Founder and CEO of Cavendish Wine, James Sowden, used his extensive connections within the global wine trade, along with his experience and passion in wine technology, to launch a business rooted in physical stockholding and fast, well-priced trading.
Requirements
Recognising the importance of being well-organised from the outset, and having previously been part of the Wine Owners’ team, James was clear about the advantages of business management software.
As a small start up, it had to be an affordable solution, avoiding the need to pay additional expensive fees to mould software around the idiosyncrasies of stockholding and trading fine wine.
The business management software also needed to be data-led since the operating model depended on buying well and having a finger on the pulse of market pricing and its trajectory. Data needed to reinforce correct valuations supporting effective buying decisions, helping to ensure that James didn’t make any errors and acting as a reference to ensure that his selling prices were correct.
My business is all about buying well, about building stock, it’s about creating a position of power with your stock holding so that you are buying the best wines that you can possibly buy at the best prices you possibly can and that is difficult to do if you haven’t got the right wine inventory management system.
James Sowden, Founder and CEO
Solution
Wine inventory management key to software success
Cavendish Wine were early adopters of the Wine Hub, launching the business confidently knowing the technology solution already existed to support their ambitions to build quality physical stockholding positions and respond quickly to market shifts.
Mastering the art of physical stockholding requires informed judgement, but has been possible through the collective experience of James, his team and investors, supported by the Wine Hub’s data-led sector-specific wine inventory management solution.
Cavendish holds a lot of rare stock that isn’t widely available on the market, and that presents opportunities to be a price setter. A strong cash position secures a ‘patient capital’ approach, waiting to sell until the market shows sufficient strength, whilst being able to mark their stock positions to market at any time.
Stock integration with Liv-ex is an essential workflow for Cavendish, enabling them to see market prices, best bids, best offers and last trade prices. Having these pricing insights already pre-populated for wines they are evaluating and against their stock position informs holding and trading decisions.
Cavendish’s client base splits evenly between trade buyers and private clients. Liv-ex is a useful selling channel to the trade. Offers for sale are posted into the Liv-ex market directly from stock positions that are mastered in the Hub, meaning that as soon as a wine transacts on Liv-ex that stock position is depleted and avoids the risk of overselling. Because the Hub generates all the paperwork required off the back of a Liv-ex trade, it also saves Cavendish time.
In summary, the Hub enables Cavendish to manage sales channels and pricing: to make the most of margin opportunities by pricing differentially for B2B and private client audiences.
Having a huge amount of stock meant needing a system that could enable us to manage our purchase orders, sales orders, inventory management and warehouse communication as easily as possible. I’ve been using the Hub, day-in day-out to manage all of my risks in the business, to ensure I don’t make any errors, ensure my valuations and buying decisions are correct and the prices I sell at are correct. It’s a tool I could not have done without.
James Sowden, Founder and CEO
Words on starting up
James has worked in the wine industry for many years and understands the secret to success for a start up is to maintain focus on the original objective and to not get distracted.
I would say have a very clear idea about what the business is going to achieve and by that I mean if you’re going to set up a brokerage business ensure you’ve got an infrastructure that allows you to do that. If you’re going to set up a stock-holding business, make sure that your buying decisions are as informed as they can be. If you’re going to set up a business based on information and data you’ve got to make sure you are 100% focused on what you are doing. Make sure you’re focused on your primary objective, don’t be distracted by people, just keep focused on your central line.
James Sowden, Founder and CEO