Website Closers® presents a fast-growing, highly profitable eCommerce business that stands out in the lucrative specialty coffee industry. Projected to double annual sales in 2021, this company has over 5,200 Business Clients (B2B), along with a growing Direct to Consumer (DTC) sales channel.
The business operates currently with 7,000 SKUs and has a premium Average Order Value of $830 – a great price point that makes CPA and other ad buying much easier. This enviable performance has enabled the company to generate strong revenue while continuing to market and grow sales of commercial espresso machines, coffee and espresso grinders, coffee brewers, water filtration systems, parts, and accessories. This brand is a highly respected retail leader and equipment resource throughout the high-end specialty coffee market. After six years of experience and incredible growth, this business is considered an industry expert on their many product offerings.
As coffee is the most popular and widely consumed brewed drink in the world, it is one of the most durable, ripe industries available for acquisitive entrepreneurs. The global coffee market was valued at $102.02 billion in 2020. Cafes, restaurants, hotels, resorts, theme parks, and a wide range of other businesses purchase not just coffee, but the brewing equipment to serve it to customers. The sales numbers alone demonstrate how successful this brand has been in marketing their products within the B2B space.
However, there are plenty of other reasons to be impressed by their track record. Founded in 2015, this company not only supplies coffee shop owners, managers, and baristas with commercial coffee equipment, parts, and accessories, it has also developed a nationwide network of factory-trained service technicians who seamlessly install and service the equipment. This framework could be leveraged internationally to drive even higher sales growth and is definitely a defensive moat built into the business model.
Most products sold by this firm are sourced directly from the manufacturer and their top 2 product categories are espresso machines, which make up 47% of sales, and coffee grinders, which account for 22%. While they already lead in seven separate product categories, they continually add new SKUs to each one, further expanding their lead.
From the start, the company has focused on B2B sales, and they are experiencing exciting growth in this segment, due to a continued shift to eCommerce sales, a rise in coffee consumption in the U.S., greater demand for specialty coffee, and the desire among coffee shops to purchase new equipment to better serve their customers. 86% of their sales occur in the enterprise space.
That being said, this brand has recently explored the expansive direct-to-consumer market. After opening up consumer channels, this company saw swift revenue growth of more than 14%. They now offer their products through eBay and Amazon, where they have earned an impressive Positive Seller Rating. Today, 91% of sales occur on their Shopify site, 8% on Amazon and 1% on eBay. Growth potential on all sites is enormous.
The company’s sales remain steady throughout the year and tend to peak during the holiday season. They stock approximately $326,000 worth of inventory and ship an average of 50 orders per day. As a testament to their brand loyalty, repeat customers make up 22% of total sales.
This business has been able to build a base of coffee enthusiasts through a coordinated and multifaceted approach to marketing. They have an active SEO program that includes use of keywords in product descriptions, as well as a blog that is updated regularly to demonstrate industry expertise and answer customer questions and inquiries. This content marketing strategy has proven to be very beneficial in driving organic search traffic. They now average 60,000+ monthly visits to their website.
The same is true for the company’s strategic digital, social media, and email marketing tactics. The company is active on numerous social media channels, including Facebook, Instagram, Twitter, and Pinterest. Their Instagram account has more than 4,600+ followers while their Pinterest page generates 105,900+ visits each month. They run PPC ads on Google, Facebook, and Instagram, and deploy email newsletters to their massive organic email list of 25,000+ subscribers. E-newsletters successfully introduce new product lines, offer tips and helpful information, and offer promotional deals.
The company has some terrific scale options. Additional third-party marketplace sites could be added such as Walmart and Target, as well as expanding existing listings on Amazon and eBay. The brand could increase its product offerings with new categories including coffee roasters, refrigeration, and coffee shop disposables such as to-go cups, cleaners, syrups, and more. The business could also introduce a loyalty program to increase sales and reward repeat customers. Another effective growth path is international expansion. Offering international shipping on the website or Amazon’s overseas platforms could create expansion across the globe.
Offering additional finance programs to encourage larger sales could drive increased revenue. A huge opportunity can be found in providing new add-on services for customers. The company provides installation with the purchase of most commercial espresso machines, which typically require quarterly maintenance. Building on this success, the company could launch a subscription plan for meeting ongoing maintenance needs. This could be coupled with expanding and automating technical service dispatch for all equipment.
Current ownership now spends 40 hours per week each operating the business, focusing on lead generation, sales administration, marketing, purchasing and inventory, and managing customer service. They work with one contractor as a warehouse manager and are in the process of hiring a sales and customer service administrator who will be responsible for much of the aforementioned duties.
For millions of Americans, waking up in the morning is followed by a cup of coffee to start the day. Coffee shops are thriving as more and more people arrive to get their daily coffee fix. This company has successfully identified the products that coffee shops are looking for to meet customer demand, while also targeting the rising number of individuals eager to brew coffee in their own homes. With some proven methods for scaling easily available, this company is poised to see profits skyrocket.
