3-Tier FAQ's

1. What states are currently available for 3-Tier shipments? 

WineDirect has wholesaler/retailer relationships in the following state:  FL and NJ

2. Do I need shipper licenses to access 3-Tier states? 

No.  All orders are processed using the licenses of MHW, Ltd., with title transferring through the 3-Tier distribution chain:  Client > MHW > Instate Wholesaler > Instate Retailer > Consumer

3. Are 3-Tier shipments legal? 

Yes.  All laws governing traditional 3-Tier distribution are followed at each tier, including laws concerning “at rest”, franchise, primary source, brand registration, and price posting.

4. Who handles compliance reporting and taxes? 

Each license holder is responsible for their own reporting and payment of taxes.  MHW files reports to receiving states for shipments to the state; the instate wholesaler files importation reports and pays state excise taxes; the instate retailer files sale’s reports and pays sales taxes.

5. Account Set-up: 

Products are set-up, including product compliance, for each 3-Tier state designated so orders received by WineDirect’s system for that state are “channeled” as 3-Tier.  Client prefunds Vintage Funds (VF) in an amount based upon their estimated 3-Tier shipping activity over a period of time specified by them.  Client is ready to ship.

6. What is product compliance? 

If applicable, products shipped to a state must be properly registered and price posted.  Also, the client should be aware of any existing distributor relationships they have in a 3-Tier state to avoid violating franchise laws or territorial restrictions.

7. Overview of the order process:  Orders are received from your website or tasting room the same as direct orders:

  • Consumer places an order, client authorizes credit card and sends order/payment information to Oracle.
  • Oracle sends order details to the instate retailer, the Seller of Record (SOR) for the order, for acceptance.
  • Once accepted, Oracle verifies sufficient funds are available in VF and an order is created for WD to fulfill, including order documentation.
  • WD Fulfillment ships order, client settles credit card, Oracle sends carrier tracking information to client.
  • Delivery confirmation received by Oracle from carrier.
  • VF sends disbursement instructions to trust account administrator, causing funds to disburse accordingly to transaction participants.

8. What is Vintage Funds? 

To satisfy state regulators that funds management is handled at “arms length” on behalf of the license holders, VF was created as a trust account system on behalf of the SOR to facilitate funds deposits and payment disbursements to each party to the transaction including clearing fees and taxes.  VF uses a third party account administrator, Wine Funding, Inc., to receive and disburse funds per instructions received from VF.  Funds availability and account activity reports are made available to the client through the WineDirect Portal.

9. Why do I need to prefund? 

Before a sale to a consumer in a 3-Tier state can be shipped, the retailer SOR must receive payment of 100% of the funds from the sale, just as they would in a “brick & mortar” wine shop.  Prefunding ensures funds are available before the order is shipped.

10. Why is a trust account necessary? 

Only the retailer SOR is licensed to sell wine to the consumer in the receiving state.  As such, they must receive and control funds from the sale of the wine.  The trust account assures an “arms length” transaction administered by an independent third party for the benefit of all participants to the sale.

11. Do I have access to my funds in Vintage Funds? 

Yes.  Once prefunded, the funds are credited to the depositor until completion of the sale, at which time funds equal to the sale amount are disbursed to the participants to the transaction.  Client may request funds be returned at any time by contacting the VF administrator.  Please be aware however, orders received for which sufficient funds are not available in VF will NOT be shipped.

12. How can I view transactions? 

All parties: MHW, Instate Wholesaler, Instate Retailer, WineDirect and the client receive disbursements from VF.  Access to transaction details is available in the WineDirect Portal.

13. How long does it take for my wines to be delivered?

  • American Canyon FC:  Shipments to most 3-Tier states arrive in 7-10 days.  Orders for FL and NJ received before 9am (Pacific) Wednesday ship each Thursday.
  • Glenwillow FC:  Shipments to NJ arrive in 4-5 days.  Orders for NJ received before Midnight (Eastern) Thursday ship each Friday.

14. What if a customer refuses delivery or wine is returned? 

State and federal laws do not allow wine to be physically returned to the client in 3-Tier transactions.  Returns will be held at the state retailer for up to 6 weeks awaiting resolution.  Resolution options:

  • Re-ship to original consumer at the original address.
  • Re-ship to original consumer at new address in state.
  • Ship to a new consumer in state.

The retailer will notify the Account Coordinator of orders that have been returned.  The Account Coordinator will email the client return information and request resolution.  If no resolution is provided within 6 weeks, the state retailer will dispose of the product.

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