Opening a coffee shop or starting a coffee business may seem like a dream for some. However, doing so requires capital in order to pay for the location, equipment, staff, and supplies, and to prepare for seasonality in business. Starting a wholesale distribution coffee company, such as a dropshipping coffee business, may be a safer route for a new business owner.
Owning a brick and mortar coffee shop requires you to secure a building, hire employees like bar staff and wait staff, and purchase equipment such as MRO inventory. An online coffee business where you sell coffee beans wholesale will get your foot in the door of the industry.
Selling coffee online through a wholesale marketplace or your own website eliminates the needs of brick-and-mortar restaurant operations. It also allows you to generate revenue through different avenues. These include offering coffee bean subscription options such as monthly coffee subscription boxes.
Wholesale Coffee: What Is Wholesale Coffee?
Wholesale coffee is the distribution of bulk coffee from the roaster to the retailer, which are often grocery stores and cafés. The retailers then use the best distributor marketing strategies to distribute the coffee to the consumers at a higher price than what they paid for and in smaller quantities.
By selling wholesale coffee grounds and beans, roasters come across many benefits. This is because they have the ability to sell online on their own schedule. Familiarize yourself with how to start a coffee company before diving into the wholesale food distribution business.
4 Ways to Start a Wholesale Coffee Distribution Business
Starting a coffee eCommerce business that specializes in wholesale sales is straightforward. However, there are a few key points that wholesale food distributors won’t want to overlook. This will ensure that you’re running a wholesale business successfully.
The 4 key points to consider when starting a wholesale coffee business include:
- Have a business plan
- Consider coffee cost and wholesale pricing
- Understand your ideal customers
- Keep it simple
1. Have a Business Plan
No business is complete without a business plan. Understand how to write a business plan and create one for your wholesale coffee distribution business. This is similar to an eCommerce business plan, dropshipping business plan, and restaurant business plan.
The business plan for your coffee distribution company should include various factors to ensure success. These include an executive summary, market analysis and marketing efforts, product offerings, and a financial plan. It should also cover the ideal coffee sales channel you plan to use. Look into the best SEO platform for SEO as it may help generate traffic and customers. Using a business process flow chart template may also be useful.
2. Consider Coffee Cost and Wholesale Pricing
A standard wholesale coffee menu will include pricing by the pound. Since wholesale means bulk sales, businesses will sell large quantities of coffee to each buyer. As a distributor, you will purchase the coffee and sell it in bulk quantities to retailers at a higher price. This price will earn you profit and will appeal to the retailers.
Wholesale prices are more affordable than purchasing smaller quantities at retail prices. It’s best to familiarize yourself with wholesale vs retail price.
3. Understand Your Ideal Customers
With coffee bags and labels ready, it’s time to start the coffee marketing process. This includes finding your niche market. It’s possible to reach out to these target customers digitally or in person.
It’s best to tailor your products to appeal to them. To do this, it’s best to keep up with coffee industry trends and even partner with the best coffee roasters near you. Building relationships within the wholesale industry is crucial.
When it comes to coffee, ideal relationships to keep in mind include:
- Cafés and coffee retailers
- Office buildings
- Hotels
- Restaurants
- Hospitals
- Community centers
Keep in mind that the demand for coffee in the United States is high. The average non-chain coffee shop in the US is estimated to sell and serve about 100lbs of coffee each week. This information is crucial to know for inventory management and safety stock purposes. That way you can keep up with consumer demand.
4. Keep It Simple
There are many coffee varieties out there. However, most wholesale businesses start off focusing on a couple of blends or specific origin coffees. Three common ones include an espresso blend, a decaf option, and a drip coffee profile.
Keeping things simple will help get your business off the ground. It also saves money on bags and labels. Offering a few simple options also eases the bulk shipping and shipping and handling process by streamlining the processes. Learn how to print shipping labels sooner rather than later.
It is common knowledge that too many options may confuse customers. If customers are interested in a specific coffee product or blend, it provides an opportunity to build a relationship with them. By keeping track of customer preferences and requests, you can expand your business in the future and add to your menu.
Best Wholesale Coffee Distributors
There are different types of coffee all over the world and with that are different distributors. Wholesale coffee bean distributors roast and package beans before selling them to retailers.
Some are private label coffee products which means that they’re manufactured by one company and sold under a different company’s brand name. Familiarize yourself with the private label definition if it’s your first time learning about this business model. It's also ideal to look into other brands such as Target private label brands and Walmart private labels to better understand this process.
The best wholesale coffee distributors include:
- Philz Coffee. The company was founded in 1978, and they specialize in manufacturing different wholesale coffee blends. They also offer teas such as black, green, chamomile, and yerba mate, along with spice products, mugs, and gift cards.
- Mother Parkers. Based in Fort Worth, Texas, Mother Parkers manufactures coffees and tea products. They offer ground coffee, whole bean coffee, and iced and instant hot coffee products.
- McCullagh Coffee. This company is based in Buffalo, New York, and is known for its coffee and tea products. They also offer sweeteners, creamers, and water delivery services.
Coffee Subscription Box Ideas
A common wholesale coffee business idea includes offering a monthly coffee subscription. This allows customers to agree to recurring payments for regular coffee box deliveries. These subscriptions are oftentimes customizable and allow customers to pick and choose blends, bean origins, and flavors.
The best coffee subscription boxes include:
- Peet’s Coffee. At Peet’s Coffee, they offer three curated coffee subscription options including single-origin, small-batch, and signature series. Each option is tailored to a different niche based on their preferences.
- Bottomless Coffee. Coffee that never runs out seems like a dream, and it’s what this company offers with its smart scale. Instead of subscribing to a weekly or monthly coffee delivery schedule, Bottomless Coffee sends customers a smart scale with their first order. This scale measures when customers are running low on coffee and sends them more. They also allow customers to rate the coffees as they try them, so they can tailor their preferences.
- Trade Coffee. This company matches customer preferences with their coffee offerings to provide them with what they want most. They distribute coffee from the best roasters in the country.
- Yes PLZ Coffee. Located in Los Angeles, CA, Yes PLZ Coffee provides roasted and aromatic coffee to customers’ doorsteps. Customers decide how much coffee they want and how often they want it.
Are you interested in starting a wholesale coffee subscription box? Get our Coffee Subscription Box eBook to learn all there is to know about the process!
Frequently Asked Questions About Wholesale Coffee
What Is Wholesale Coffee?
Wholesale coffee refers to large quantities of coffee that are sold to retailers who then sell to consumers in smaller quantities for profit. It’s possible to distribute and purchase roasted coffee, green coffee, or whole coffee beans. Common retailers that purchase wholesale coffee include cafés, restaurants, hotels, hospitals, and office buildings.
How Much Does Wholesale Coffee Cost?
The wholesale coffee cost may vary, but on average, it’s between 30-50% higher than the retail price for roasted and packaged coffee. The cost depends on the origin, blend, flavor, and packaging. These factors also come into play when selling the coffee at retail price. Look into the markup and margin definition to better understand this tactic.
Is a Wholesale Coffee Distribution Business Profitable?
Yes, a wholesale coffee distribution business is profitable. This is due to the low cost of stock and high-profit margins. Just like with any other business, it’s crucial to have effective management processes for costs in order to ensure the success of the business. This includes utilizing minimum order quantity or MOQ and economic order quantity or EOQ restrictions.