I am about to start a coffee roasting business somewhere in the States. For now the game plan is to sell online. What are the most feasible strategies to ship small batches (14 oz)? Is that a good idea to sell online to begin with?
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1Nope. You are going have more loss than benefit. Or you can take concept of B2B, where you sell in bulk to coffeeshops!– SmitMar 6, 2017 at 10:43
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Also consider consulting [startups.se] for other topics about starting your business in general.– hoc_ageMar 7, 2017 at 13:12
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3 Answers
If you're shipping 14 oz or less, USPS First Class Mail is an option which will save you quite a bit of money over USPS Flat Rate, and will definitely be less than UPS or FedEx small packages. If you do your shipping through ShipStation or negotiate your USPS rates, you can optionally get your First Class Mail bumped up to anything under 1 lb. which could help you out further.
That being said, I would think that it'd be your goal as a business owner and roaster to ship more than 14oz at a time - i.e. get your customers to order multiple packs of 12 or 14oz. That would bump you up into the 2-3 lb range which can no longer be sent via First Class Mail, but it could go out via Priority or Priority Flat Rate. More costly, but usually 1-3 day delivery time on Priority Mail which is nice.
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But if seeking the true believers in swiftly stale coffee (I'm not a card carrying member based on what I've seen so far) the business model would be to ship freshly roasted and not much more at a time than they are going to drink before it's (believed to be) stale - thus, small packages, frequently, NOT huge bulk orders.– EcnerwalMar 6, 2017 at 19:46
As for the coffee aspect...
The market now has many options for large-scale "small-batch" roasters. From local places, to smaller distribution places (like Blue Bottle, Counter Culture, Stumptown, Verve, ...), and even bigger names like (Tom's, Peet's, Starbucks) are in the boutique game. Do you have a product that can compete with larger, established players?
Another possibility is to open a local distribution roaster and coffee shop. Around here, several have been successful. While this would require more initial capital and investment, higher margins can be earned on prepared products (e.g., $5 lattes) with lower costs by starting with green beans. Local retail and distribution can have lower overhead and better outcomes than long-distance shipping.
Logistically speaking, shipping directly after roasting could provide fresh coffee within a few days of roasting. Temperature and humidity of shipping facilities might also be an issue. I'm sure climate control is done to some extent, but is unlikely to be optimal for coffee storage.
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Unfortunately Im no where close to any of named companies. My goal was by no means to open a coffee shop. At this point I'am not even sure if the whole thing is feasible for me.– BigMMar 9, 2017 at 7:04
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1Sit down and do the math. Figure out how much your roaster expenses are (electricity or fuel included). Figure what you'll pay for green beans. Figure what you are going to charge. Figure out how long it will take you to weigh, roast, cool, pack and ship an order of coffee. Do all of that and you'll get a rough estimate of whether or not it's feasible. I did the math recently (without shipping, was going to stay local) and I think I would have been paying myself like $11/hr, which was not worth it for me. Mar 9, 2017 at 15:00
Let's hope we aren't in the same state.. because I am doing the same thing =p We officially opened about a month ago. Here's what I am finding. Plan on working with local coffee shops.
I do have an online marketplace (www.sajecreekcoffee.com) but I have found that working locally is much better. Online is flooded with potential options, and getting someone to know your brand name is difficult. I believe with time, online will be a fantastic sales channel, but it will take a lot of hard work to build the brand recognition to that point.
Lots of people like to go local now days, and a lot of people have expressed interest in carrying locally roasted products. Coffee shops, farmers markets, craft shows are where we are focusing locally to get our brand out there. We strongly believe that we have a high quality product at a fair price, so if we can simply get people to try our coffee, the coffee should do the selling for us.
Lastly, on mail, we are doing USPS priority. Shipping has been a huge pain because of costs. Unfortunately coffee is a low value per ounce product, and so shipping costs are pretty high. That being said, we can get 2 lbs of product into a padded mailer, and up to 7 lbs into a medium flat rate box. We are in the process of ordering custom boxes to reduce that price more. USPS tends to give better prices for 'heavy' items compared to UPS / FedEx. Also, my day job is writing fulfillment software for a company that operates three reasonably large online wholesale outlets, so I've had to mess with shipping a lot.
One thing to consider. As soon as you sell online, then you enter the FDA's jurisdiction since you are selling a 'food product' across state lines. This shouldn't have any major impact unless they decide to do a random inspection which I've been told happens every couple years on average.
