Lessons from Day One in Business

OMG so reception has been better than my wildest dreams. Thank you all! Not like crazy viral or anything like that, but I set my expectations low so I wouldn’t disappoint myself. Anyways, I want to share a bit of the behind-the-scenes and talk nerdy about the business. 

For context, my academic background is actually in optimization/operations-research, statistics, and economics. So this business has been SUPER interesting for me to experiment with and learn from. As such, I have written a long post of my learnings from my first day in business. 

1. Omg 25 orders on day one! THANK YOU ALL SO MUCH! I set my expectations to only sell one bag to a stranger by end of week, but I actually made 10 such orders on day one!! Seriously you all are so great. Thank you!
2. Balanced flavor is a surprise hit. It turns out, many people like a coffee that tastes like how coffee smells and is entirely inoffensive, especially when sweetened. I will look into offering more options that are like this: high cocoa, low complexity - what I like to call “round” coffee. As in it’s not sharp, bitter, bright, or offensive in any way. With sugar, it just tastes like how coffee smells.
3. While many folks desire familiarity in a “round” cup of coffee, the mystery flavor was a surprise hit. I look forward to hearing back what you all think it tastes like. I am still working on testing it. I could do a quick cupping but I really like to taste my coffee in different brewing methods with different grinds to see what I notice. But honestly, I think there may be appeal to being surprised. Maybe I’ll keep a mystery flavor on the roster as I do more runs.
4. I didn’t make enough inventory for my first production run. I produced 80 bags for this launch, thinking it would last me til my next opportunity to do a production run (July 7th). To my surprise, I’m already 2/3 through my inventory after one day.
5. I can’t do another production run until July 7th, so once I run out, we will be sold out and take preorders. Thereafter, I will be doing production weekly and this won’t be an issue. This is just a facility onboarding growth pain.
6. I want to look into subscriptions soon. I think I can offer discounts for subscribing, since this helps me plan my production runs and costs better. I want to offer a couple different styles like, “send me a round coffee weekly” vs “send me a bright fruity coffee weekly” vs “send me a surprise weekly” vs “send me all three weekly”. And I also want to offer variable time windows and quantities if you want X bags weekly, biweekly, monthly, etc.
7. Unfortunately, I was a bit reckless with my 3 free bag promotion (with the purchase of 3 bags). But I’m glad it made people happy! I didn’t take into account the larger box that 6 bags require, so the increased shipping costs on these orders (that I don’t pass to the customer) actually leads to loss. Due to this and dwindling inventory, I had to take down this promo. Sorry for anyone that I was looking forward to utilizing this, but I will certainly honor all completed orders with it.
8. Marketing to North Seattle folks and friends of friends was super impactful. I think these two groups resonated more than my other targeted audiences. I think when I do more marketing, I should focus on local folks
   
9. Given that, I need to figure out free local pickup. For now I’m gonna literally hand deliver bags to local (<3 miles from Greenwood) customers. So that will be fun! But it won’t scale and I still have to charge the shipping for my time, car, and effort. The problem is, if I do local pickup, I don’t love giving out my home address to random people consistently. It would be best if I could find a store to partner with that I could drop off orders for pickup. Let me know if you have ideas! I’m playing with the idea of local pickup out of the roastery in Georgetown, but that’s a bit of a trek for my North Seattle customers (my biggest non-friend audience so far).
10. Once I figure out local pickup, I also want to offer an environmentally-friendly option for customers to byo-container, and I will fill it for a discounted per-lb rate. I think this will appeal to North Seattle folks.
11. I underpriced shipping because I did not initially understand how Shopify handles shipping discounts. So for single bag orders, I lost most of my profit margin from eating additional shipping costs. I probably need to rethink the bag sizes I sell to make them more cost efficient to ship.
12. 8 oz bags are the least cost efficient to ship, especially with single bag orders.  As in, I can fit up to 4 bags in one flat rate package, so one bag alone has a lot of cost per bag. On one hand, I think customers like the lower sticker price than 12 oz, the ability to try more flavors, and the fact that there’s less to go stale if not being used heavily. But I’m losing so much on these. I unfortunately adjusted the price and shipping a bit to get me out of losing money ($19 out the door vs 17.40).
13. Looking at other roasters, 12 oz is the industry standard and makes a lot more economic and environmental sense to ship a single bag of. I would use less packaging per production run, be able to offer a lower per oz price to customers (aiming for $26 out the door for a single 12 oz bag vs $17.40 for a single 8 oz bag), and make literally 5x more profit per single bag order. Everyone wins, besides the lost 8 oz advantages I mentioned earlier. Maybe I can offer 8oz at markets and pop-ups in-person. Then it will make sense for everyone too

Anyways, thanks for reading this giant (should be a blog) post.

Thank you all again for your support, I am so excited to see where this goes.

I will be shipping more orders today so expect your beans soon!!!