A TALK WITH PAUL MABRAY AND HIS COMPLIANCE SOLUTION
WSD had the opportunity to sit down and talk with the CEO of Inertia Beverage Group, Paul Mabray, earlier this week, during which he gave us deeper insight into his company’s new Rethink Compliance tool. In a nutshell, the tool will be available to everyone in the wine industry without fees or costs, and will make it easy and affordable for wineries to get compliant with states laws when shipping directly.
THE RETHINK VISION. In Paul’s opinion, the compliance tool is a way for the wine industry to continue in its tradition of sharing information – even with competitors – in order to improve the industry as a whole.
“There is an ethos in the wine industry...everyone shares information and we wanted to follow in that tradition.”
“A winery can call up one of its competitors and asked them a question like, ‘we’re having a problem with one of our wholesalers in Georgia. What do you suggest?’ and the other winery will share what they know. We wanted to keep that attitude going with our software.”
On Inertia’s website, the company says it is “following the example of the great Robert Mondavi,” by offering its tool free of charge. We asked Paul to elaborate.
“Mondavi pioneered the system of sharing information – he helped bring about that ethos.”
Paul says that while Mondavi was learning winemaking practices from all around the world, he could have kept what he had learned a secret. Instead, Mondavi chose to share his knowledge with other wineries so California as a whole could get better. In other words, he was thinking in the best interest of the industry, which is what Inertia hopes to accomplish as well.
“I’ve had the opportunity to meet Rober Mondavi several times and he’s a great man...Michael [Mondavi] is a great man as well.”
It turns out that Paul is a Napa local, born and bred, and had the opportunity to work in several local wineries as a young adult. After getting involved in the dot.com era and leaving soon after, Paul decided to take what he had learned and apply it elsewhere.
FINDING SUCCESS IN NEW YORK. As the internet became more prominent among Americans and more wineries starting using software, Paul decided it was a good time to make a move (and rightly so). About five years ago he started Inertia and began building software to help wineries sell and market direct called the Rethink Engine. An initial $1.56 million investment helped the company jet forward, along with a little court case called Granholm in 2005 that showed promise of reshaping the entire wine industry.
After Granholm passed, Paul realized it would begin a new era in the wine industry. Before then there hadn’t been much direct to trade shipping throughout the country but small and medium wineries were especially eager to get a piece of the direct shipping action after being left out by a number of wholesalers in recent years, said Paul.
“I wanted to develop something that would help wineries take advantage of this great thing [Granholm].”
Last year Inertia added Rethink Wine Trade to the Rethink Engine that would help wineries ship directly to on-and-off-premise accounts by allowing restaurants and retailers to place orders on winery’s websites. The order would then go to a prearranged wholesaler who sets aside taxes, bills the retailer, deducts its margin and pays the winery. The producer then sends the shipment directly to the buyer. New York was the first state to use the system, followed by California, Washington and the District of Colombia. This software, however, is not free like the new Rethink Compliance Tool.
After the success in New York, the venture capitalists started knocking and Inertia obtained an $8 million investment earlier this year, allowing Paul to take his company to the next stage.
DEVELOPING THE COMPLIANCE SOFTWARE. Although Granholm generally works in the wineries’ favor, there were (and still are) many problems that needed to be ironed out. When Paul decided to take Inertia a step further and introduce a free compliance tool, he went to Mike Brown, a veteran of compliance software development.
“I told our designer [Mike] everything we needed done and he was like, ‘is that it?’ which is exactly what you want to hear.”
The tool was developed over a six-month period at $500,000 and represented more than 5,000 man-hours of development. Working alongside Mike and his team of developers was a full time lawyer and compliance specialist.
The Rethink tool allows wineries to easily upload their products and individual order records, and then automatically analyzes the winery’s sales and compares them with built-in state-by-state compliance regulations. The software then creates completed reports ready to download, print and send to the various state agencies.
The tool screens and produces reports for the following compliance issues:
Total Sales Volume by state
Excise Taxes by State
Sales Taxes by State
Winery Production restrictions
Per Customer Volume Limits by period
Per State Volume Limits by period
Prohibited States
Licensing Requirements
A SOLUTION TO STATE POLICIES. Paul says that all the various laws and regulations throughout the country can be a costly, and timely, endeavor for wineries to keep up with. Often, wineries will choose not to ship direct for fear of making a mistake that could result in a fine.
“I’ll go on the record to say that a lot of the legislators don’t really understand the wine industry and how it works...although much of the Granholm legislation is passed in favor of wineries, much of it is largely protectionist.”
One “protectionist” move, says Paul, is bogging wineries down with paperwork and difficult compliance issues.
The new Rethink software will become available to everyone at the end of August, after which wineries will be able to use the system for free.
Inertia currently provides a direct sales and marketing technological platform for roughly 385 brands.
THE RETHINK VISION. In Paul’s opinion, the compliance tool is a way for the wine industry to continue in its tradition of sharing information – even with competitors – in order to improve the industry as a whole.
“There is an ethos in the wine industry...everyone shares information and we wanted to follow in that tradition.”
“A winery can call up one of its competitors and asked them a question like, ‘we’re having a problem with one of our wholesalers in Georgia. What do you suggest?’ and the other winery will share what they know. We wanted to keep that attitude going with our software.”
On Inertia’s website, the company says it is “following the example of the great Robert Mondavi,” by offering its tool free of charge. We asked Paul to elaborate.
“Mondavi pioneered the system of sharing information – he helped bring about that ethos.”
Paul says that while Mondavi was learning winemaking practices from all around the world, he could have kept what he had learned a secret. Instead, Mondavi chose to share his knowledge with other wineries so California as a whole could get better. In other words, he was thinking in the best interest of the industry, which is what Inertia hopes to accomplish as well.
“I’ve had the opportunity to meet Rober Mondavi several times and he’s a great man...Michael [Mondavi] is a great man as well.”
It turns out that Paul is a Napa local, born and bred, and had the opportunity to work in several local wineries as a young adult. After getting involved in the dot.com era and leaving soon after, Paul decided to take what he had learned and apply it elsewhere.
FINDING SUCCESS IN NEW YORK. As the internet became more prominent among Americans and more wineries starting using software, Paul decided it was a good time to make a move (and rightly so). About five years ago he started Inertia and began building software to help wineries sell and market direct called the Rethink Engine. An initial $1.56 million investment helped the company jet forward, along with a little court case called Granholm in 2005 that showed promise of reshaping the entire wine industry.
After Granholm passed, Paul realized it would begin a new era in the wine industry. Before then there hadn’t been much direct to trade shipping throughout the country but small and medium wineries were especially eager to get a piece of the direct shipping action after being left out by a number of wholesalers in recent years, said Paul.
“I wanted to develop something that would help wineries take advantage of this great thing [Granholm].”
Last year Inertia added Rethink Wine Trade to the Rethink Engine that would help wineries ship directly to on-and-off-premise accounts by allowing restaurants and retailers to place orders on winery’s websites. The order would then go to a prearranged wholesaler who sets aside taxes, bills the retailer, deducts its margin and pays the winery. The producer then sends the shipment directly to the buyer. New York was the first state to use the system, followed by California, Washington and the District of Colombia. This software, however, is not free like the new Rethink Compliance Tool.
After the success in New York, the venture capitalists started knocking and Inertia obtained an $8 million investment earlier this year, allowing Paul to take his company to the next stage.
DEVELOPING THE COMPLIANCE SOFTWARE. Although Granholm generally works in the wineries’ favor, there were (and still are) many problems that needed to be ironed out. When Paul decided to take Inertia a step further and introduce a free compliance tool, he went to Mike Brown, a veteran of compliance software development.
“I told our designer [Mike] everything we needed done and he was like, ‘is that it?’ which is exactly what you want to hear.”
The tool was developed over a six-month period at $500,000 and represented more than 5,000 man-hours of development. Working alongside Mike and his team of developers was a full time lawyer and compliance specialist.
The Rethink tool allows wineries to easily upload their products and individual order records, and then automatically analyzes the winery’s sales and compares them with built-in state-by-state compliance regulations. The software then creates completed reports ready to download, print and send to the various state agencies.
The tool screens and produces reports for the following compliance issues:
Total Sales Volume by state
Excise Taxes by State
Sales Taxes by State
Winery Production restrictions
Per Customer Volume Limits by period
Per State Volume Limits by period
Prohibited States
Licensing Requirements
A SOLUTION TO STATE POLICIES. Paul says that all the various laws and regulations throughout the country can be a costly, and timely, endeavor for wineries to keep up with. Often, wineries will choose not to ship direct for fear of making a mistake that could result in a fine.
“I’ll go on the record to say that a lot of the legislators don’t really understand the wine industry and how it works...although much of the Granholm legislation is passed in favor of wineries, much of it is largely protectionist.”
One “protectionist” move, says Paul, is bogging wineries down with paperwork and difficult compliance issues.
The new Rethink software will become available to everyone at the end of August, after which wineries will be able to use the system for free.
Inertia currently provides a direct sales and marketing technological platform for roughly 385 brands.
posted at 8:49 AM
<< Home