Have you thought about starting your own coffee business or opening a coffee shop? This is a dream for many people, but it’s one that requires capital-especially in relation to seasonality in business. A more budget-friendly option to get into the coffee business is starting a wholesale coffee distribution business.
As a new business owner, you may consider dropshipping coffee or selling wholesale coffee to retailers. A brick and mortar location requires you to not only secure the right building but also to hire employees such as bar staff and wait staff.
Selling coffee online doesn’t require you to have the same brick and mortar restaurant operations. It’s possible to conduct such a business and generate revenue through a wholesale marketplace or digital storefront. This is done through product sales and offering a coffee bean subscription or monthly coffee subscription boxes.
Starting a Wholesale Coffee Distribution Business
When it comes to starting a coffee eCommerce business, there are a few things to keep in mind. There are four factors to consider that will ensure you’re running a wholesale business successfully.
The four factors to consider when starting a wholesale coffee distribution business include:
- Have a business plan
- Consider coffee cost and wholesale pricing
- Understand your customers
- Obtain all necessary permits and a wholesale license
- Keep it simple
1. Have a Business Plan
Knowing how to write a business plan is crucial before starting any business, especially a wholesale coffee distribution business. Your business plan should be similar to a dropshipping business plan, restaurant business plan, and eCommerce business plan.
A standard business plan for a coffee distribution company should cover a few important topics to ensure success. These include market analysis and marketing information, a financial plan, and the product offering.
2. Consider Coffee Cost and Wholesale Pricing
Selling wholesale coffee means that you’ll be selling products in bulk quantities. Most of these businesses will have menus that are priced by the pound. Distributors will purchase coffee products and sell them in bulk quantities to retailers at a higher price than what they purchased it for.
The price will be appealing to retailers, who will later sell it to customers at a higher price, and earn you profit. Learn about wholesale vs retail price, to better understand this concept.
3. Understand Your Customers
Part of successful coffee marketing includes customizing coffee bags, eCommerce packaging, and labels. First, you have to find your niche market and reach out to them in person or digitally.
Tailoring your product offerings to your niche market is essential. In order to effectively do this, you must keep up with coffee industry trends. It’s also a smart idea to work with the best coffee roasters near you.
Build relationships with your customers and local businesses that may be in need of your wholesale products. These include cafés, hotels, office buildings, restaurants, community centers, and hospitals.
4. Keep It Simple
With so many coffee varieties to choose from, the decision-making process may be tough. It’s best to keep things simple when starting off. Choose a couple of coffee blends or origin coffees. These include an espresso blend, decaf coffee, and drip coffee profile.
By simplifying your product offerings, you’ll be able to save money in different areas of your business such as the packaging and labeling. This will make the bulk shipping and shipping and handling process easier. Look into how to print shipping labels to ensure a quick and easy process while using a thermal shipping label printer.
How to Find a Wholesale Coffee Supplier
Having the right supplier is crucial when running a wholesale business successfully. The coffee beans you get from your supplier will determine the taste of your coffee.
The three factors to consider when finding a wholesale coffee supplier include:
- Great coffee quality. In order for your coffee products to sell, they must taste good. This starts off with the quality. Your ideal coffee supplier should offer products that fit your roasting and flavor specifications.
- Quick turnaround time. A way to keep up customer satisfaction is to provide quick deliveries. To do this, your supplier must offer quick turnover times, which means they have a high fill rate.
- Low MOQ. Most wholesale suppliers set minimum order quantities (MOQs) which refer to the minimum amount of products you have to order. Low MOQs will save you money, and they’re also ideal for new business owners. Learn about economic order quantity (EOQ) to minimize business costs.
Marketing Strategy for Selling Coffee Beans Wholesale
Once you determine the wholesale coffee products you plan to sell and find a supplier, it’s time to discuss your marketing strategy. Outline your marketing strategy within your business plan to minimize confusion.
Your marketing strategy should include the following three factors:
- Online marketplace and platform
- Brand image
- Creating content
1. Online Marketplace and Platform
Establish the proper online marketplace to sell your wholesale coffee bean products. This may include a B2B eCommerce platform. The ideal marketplace or platform should include a wholesale catalog with your product offerings, a shopping cart feature, and an option to pay.
It’s essential to work with payment gateway providers and payment processing companies to accept payments online. This will ensure safe payment transactions and provide peace of mind to your shoppers.
2. Brand Image
Part of starting an eCommerce business involves establishing a solid brand image. Selling products online eliminates the option for customers to try your products before they purchase them. This is why your brand image should resemble what your company believes in and what your product is about.
Articulate the company values into the brand name, logo, packaging, and throughout your website. The goal is to appeal to your customers and give them something to remember.
3. Creating Content
Online businesses benefit from eCommerce content marketing. With solid website content, you’ll motivate your customers to come back.
Include the following content on your eCommerce website:
- Written content. Blog posts and sales copy will allow you to establish your brand voice and share your company story. It also provides a chance for you to connect with customers. This will establish trust between the business and the customer and lead to more sales.
- Product descriptions. Describing your products is essential. Include details about the flavor notes of your coffee products. This will help them choose the right products based on their preferences.
- High-quality photos. Your website’s digital catalog should include high-quality images of each product, like most eCommerce marketplaces. Incorporate the right eCommerce product catalog design using a catalog creator. This will allow you to include various photos of your products and the packaging.
- Use of the best SEO practices. The proper use of search engine optimization (SEO) will get your website ranking higher on the search results pages. This may improve website traffic. The best SEO practices include using SEO keyword research, using internal linking strategies, adding quality images, and creating unique website content. Learn about, “what is eCommerce SEO?” through SEO books.
Dropshipping Coffee: 4 Steps to Dropship Coffee
The COVID-19 pandemic caused many people to start working from home. This meant fewer people went out to their favorite coffee shops to purchase a fresh cup of brew. Now, coffee is one of the best dropshipping products to sell. This means it’s one of the best dropshipping business ideas to consider.
The four steps to take to start a dropship coffee business include:
- Choose dropship coffee suppliers
- Find coffee products to sell
- Set up your online marketplace
- Launch your online business
1. Choose Dropship Coffee Suppliers
The drop shipping process includes finding a supplier for the products you want to sell. To do so, you must consider the range of coffee products that the suppliers are offering. Pay attention to order fulfillment fees, delivery times, MOQs, and EOQs. Research how to find dropshipping suppliers to ensure you cover all the bases.
2. Find Coffee Products to Sell
Being unique in your market is the key to business success. This is also similar to restaurant success. If you’re wondering how to run a wholesale distribution business successfully, the goal is to find a unique selling proposition (see some USP examples).
Your USP will allow your business to stand out, which is essential in a competitive and large industry like the coffee industry. For a dropshipping coffee business, your USP may be the name of your brand, the coffee blends you offer, roasting methods, the coffee origin, or the packaging.
Try to differentiate your business by offering complementary products. Selling an online coffee subscription box is a good starting point, and you might expand by offering milk and dairy options.
3. Set Up Your Online Marketplace
Look into the different types of marketplaces, including the best marketplace apps, to sell your coffee products on. Pay attention to the customization options that you have with each marketplace. This will allow you to incorporate your brand colors, images, and content.
4. Launch Your Online Wholesale Coffee Distribution Business
Once you secure a coffee supplier, stock up on products, and polish your branding, it’s time to get your business started. Launch your eCommerce site and begin marketing your products through eCommerce marketing.
Be sure to have an eCommerce marketing strategy as it will help you along the way. Such strategies include DTC marketing, B2B marketing, eCommerce email marketing, wholesale marketing, and eCommerce content marketing.
White Label Coffee vs Private Label Coffee
Before you start your wholesale coffee distribution business, you have to determine whether you want to sell white label or private label coffee. The choice is based on what type of coffee will lead to more customer loyalty and which product will make you stand out from the competition.
What Is White Label Coffee?
White label coffee refers to coffee products that are created by a manufacturer with the intent to have wholesalers or drop shippers resell the products. For example, a coffee roaster selling its coffee blends to different retailers. Those retailers will then rebrand the coffee blend products through custom packaging and labeling.
With white labeling, coffee roasters are able to make a consistent and reliable income and branding costs are something they don’t have to worry about. White labeling is an affordable option for retailers because manufacturers don’t have to create new processes for product development. They continue to create the same coffee blends and distribute it to the retailers.
Advantages of White Label Coffee
When starting your own coffee business, choosing white label coffee products will result in a quick and less-frustrating process. You take care of the sales process while the supplier does the rest.
Even though the supplier sells the same coffee blend to retailers, you still have access to a high-quality product. In fact, the products are pretested in the market and are proven to be successful.
It’s common for retailers to see high margins, including a high dropshipping profit margin, when they use white label coffee. Read more about the margin definition to better understand its application in your business.
Disadvantages of White Label Coffee
White label coffee is a cost-effective option, especially for new businesses; however, there are some downsides. There is little room for customization with white labeling since the same product is manufactured each time. This means you may have limitations in terms of coffee flavors, roasting methods, and coffee characteristics.
What Is Private Label Coffee?
Private label coffee refers to coffee products that are created exclusively for the use and sale of a single reseller. The private label retailers take part in the product development process.
The costs associated with private label coffee are greater; however, the product is exclusive to the brand and company. This is a significant selling point and is what motivates many business owners to take up private label commerce.
Many industries, such as clothing, food, and cosmetics, take advantage of private labeling. It’s likely that you’ve come across Target private label, Amazon private label, and Walmart private label products without even knowing it. Read about private label dropshipping and what is private label to better understand the concept.
Advantages of Private Label Coffee
Private label coffee allows you to showcase your uniqueness. Retailers have the opportunity to create custom labels and packaging. It also allows for greater inventory control on how much product is produced and how much is in safety stock.
Manufacturers make brand differentiation easy since there are no competitors with the same coffee product or label. Retailers have complete control over the pricing and marketing efforts.
Disadvantages of Private Label Coffee
Not all businesses will benefit from private label coffee products. With such products, profit margins may decrease if there are complicated packaging designs. Cost savings may not be high if the purchase volume is less than the MOQ.
A lot of product customizations may leave you with a product that is difficult to sell. They may confuse or mislead customers. Overall, private label products are risky, but for some businesses, the risk is worth it.
Wholesale Coffee vs Retail Coffee: Finding a Sales Channel
When starting a coffee distribution business, it’s likely that you’ll choose to go into either retail or wholesale sales channels. Businesses distribute products through retail sales channels and profit from products that are sold directly to consumers. Those that use wholesale sales channels make profits by selling their products in large quantities to retailers at low prices.
The right sales channel for a business will depend on the goals and sales strategies they plan to use. Ideally, the sales channel should align with the company’s business objectives.
What Is Wholesale Coffee vs Retail Coffee?
Wholesale coffee is the distribution of bulk quantities of coffee from the roaster to the retailer. Retail coffee is the distribution of coffee products directly to the consumer.
In terms of wholesale coffee, the retailers are the middlemen, and they sell coffee to consumers at higher prices than what they paid for. These retailers include cafés, bakeries, and grocery stores.
Retail coffee transactions often occur in brick and mortar locations as well as in eCommerce stores. One of the many benefits of choosing to sell through a retail sales channel is the direct interaction between the consumer and the roaster. Look into
Wholesale coffee tends to have more financial stability than retail coffee. This is primarily due to the number of items being sold. Wholesale items are sold in bulk whereas retail items aren’t.
Read about direct to consumer sales and understand the direct to consumer business model to better understand how retail sales channels work. Be sure to also look into DTC trends and popular DTC brands.