Whether you’re looking for a side income or a full-fledged career, becoming a coffee or tea distributor is a great way to achieve either goal. If you really study your economics, you’ll find that the greatest fortunes in history were derived from simple commercial transactions completed on a grand scale. Considering the popularity of caffeine-based beverages, it stands to reason that distributing coffee and tea can make you a mint. If that sounds like an appealing option, the following rough business blueprint should be of great assistance to you.
Selecting a Market Niche
No matter what industry you’re in, carefully picking out a wheelhouse is crucial. Choose a coffee and tea niche to specialize in such as whole beans or specialty leaves from exotic locales. At the end of the day, it doesn’t matter what you choose to specialize in as long as you do your homework. Whether you’re gunning for a retail distributorship or a wholesale distributorship, you need to know your market and potential customers. With U.S. wholesale distributor sales pegged at $3.2 trillion per year, there’s plenty of room for the 300,000 existing domestic distributors to carve out their space.
Funding Your Distributorship
Depending on your chosen niche, it could take anywhere from hundreds to millions of dollars to launch your enterprise. More often than not, distributorships are expensive to get off of the ground. If you need a financial assistance, pursue a SBA loan or go with a crowd-funding campaign. If you play your cards right, you can build up your business over time starting with an initial shoestring budget if you’re not willing to borrow.
Get the Paperwork Squared Away
No matter how you structure your business, you should form an LLC or other corporate entity to protect your interests and minimize taxes. Obtain the appropriate business licenses from local and state authorities to operate in your area. According to U.S. Customs and Border Protection, you don’t need a license to import goods like coffee and tea. However, it’s important to understand that all food items are subject to FDA regulation and approval. If you have any questions, contact your local department of commerce regarding the details related to distributorships in your state.
Sourcing Your Goods
There are literally dozens of ways that you can make money by distributing coffee or tea. For instance, you could simply contact manufacturers and sell their goods locally in unexploited markets. You could also become a franchisee for an existing business. Whenever possible, it’s best to take the direct route and go right to the source in top coffee-producing countries like Brazil, Columbia and Mexico. For tea, your best bet is India. Peruse trade publications like the Tea and Coffee Trade Journal for more ideas.
Managing the Day-to-Day
Once you’ve actually got some physical product to hawk, you’ll need to go about selling the goods. Before you get started, it’s important to set your self up for success. Get your office in order and rent some storage space if you don’t have any to spare at home. As a distributor rather than an actual producer, your profit margins will most likely be lean at the outset. Consequently, keeping a close eye on expenses and finding ways to reduce overhead is clutch. Make an effort to invest in your spreadsheet skills and learn to effectively use advanced analytics tools.
Marketing the Wares Effectively
Obviously, you’re not going to make much money if you can’t aggressively market your goods to retailers and consumers. The key is to play to your strengths and target the right buyers based on the kinds of coffee or tea that you’re promoting. For instance, free trade coffee would be easy to pitch to local mom-and-pop coffee shops and boutique roasters. While social media sites like Google+, Facebook and Twitter are always viable potential avenues for advertising, you’ll find that making a direct sales pitch to customers in person is the most effective approach.
Future-Proofing Your Business
Since the success of a distributorship business ultimately depends on consumer tastes, it’s important to keep your finger on the pulse of the latest trends. If you know your market inside and out, you can turn a profit in any economic environment. Regardless, it’s important to always be on the lookout for the “next big thing” that can make you a ton of cash. Once you’ve firmly established yourself in the coffee and tea game, branch out into other areas to make your distributorship more resistant to economic shifts.