Coffee E-Commerce Store and Business

Listing Details

Summary

A unique speciality coffee company that buys coffee directly from farmers, imports into US, roasts in Massachusetts and sells direct to consumers and wholesale.

Key Points

• 1-year-old profitable business with the opportunity to grow and expand into additional market channels
• 500+ customer email list, most with phone numbers
• Avg. online order value of USD$45
• In the first year, 23% net income margin and 42% adjusted net income margin
• Business-to-business relationships providing high-margin recurring corporate coffee tasting classes with huge growth potential
• Tremendous growth opportunity in retail, wholesale and DTC segments
• Customers love the illustrative packaging, excellent-tasting product and unique story
• $4,500 inventory included in the purchase price (valued at cost). Includes a green coffee inventory, 12oz bags, labels and other materials
• All intellectual property, including unique and scalable imagery and branding, included in the sale
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Operations

More than an online direct-to-consumer speciality coffee company. It is not a drop-shipping company nor a pure e-commerce company. The project is involved the entire coffee supply chain, which provides a strong advantage and tremendous growth potential compared to white-labelling coffee businesses.

We source coffee directly from farmers in Colombia, export and import the coffee into the US (with the help of an export partner) and roast the coffee in small batches in Massachusetts. In addition to receiving recurring monthly online orders from our loyal customer base, The website provides virtual coffee-tasting classes to large corporations. All of these relationships will be inherited with the purchase, and the founders will assist with the successful transition.

Revenue Streams

Online Coffee Orders: The green coffee (pre-roasted coffee) is warehoused free of charge at a third-party roaster in Massachusetts. The third-party roaster manages the orders independently through Shopify. When customers place orders, the third-party roaster will roast the green coffee and then package and fulfil the 12oz coffee bag orders directly to the customers' address with minimal intervention. This process is fully automated. 

Virtual Coffee Tasting Classes: the website partnered with a chocolate boutique to create unique and captivating coffee-tasting classes performed by large corporations. When these classes are booked, the necessary materials are shipped to the corporate participants, and the coffee and chocolate instructors hold 1-hour virtual classes via zoom.   

In-person Farmers' Markets: This product is a great fit for in-person farmers' markets across the USA. The founders had a very successful farmers' market season in Massachusetts, converting in-person customers to online customers.

Retail Sales: While this has historically not been an area of focus, the company has, from time to time, sold roasted coffee to retail locations in the Massachusetts area.

Coffee Shops: While this has historically not been an area of focus, the company has, from time to time, sold green and roasted coffee to coffee shops in the Massachusetts area.

Customers

Our direct-to-consumer customer email list of over 500 contacts has primarily originated from word-of-mouth marketing, coffee-tasting classes and farmers' markets. Our customers love the three most important aspects of a consumer business: illustrative packaging, excellent-tasting product and a unique story. Because of these three factors, customers are eager to share the brand with their friends and family and pay a premium for the product. All products have a five-star review on Shopify. 

Our business-to-business customers love coffee-tasting classes' high-quality and interactive educational components. Because of this, a recurring revenue stream has been created and is the fastest-growing segment. It is also our highest-margin segment.

Marketing and Advertising

As mentioned above, our primary marketing and advertising source come from word-of-mouth, coffee-tasting classes and farmers' markets. Although we have historically not invested in traditional digital ads (facebook, instagram, google, etc.), we hired a marketing agency in October and November 2022 to assist with digital ads. Unfortunately, the agency was not able to perform as promised, and the founders discontinued the ad spending in order to invest in proven profitable areas of the business. 

Financials

In 2022, the first full year of operation, we generated $52,000 in revenue and netted $12,000 in net income, an impressive 23% margin. Given the poorly executed marketing campaign, which did not generate a return, the adjusted net income was $22,000 and the adjusted net income margin was 42% (adding back the marketing agency fee and ad spend).

Going forward, this net income margin has great potential to increase because, during the first year, there was a significant investment into market testing to find product-market fit, as well as investment in building the brand, developing and optimizing the website and developing all associated digital assets.

Supply Chain Relationships

Throughout building the business, the founders have built an efficient and repeatable direct trade supply chain from the ground up. The founders have several strong relationships with speciality coffee farmers in Colombia and exporters to assist with the export process. Post-sale, the founders will ensure a fluid transition of all relationships.

Opportunities for Growth

1. Online Marketing: As the founders come from a finance and legal background, they were able to build a very efficient business but lacked the required background to invest in online marketing adequately and effectively. While the website has gone through several iterations, including SEO optimization, there is tremendous room for a marketing-savvy individual to improve on all key metrics of the website. Advertising in Google Ads and social media has not been taken advantage of to its fullest extent and represents an area that can be leveraged to increase web traffic.
2. Additional Online Sales Channels: Currently, Shopify is the only platform being used to sell the roasted coffee online. However, this product is perfect for other channels: Amazon, Etsy, YouTube, Walmart Marketplace, etc.
3. Addition of Products: The website sells roasted coffee directly to consumers. Many other coffee e-commerce websites include other products, such as coffee grinders, cups, kettles, etc., which can generate increased revenue streams and can be sold on a dropshipping basis. The brand can also be applied to other new coffee products that can be added to collections on the website.
4. Coffee Shops:  The founders did not have the connections to establish partnerships with cafés. The brand has the potential to provide wholesale quantities of roasted coffees to cafés in the United States, generating high volumes of sales and recurring revenue.
5. Retail: There is an important opportunity to expand the network of brick-and-mortar retailers that carry products.
6. Coffee Tasting Classes: business has recently started offering coffee classes, and they have become an overnight success. This is an indicator that there is a strong demand for this low-risk, high-margin activity and that it can be significantly expanded.

Additional Notes

We are looking for a dedicated buyer that shares a passion for speciality coffee and is looking to take to the next level. Within one year, the founders have created a desirable brand with multiple revenue streams and need a buyer to amplify the reach. The founders are willing to assist after the sale on a consulting basis to ensure a smooth and successful transition. The founders come from a finance and legal background, so all company documents and financial spreadsheets are in excellent standing. 

If the buyer wishes to move the operations outside of Massachusetts, the green coffee inventory and all materials necessary can be shipped to any state within USA.

Ideal Buyer

• Coffee lovers looking to avoid the up-front logistical headache and red tape associated with creating a coffee brand.
• Entrepreneurial buyer to expand the brand's presence in coffee shops or retail locations.
• Coffee shop owner looking for an established proprietary coffee brand or theme for a new coffee shop
• Aspiring coffee shop owner looking for a concept, a brand and a unique coffee supply chain

Existing coffee providers looking to place additional products on the website.

Motivation for Sale

The founders come from a finance and legal background, and in the future, this company needs marketing experts, coffee experts or die-hard entrepreneurs to take the brand to the next level. A strong foundation of the company has been built, iterated upon and proven. Now, the business deserves a buyer who will explode existing revenue streams and unearth new opportunities. 

How can the buyer take this project further?

Please refer to the above description that outlines how the buyer can take this further.