For so many of us, coffee is an integral part of our morning routine. So much so that when we can’t get out to our local café, we start brewing more pots at home.
Whether you’re a café-owner looking to transition to online sales or a newcomer to the coffee business, the increased demand for online coffee retailers has provided a unique opportunity.
If you’re thinking about starting your own coffee shop or roastery, you’re probably wondering what to expect.
Let’s dive in.
Is selling coffee online profitable?
Selling coffee can be very profitable with the right marketing plan and a strong brand. Coffee is a widely available product with a lot of competition, but don’t let that scare you away from the industry.
Consider the advantages of a high-commodity product like coffee:
- A high volume of customers. Coffee is one of the most widely drunk beverages in the world, meaning even with existing coffee brands, there’s an abundance of potential customers.
- Small-brand advantage. Typically customers associate larger brands with higher quality and better service, but commodity products like coffee are different. Customers are more tuned into branding cues, giving an advantage to smaller brands.
- Niching opportunities. Since coffee relies on branding cues, there’s a lot of room for creativity with regards to niching. Niching involves selling to a very small but very specific group of people.
Selling a product that’s widely available has advantages. In many ways, a widely available product is easier to sell. Your customers already want your product, you just have to make them want it from you.
Starting an online coffee business in 6 steps
If you’re a café-owner looking to move your retail business online, you’ll want to skip ahead to step six. If this is your first foray into the coffee business, your journey starts with the beans.
- Decide if you want to dropship or roast
- Find your supplier
- Find your niche
- Decide what products you’re going to sell
- Develop your brand
- Set up your online store
1. Decide if you want to dropship or roast
For café owners with established supply lines, this step is already done. If this is your first venture into the coffee business, it’s important to understand what role your business will play in the transaction.
Online coffee shops usually supply their products in one of two ways: dropshipping or home roasting. Both methods of obtaining products have their advantages and disadvantages, so your method of production depends on which works best for you.
If you’ve read our dropshipping guide, you’ll already have a good idea of what dropshipping coffee beans involves. Dropshipping is when a business outsources the shipment and storage of its products to a third-party manufacturer.
- Advantages: Low-overhead costs. More delegated work-load.
- Disadvantages: Less control over the product and availability.
- When to dropship: If you’re more interested in aspects of marketing and branding than the coffee, dropshipping your beans allows you to focus more on that part of the business.
- When not to dropship: If you’re an experienced roaster or, café-owner, or just primarily interested in more hands-on business operations.
If you’re more interested in a hands-on approach to your product, you’ll want to look into roasting coffee beans yourself and selling them directly through your own online store. The home-roasting method definitely involves more work, but it can be very rewarding.
- Advantages: More direct control over your product.
- Disadvantages: Higher workload. It can be very time-consuming.
- When to home roast: If you’re more interested in learning the craft of roasting, have more time to dedicate to learning how to roast, or have staff members to assist with roasting.
- When not to home roast: If you have less time to dedicate to your business, have limited resources, or are more interested in marketing aspects of running your business.
Whether you decide to home roast or dropship, the marketing aspects of running your coffee business will follow the same principles. Once you’ve made a decision, it’s time to move on to finding your supplier.
2. Find your supplier
While it’s easy to overlook, the source of your product is not a minor detail. To your customers, your supplier isn’t a different business but an extension of yours. If your supplier has bad beans, it means you have bad beans.
Marketing is an extremely important aspect of your coffee business, but no amount of marketing can make up for a poor-quality product.
Even if you roast your own beans, you’ll still need a supplier to provide you with raw materials, so it’s important to know what to look out for.
What to consider when choosing a supplier:
- Quality of the product. Request samples from your supplier in order to ensure that the product is up to your standards. Good, experienced roasters should be able to answer questions about what puts their product above the rest.
- Customer service.Your supplier should be able to walk you through the process of cultivating their product and provide you with any information you might have about it. A supplier with good customer service toward you means you can provide good customer service to your customers.
- Price.You obviously don’t want to work with a supplier that’s out of your price range. Keep in mind that you’ll have to sell the products at a marked-up price, so you want to think in terms of what your customers are willing to pay.
Over the longer term, you’ll grow to develop an important relationship with your supplier, with your businesses being dependent on each other.
Treat potential suppliers like job applicants; you want a supplier that’s competent, of course, but don’t overlook the importance of finding someone you can work with.
3. Find your niche
Remember that coffee is a high-commodity product, meaning consumers mostly go off branding cues when deciding whether to buy. Since your niche is crucial to developing your brand, you’ll want to start finding one.
What is a niche?
Niche markets are segments of larger markets with unique needs or preferences that commonly go unserved. Any larger market can be divided into smaller niche segments. Common ways of doing this might include selling based on price range, demographics, interests, values, hobbies, or location.
What are the benefits of a narrow niche?
Selling to a niche market gives new businesses a competitive edge in trying to establish themselves by limiting the competition.
Large markets are likely already served, and standing out against larger brands isn’t as easy. But by targeting a subset of a larger market, smaller brands can gain traction by focusing on customers that aren’t being served by larger brands.
How do you find niche markets for coffee?
Finding a niche market can be tricky, but the best way to start is by asking yourself questions about the needs of your potential customers and your already existing strengths and interests.
- Who is your ideal customer?
- What are their specific needs and pain points?
- What problems could your products solve for them?
It’s not always easy to find a niche right away, but it helps to try and narrow your audience down into segments and think about their unique needs.
Some good exercises for coming up with ideas to help get the creative juices flowing:
- Google searches and suggestions. Through trial and error, try to identify different angles, trends, and pain points in already existing competitors. Google’s suggested searches can provide clues about where to find them.
- Mind maps. Mind maps are diagrams that arrange words, ideas, and other concepts around a central idea.
- Keyword research. Sifting through keyword results can provide ideas for niches related to a specific search term and help to evaluate potential demand for those niches.
- Online communities. People tend to congregate around shared interests online, so exploring industry message boards, subreddits, and social media accounts could be a great way to find a niche.
This step is a brainstorm, so allow yourself to generate ideas—good and bad—and then fine-tune or combine them.
It’s better to generate a couple of ideas and go with the best one than to wait around for the “perfect” idea. It’s a great advantage to start with a good idea, but how you execute your idea is far more important.
How do I know if I have a good niche?
There are a couple of ways to go about validating your product ideas, but ultimately a good niche is one with an audience. Here’s how to make sure your idea has an audience:
- Build your own audience. This may take a bit of time, but one way to ensure your audience exists is to grow your social media presence yourself and bring them together.
- Test your audience with a soft launch. Start with a small campaign targeted toward a more narrow audience, collect feedback, then expand your business operations with a larger campaign.
- More keyword research. Evaluate the volume of searches for keywords related to your niche and see if there’s a high potential for sales.
4. Decide what products you’re going to sell
Once you’ve found your niche, you’ll probably start to have ideas about how to develop your brand. But don’t get too ahead of yourself—before you start to work on your branding, it’s important to establish what products you’re going to sell.
Selling roasted coffee beans is a given, but selling other branded products alongside coffee will provide your business with more long-term sustainability by diversifying your product offerings.
A couple of common products a coffee shop might choose to sell:
- Baked goods that can be shipped, like bite-sized cakes and cookies.
- Coffee-scented products, like candles or air fresheners.
- Coffee-flavored foods, like chocolate or ice cream.
- Accessories, like coffee machines, kettles, pots, and canisters.
- Teas, hot chocolates, and other warm drinks.
- Branded coffee mugs (along with other print-on-demand products—but remember to keep your branding focused. You don’t want to turn into a t-shirt store that inexplicably dropships coffee).
What you choose to sell is largely dependent on your branding. That said, if you’re a coffee brand, it’s probably best to stick to coffee-adjacent products.
Having a disparate collection of products will make your brand identity murkier and make it harder to stand-out.
5. Develop your brand
Now that you’ve got a niche and a supplier and have decided what products you’ll be selling, it’s time to start working on your brand. Having a strongly defined brand will help you stay consistent and authentic in your marketing.
It’s especially important for coffee companies to stand out, given the abundance of coffee brands. Your success will depend on how well your branding connects emotionally with your niche.
We have a more in-depth guide to building your brand, but in summary, brand development boils down to these steps:
1. Understand your target audience
Your brand’s personality is derived from the personality of an imagined version of your typical customer. Understanding your target audience, how they speak, what’s important to them, and what resonates with them will guide what decisions you make about your brand moving forward.
2. Develop a voice and personality that resonates with that audience
Once you understand your audience, you can start to develop your brand’s personality and voice. Think about words customers would associate your brand with or what makes your brand different. Start developing a value proposition as well.
3. Choose a name for your business
Your store name will be the first big commitment you need to make. Your logo, domain, marketing, and a ton of other factors will be impacted by the name you give your brand. You may want to use a business name generator or even run a focus group for feedback.
4. Pick your brands colors and fonts
Color psychology is very important in marketing. Your brand colors can have a big impact on how customers perceive your company. Even different shades of the same color can make a difference in perception. A bright, neon green might look playful while a muted, forest green could be seen as pensive.
5. Write a slogan
Come up with a catchy slogan that defines your brand for your customers. Remember to avoid common copywriting mistakes. You might consider using a slogan generator or do your own ecommerce copywriting research to spark ideas and better understand your competitors before coming up with something unique for your own business.
Your logo will appear on all your branding materials, social media profiles, packaging, storefronts, and a host of other places. That makes it a very important aspect of your branding. Branding is especially important when marketing coffee, you’ll want to put some time into coming up with a good logo.
7. Apply, extend, and evolve your branding as your business grows
Strong brands remain consistent wherever they interact with customers. Everything from the theme you choose to the way you package your products should be traced back to your brand. That’s not to say that your brand should grow and evolve, but having clear and consistent branding will go a long way in making your company memorable.
6. Set up your online store
Whether you’re looking to move your brick-and-mortar store online or start your own business from scratch, you’ll need an online store.
Once you have a strong concept for your brand—along with colors, fonts, and a logo—you’ll have the design aspects needed to get started.
1. Start a Shopify 90-day free trial
If you haven’t already, start your Shopify trial and select your store name. From there, you can begin setting up your online store.
Ready to create your first business? Start your free 90-day trial of Shopify—no credit card required.
2. Choose a theme and customize it
3. Set up essential pages
4. Add products and collections
5. Set-up shipping options
Unexpected shipping costs can add up and eat away at your returns, so you’ll want to make sure your shipping rates are set up before opening.
Start by adding your shipping zones so you can specify which locations you’re able to ship to. From there, you’ll have a couple of options for how you want to set up your shipping rates:
- Use shipping profiles for product-specific shipping rates or to ship from your closest location if you have multiple warehouses.
- Use manual shipping rates to set your own custom rates based on the weight or total cost of your customer’s order.
- Use Shopify shipping to generate automatic shipping rates from USPS, UPS, and DHL in the United States or Canada Post in Canada. Shopify shipping includes features like overnight delivery, package pickups, tracking information, international shipping, and more, depending on the carrier and mail class you choose.
- Set up local shipping for customers located close to your business and deliver products directly to them.
Check out our guide on setting up a curbside pickup option for your customers for a safe, minimal-contact delivery process.
6. Set-up payment options
7. Let customers know you’re open for business
Once you’ve got your suppliers, branding, and store set up, it’s time to let your current clientele or social media audiences know you’re open for business. Here are some ways you can announce the opening of your store and reach your customers:
- Email marketing. Send an announcement to your email list. You might even think about offering a special discount for a first-time purchase to subscribers. This is useful both in growing your email marketing list and maintaining loyal customers.
- Add signage to your storefront. If you have a storefront, a sign on your door letting shoppers know about your online store is a simple but very effective way of moving in-person customers online.
- Social media announcements. A focused social media campaign can be a great way to build buzz for the grand opening of your online store.
- Update local listings. Don’t overlook the power of Google searches. Google My Business is a free tool that allows you to update all of your business listings on Google and around the web. Customers often use Google for store hours and information, so directing these customers to your online store will be a big help in driving traffic.
Coffee Marketing 101: How to sell coffee online
Announcing that you’re open can bring some good initial traffic to your store, but if you want to sustain your sales, you’ll need to start developing an effective marketing strategy that appeals to your niche and current industry trends.
There are marketing principles that are true of any product, but coffee is unique in a few ways that make your marketing one of the most important parts of your success.
Why is marketing important in the coffee industry?
Marketing is foundational in any business, but as a product, coffee brands are especially reliant on the effectiveness of their marketing for two big reasons:
- Commodity product. Since coffee is a widely available commodity, customers tend to look for branding cues in deciding what products to buy.
- Coffee is personal. Coffee is the type of product where people are more open to buying from a smaller vendor as opposed to a well-established brand.
This combination of factors can be a huge advantage in building brand loyalty, but it also means that marketing is especially important in the coffee industry.
How to market coffee online
When it comes to coffee, niching is going to be the most important aspect of your marketing strategy. You’ll want to find a community of coffee connoisseurs and work on setting your brand apart from all the others.
Your way of branding your product is up to you, but there are some common threads that string through any community of coffee connoisseurs:
1. Your social media presence is crucial
When it comes to selling online, your social media marketing strategy is crucial, as your social media accounts will become the primary way to differentiate your brand.
A strong social media presence will help to build brand awareness, maintain your already existing fan base, and relay important information to your customers quickly and easily.
2. Compelling image and video content are important to coffee lovers
On social media, brand growth tends to largely rely on image and video marketing. Video content tends to get more engagement than other forms of content. Video has also been shown to be a more effective learning tool than text because visual imagery is more easily remembered.
If you’re looking for content marketing ideas, consider what your customers might be interested in or what they might want to learn. Videos that are more participatory for users, like follow-along recipes or instructional videos, are also very effective for branding.
You might consider showing customers what kinds of treats they can make alongside your coffee or even offer a behind-the-scenes look at the cultivation of your product.
3. Post consistently
You want to post regularly, usually at least once a day on weekdays. You don’t need to post on every social media platform out there. In fact, it’s usually best to focus on building an audience on one platform first, then transition to other platforms when you have an audience that will follow you.
Don’t underestimate the importance of consistent posting. Users that see more of your content will grow more fond of your brand due to a phenomenon called the mere-exposure effect. Customers fond of your brand will be more likely to buy from you when given the opportunity.
4. Be personable
Don’t forget the “social” part of social media. Studies and surveys consistently show that social media users highly value brand authenticity when following them on social media.
For small businesses especially, showing vulnerability and giving an inside look into the operations of the company can go a long way in building trust and brand loyalty.
It’s also very important to interact with your audience. Like and respond to comments on your posts. Keep a close ear pressed to conversations that spark up in your social circles.
Remember that coffee is an especially personal product, so building a personal relationship with your customers will go a lot further in growing your business.
Create your own online coffee store today!
Coffee is one of the world’s most beloved drinks. Whether you’re a current café owner looking to transition to online sales or entirely new to the industry—opening your own online coffee shop is an enriching experience for any coffee lover.
Creating an iconic brand is never easy, but with the right tools and a good grasp of the challenges you’ll face, you’re fully capable of building your dream coffee brand from scratch.
Ready to create your first business? Start your free 90-day trial of Shopify—no credit card required.
This article originally appeared in the Shopify blog and has been published here with permission.