Lot 18 grabbed the attention of the tech world more than the wine world at its launch two years ago because of co-founder Kevin Fortuna, a founder of some companies (Gramercy Labs) and president of others (Quigo Technologies) that frankly I've never heard of, because I'm a drinks guy, not a tech guy. The venture capital firms were also a big deal if you care about that sort of thing.*
* (I once worked for a website that raised and spent $25 million in less than 2 years. Our founders and VCs were also a big deal.)
The sheer size of the Lot 18 venture was audacious. Lot 18 was originally intended to be a luxury-wine site, showcasing small-production wines with exclusivity whenever possible. The idea was that people would buy, say, a Howell Mountain single vineyard wine from Lot 18 that couldn't be found elsewhere.
The timing for its launch wasn't great: early 2010, with the US in the throes of a recession. And Lot 18 wines aren't cheap.
Lot 18 expanded into Europe and added food and travel deals as part of its struggle to keep up with the aggressive sales growth promised to investors. The food and travel is done; I don't know what's going to happen with the Lot 18 Europe.
One of the site's biggest hurdles has been shipping costs. Lot 18 offers few true bargains because shipping costs of $10 a bottle make it nearly impossible to compete with retail stores for known brands or value wines. A wine that sells for $15 in a retail store might have a wholesale cost of $10; a wine that costs a customer $15 from Lot 18 might have a wholesale cost of $5. That's not going to be the same quality.
Many wine lovers know Lot 18 mostly by its frequent emails offering coupons and proclaiming deals that cannot be missed. It's hard to say how the volume of those will be affected; the company is still continuing and needs to make sales, but who exactly will write those emails with no editorial staff remaining is unclear.
NOTE: Please see Lot 18 layoffs: The Corrections for updated information about this post.