How Cafés Can Increase Profits by Offering Wholesale Tea Options

In the highly competitive café sector, most people focus all their efforts on in-store sales of coffee, tea and snacks. Yet one under-leveraged route to boosting revenue and profit margin is supplying wholesale tea to other local businesses.

In this guide, we’ll explore how you could add this profit-making strand to your café business and why you should consider it.

Why Wholesale Tea Makes Sense for Cafés

Most cafés already have great working relationships with tea suppliers, know how to spot quality products, and have a good deal of storage. Turning those skills to wholesale tea can provide:

• Income Beyond Counter Sales: A café could serve dozens or hundreds of cups per day, but those sales are limited by footfall and space. Wholesale lets you reach offices, restaurants, hotels, retail shops or catering companies who will buy in bulk but may not make the journey to you each day. You don’t need many wholesale customers to add a dependable monthly revenue stream.
• Improved Use of Existing Space: Wholesale orders help balance demand swings between busy and slow days, ensuring inventory moves more evenly. This reduces waste and spoilage, ultimately helping your bottom line and using your storage space efficiently.
• Higher Profit Margins: With larger orders, you can reduce unit packaging and labour costs and therefore get a better price per cup from your supplier, leading to better profits.
• Marketing: Selling your own branded tea or blends into local businesses expands your visibility. People who try your tea elsewhere might then visit your café or at least become familiar with your brand. Many tea manufacturers have private label services and will work with you to make the blend and packaging.

Steps to Launch a Wholesale Tea Offering

To succeed, cafés must treat wholesale more like a formal business line than a casual sideline. Below are actionable steps:

1. Work Out Your Target Audience: Identify local businesses that might use your tea — offices, coworking spaces, boutique shops, delis, hotels, B&Bs, independent grocers, even other cafés. Ensure you know how they want their wholesale teas too, loose leaf or tea bags.
2. Design Wholesale Product Lines and Packaging: Choose a range of teas from a quality supplier in the form that your customers have expressed a need for. Then, work carefully on the packaging — as mentioned above, it’s a marketing opportunity you can’t miss.
3. Set Pricing and Minimum Order Quantities: Wholesale pricing must factor in cost of goods, labour, delivery, overheads plus a profit margin. Set sensible minimum orders so that each customer is worthwhile. Consider offering tiered discounts for larger quantities.
4. Delivery and Logistics: Decide whether you will offer local delivery, click-and-collect or require clients to pick up. For deliveries, partner with a company or build efficient routes and schedules to reduce transportation costs. Consider collaborating with local courier services for further reach.
5. Quality Control: Wholesale clients expect reliable, consistent delivery and quality. Ensure stock is stored correctly and put strict quality checks in place. If you fail to deliver or deliver inferior tea, you risk damaging the business relationship.
6. Market Your Wholesale Line: Create a brochure or website page that outlines product lines, pricing, terms and benefits. Reach out personally to potential clients, and attend local business networking events so customers get the personal touch. Offer samples and display testimonials to attract new customers.
7. Tweak as You Go: Track key performance indicators such as order frequency, customer retention, average order size, margin per order and seasonal dips. Analyse which teas sell the best. Adjust packaging, delivery routes or pricing as you need to.

Risks to Consider and Manage

When done well, the wholesale channel can boost overall profitability of a café. However, there are risks and pitfalls:

• Late Payments: Wholesale clients may not always pay invoices on time, so you must ensure you have the cash buffer to absorb delays.
• New Skills: You introduce new tasks (order tracking, deliveries, packing), so you’ll need to ensure your staff are trained for the new venture to avoid mistakes.
• Inventory Difficulties: Overordering or stocking too many varieties can lead to waste. Use data to limit lines to your best sellers initially, then you can expand later.

Ready to Jump In?

At Teavision, we offer incredible pricing for bulk orders, and we can work with you on private label services to create your own signature blends. To get started adding wholesale to your café offerings, sign up for an account here.

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