The Bourbon Secondary Market – The Evil Empire or Necessary Balance?

The bourbon secondary market is one of the, if not the most, polarizing topics in the bourbon community.  No other topic pulls out as vast a spectrum of emotions than this topic.  People love it, others hate it.  Some of us both love and hate it.  There are also people who simply do not care about it.  Make no mistake, there are a ton of people who publicly denounce it, only to participate in the secondary market when it fits their personal needs. 

Whatever category you fit into, we can all agree that the bourbon secondary market is the gift that keeps giving; both literally and conversationally.   The secondary market gets the lion’s share of the blame for inflated bourbon prices.  While this is partially true, there are many more factors that go into why a bottle of Blanton’s no longer sits on most liquor store shelves for under $99.99.  Allocations, whiskey awards, and social media are also factors that help drive up or down the price of our favorite bourbons.  If the secondary market disappeared tomorrow, do you think that liquor stores are simply going to reduce their prices on all bourbon back down to MSRP?  Does anyone think that prior to Fred Minnick announcing that it was the best whiskey at the San Francisco Spirits Competition, Henry McKenna ten year was on the secondary market and held for allocation behind the counter at liquor stores?

I think the secondary market is the ultimate “can’t live with it, can’t live without it” part of the bourbon world.  Does the secondary market drive crazy FOMO and pricing?  Absolutely.  Are there people stalking liquor stores daily, trying to snag an allocated bottle with their only intention is to move it on the secondary market for 3-10 times retail price?  Absolutely.   If you live in a state that gets little to no allocation of some of these bourbons, should you not partake in the secondary market as on only means to obtain your unicorn or favorite bottles?  I think you should. 

What about vintage spirits?  If you are like me, I love the history of bourbon and part of that is obtaining and enjoying vintage bottles of bourbon and whiskey; things that simply are not produced anymore; at least not by the same people, same locations, and with the same processes.  Yes, there are vintage spirits stores that you can walk into and acquire vintage whiskey.  If you have ever attempted to do so, then save yourself some time.   These vintage spirits shops have to acquire their vintage whiskey through either online auction websites or private sellers.  Do some people get lucky and still find private sellers who don’t know what they have and sell these for pennies on the dollars?  Yes, there are but not enough to warrant sustainable business.    These shops supplement their stores by obtaining vintage whiskey via the secondary market.  Given that this is the case, why would you pay the extra mark-up when you can purchase the same bottles and decanters straight from the seller?

The reality is that most people hate the secondary market because they have a belief that if the secondary market did not exist, they would be able to get their favorite and allocated bourbons at a reasonable price as the “flippers” would no longer be interested.  That thinking is simply false as bourbon has risen to such great heights of popularity that there simply will not be enough bottles available for people to walk into stores anymore and grab them off the shelf.  The flippers would go away, but the drinkers would simply purchase in larger quantities and hoard.  Some flippers may even continue to purchase in hopes of a resurrection of the secondary market for gains later.

In my opinion, there are equal parts negative and positive about the secondary market.  Although many deem it the evil empire, the people that have taken the time to understand it would agree it is less evil empire and more necessary balance.  If I have to pick my bourbon community battles, I choose the battle of the “look at me” community we have that includes “chug videos”, posed pics with bottles and drams in weird positions, and my personal favorite; “look at me, I don’t know crap about bourbon, but I post to social media frequently, stating I am bourbon famous”.  Those are topics for another day.