Tea is a hydrating beverage that comes in various flavors and types. History shows that people across the globe have been drinking tea for centuries.
According to experts, tea has a lower risk of different ailments, including cognitive issues such as heart disease, stroke, diabetes, and much more. Besides, some types of tea provide better sleep quality and help people relax, which lowers the risk of depression.
If you love drinking tea, starting your tea business could be profitable. First, decide the type of tea to start producing. The niche will depend on the audience you intend to reach.
Then, it would help if you determined the business type. Options include:
- Tea farming
- Processing and packaging plant
- Tea tasting
- Distributor or wholesaler
- Tea shop
- Tea blog
Register a legal entity and complete the tax registration for your tea business. Consider applying for insurance cover before launching your tea business.
Starting a tea business requires a great deal of effort, dedication, and most importantly passion.
If you're interested in how to sell tea, or selling tea online, you can use this page as a guide for everything you'll need to know.
Want to learn more? You can check out our full guide on how to start a tea business ➜
|Min Startup Costs||Max Startup Costs|
|Office Space Expenses||$0||$7,000|
|Employee & Freelancer Expenses||$151||$252|
|Business Formation Fees||$5,600||$20,400|
|Equipment & Supply Expenses||$66||$700|
|Retail Business Expenses||$1,250||$11,650|
|Food Business Expenses||$2,125||$36,000|
|Advertising & Marketing Costs||$75||$5,286|
|Total Startup Costs||$9,852||$104,347|
|The Republic of Tea||republicoftea.com||#108,973|
|The Tea Spot||theteaspot.com||#169,337|
|Sencha Tea Bar||senchateabar.com||#175,105|
|Tea and Whisk||teaandwhisk.com||#182,782|
|Numi Organic Tea||numitea.com||#222,934|
Pros & Cons
|Flexibility||You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own.|
|Meaningful business connections||You never know who you will meet as a tea business. This could be the start of an incredible business opportunity!|
|High customer retention rates||Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer.|
|Easy to encourage "impulse buy"||In the tea business, you have a much higher chance of encouraging your customers to buy on impulse - you can easily alter the price, placement, packaging, and promotional value to influence the decision of your buyer.|
|Unlimited income potential||With starting a tea business there is no cap as to how much income you can make. The stronger your business skills and the more energy/time you put into your career, the more you'll make.|
|Amazing perks and discounts||Working in the tea business comes with its perks! As a seller for these products/services, you typically also get to enjoy industry perks and discounts.|
|Motivation of employees||If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees.|
|Longer Sales Process||A tea business can be a big time and money investment for your customer, so it's important you plan and predict a longer conversion funnel and stay in communication with potential customers.|
|Low margins||The gross margins for your tea business are typically around 60%, which can make it more challenging to incur new expenses and maintain profitability.|
|High employee turnover||In the tea business, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment.|
|Taxes||As a tea business, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.|
|High overhead expenses||With starting a tea business, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below.|
Direct sales strategy implies a direct contact between a seller and a consumer without the involvement of any third party. Direct selling is popular in sectors where sellers communicate with their clientele personally. The sales technique occurs at non-store locations which include at home, work, or online.
For direct selling to succeed, hire a few (or many) salespeople to support the sales conversion process. It's critical that you assign them specific roles and responsibilities to nurture the client and provide excellent support.
Word of mouth
Word of mouth is when a consumers reflects their interest in a company’s product or service in their daily dialogues.
Therefore, word of mouth advertising is essentially a free advertising triggered by the customers experience.
According to Nielsen, 92% of people trust recommendations from friends and family.
Therefore, in today’s hyper-connected world, a single recommendation through a word of mouth can have a huge impact to your business.
Social Media Advertising
Social media advertising is the use of social media platforms to connect with your audience with the objective to build your brand, increase sales, and drive website traffic.
According to Oberlo, approximately 48% of the global population use social media, and the number is ever-growing.
Therefore, social media allows brands access to cost-effective advertising by enabling them to interact with a large audience.
Hey! 👋 I'm Pat Walls, the founder of Starter Story.
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