only for the site to crash. it's gotten so bad in the knife world that some makers, seeing their knives sell at 3x MSRP an hour after the knives drop have raised their prices to capture some of the secondary market valuation. I don't blame them. It would be tough to see 300 bucks a knife go into the hands of the flippers every single time.
@@johnj.baranski6553 Price or supply has to change. I do a deep dive in this video:
th-cam.com/video/PBWxljSZ4IU/w-d-xo.html
Now don't just put this out there and then make your MGP Bourbon untouchable!! Lol
My MGP bourbon sold out in 3 min and 46 seconds, so a little too late. That said the entire capitalistic driven industry is working hard to make money off of the situation and it will work it self out eventually.
The black market in whiskey can easily be shut down. Just follow the money. Nearly all payments are made via PayPal or Venmo. If each states Attorney General required that money received above a certain threshold had to be reported and 1099-K forms had to be issued I predict there would be an abrupt end to BSM.
No. It would just go to some other form of payment.
@@BourbonRealTalk pretty sure all these services fall under the control of the U.S. Dept of Treasury. So any trusted payment method would be auditable.
@@ranman1959 Still wrong. One, there is no regulatory authority that has enough resources to stop black market transactions. Two, if they did (which they won't because the cost to the American people to stop something everything thinks there should be overlooked would cause everyone in power to be removed in the next election) everyone would just pay with cash. Black markets are as inevitable as the sun coming up tomorrow.
@@BourbonRealTalk Respectfully disagree. Who’s going to play a raffle with cash, or send cash for shipped bottles? And I believe PP and VM already are going to start sending 1099-k forms for eBay sellers with more than $600 in sales. No different than the banks sending info to the IRS on interest paid above $10.
@@ranman1959 Rather than educate and then hear arguments that are theories, let me ask you a question. When in human history has government intervention been able to stop a black market when there was a giant delta between supply and demand at the MSRP? The answer is never. The answer is never because human nature drives man...not laws. As long as humans want what they can not have for money...black markets will survive.
Flippers always get lot of blame, but i feel they get arent really much of the problem. If a person is flipping, there is still lots of bottles to be had. More blame should go to people who purposely flex their wallet (we all do it at different levels).. Talking about the people who show their walls of 500+ unopened bottles , 50 bottles of the same "rare" whiskey on shelf around your room.. These people take the bottles out of circulation, making it harder to find or get for others.. This is what causes the FOMO, making people to spend more than they should have to.. I dont mind secondary market itself, because im one that falls into the "my time is valuable". Im not waiting 5hrs at crack of dawn to "maybe" get a $55 bottle. I also dont like spending $4k in a year for points to get a $85 rare bottle.. The bottle is cheaper to buy for $400 secondary and not have to have that feeling to spend entire year getting enough points.. If i want to try something rare, its cheaper to buy a Wee Glyn through you and see that huge wall of OPENED whiskeys!! At least i get to take the glass home unlike any bar... Someday soon, thanks for the content..
The people do not know, but they are actually preserving bottles for a future generation of drinker. Same as the little old ladies who bought beam decanters in the 80's that are now popping up for sale. Demand is demand. Doesn't mater if the people what the bottle because they want to look at it or drink it. When more people want the bottle than there are bottles black markets form. The problem is false demand. People who want the bottle for some other reason than the product itself. That is the demand that should be removed.
great video, but my opinion is that capitalism really does not work for the most people, just the ones at the top.. so it is a failed system. Think of it as a bus that everyone gets on, but only takes one person to his stop and tells everyone else to get out in the middle of nowhere. That's capitalism.
This video was not in support of and against capitalism. Man is born with self interest and as a result I pointed out the facts of human nature that prevent us from getting rid of BSM.
On a side note you do not understand capitalism. To use your own analogy against you, you described socialism. You got on someone else's bus and expected them to take you someplace awesome. You were looking for equal outcome provided by the bus company. In your scenario you are living in a socialist society and the bus company was the government. You didn't even pick the destination. There was never enough for everyone on that bus to get what they were promised. If destination is the goal capitalism is the freedom to choose the destination...not pick one on someone else's rout. Capitalism isn't getting on someone else's bus...it is the right to build your resources until you can buy your own car and go where ever your heart desires. Capitalism is knowing that if you didn't get the car, or make the drive, it is no one's fault but your own.
I have started and currently run 5 successful businesses. My father was in prison most of my life. I had no money for college. I washed paper plates and sold my plasma and lived off $30 a week. I've filed bankruptcy and been completely insolvent multiple times. Yet here I am. No one got me here...in fact a lot of people tried to stop me. Capitalism did that for me!
Capitalism is equal opportunity, socialism is equal outcome, and the difference between capitalism and greed is sustainability.
Great episode, tough topic, folks are whiskey 🥃 crazy! Cheers!
Truth!