For the last 10 years, the need to build an on-line selling presence, if you are a roaster, seemed unavoidable. The general wisdom was that consumers were flocking to the Internet in droves and very soon, most consumer transactions would be through on-line ecommerce sales. CoffeeTalk wanted to find out how roasters did during the past decade with their on-line stores and if it lived up to expectations.
During the month of August, CoffeeTalk has been surveying coffee roasters across the country to find out about their on-line sales experiences. We sent out the survey to 2200 roasters through email from which 261 participated in the survey. This is a response rate of 11.86% and results in a ± 3% margin of error. The survey was prepared with qualifiers so that roasters not selling on line were removed from the results. Of the 261 responders, 203 have once, or are now selling coffee through an on-line store. Of these responders, 93.8% of them are still selling on-line.
The most important questions we all ask in developing an on-line store front are how were sales, was it profitable, and would you do it again.
In our survey, 8.3% said the sales were ‘worthless’ with the bulk, 40.9% (79 respondents) saying that sales were ‘so-so’. The next largest group, 23.8% (46), rated their experiences as ‘pretty good’, with ‘exceeded expectations’ (6.7%) and ‘amazing’ (2.1%) anchoring the top end. As for profitability, the majority 67.0% (126) answered ‘yep’, 31.4% (59) answered ‘nope’, and 1.6% (3) answered ‘check out my new boat’. I want to get to know these folks.
Satisfaction level from managing an on-line store was decidedly mixed. 42.5% said that their satisfaction was ‘so-so’ or ‘worthless’ but 38.9% of respondents rate their satisfaction at ‘pretty good’, ‘exceeded expectations’, or ‘amazing’. One key element of satisfaction is difficulty of customer service – the largest group (38.4%) thought the customer service requirements ‘seems okay’. 40.5% (77 respondents) thought that the customer service experience was ‘better than expected’ or ‘very light’ with an amazing 10.5% (20) responding ‘no problems, no worries’. One unfortunate soul thought that the customer service burden was the ‘deepest pit of hell’.
The question, “If you had to do it over again, would you?” is a ‘check’ question to assist in verifying results and the answers were surprising. Fully 87.0% (167) said yes. Placing this against the number of profitable experiences 67.0% indicates that as an industry we are all just crazy, or there is something else at work here. Part of the explanation may be found within the answers of those respondents who answered ‘no’ to the question about ‘now, or in the past selling on-line?’ Of those 8.8% (23) of respondents, 74.5% ‘intend to sell through an on-line storefront in the near future’ and of the group not selling on-line, 84.2% outsource all of their roasting operations. Additional insight is within the additional comments provided by 94 of the respondents.
[quote]There are other measures of success than profits. Having an online presence and marketing avenue, being able to service customers no longer living close by are just a couple of reasons for selling online. We also don’t expect tremendous sales from the site as we have not invested the necessary time and energy required to have a full, robust online marketplace.[/quote]
[quote]We opened our first online store with little knowledge of what it takes to compete in an online market and as a result, our sales have not been impressive. However, we are now putting much more effort funding into educating ourselves and into calculated marketing. We’re convinced that we can build our online presence and that it can be a profitable venture, but now realize it can’t be a passive thing.[/quote]
[quote]The reason I would do it all over again I count as getting our brand out there.[/quote]
[quote]You need the online portal to connect to current customers…. a place for education.[/quote]
[quote]Between maintaining the website and addressing customer concerns, our online shop is considerably more work per pound of coffee sold than our wholesale business. It is also more profitable. Over all, having an online storefront has worked well for us.[/quote]
[quote]I will continue because there is no alternative to getting it out to a larger audience. More marketing is needed before I decide to throw in the towel.[/quote]
It is possible to draw some sustainable conclusions from the information gathered by this survey. The most prominent is that on-line storefronts for our industry have not lived up to the super hype of the past decade. We are not all flying around in personal hovercraft and we are not buying everything on-line. An on-line presence however, is perceived as a necessary part of a roaster’s total marketing approach. Many respondents considered the profitability and sales numbers a secondary element of the need to reach out to customers with information and educational resources. Most found the on-line experience satisfying and rewarding, and for some, highly profitable; although many felt that to really ramp up their on-line success, a substantial investment in time and money was required.
There is a mixed lesson here, an on-line storefront is widely considered a necessary part of a roaster’s business model, but should not be considered a primary source of revenues, unless you are prepared to direct substantial investments in time an resources toward development and maintenance.