Successfully marketing coffee is a major challenge from both a financial and marketing perspective. There are many points that must be considered, including, for example:
– Very high CPCs through big brands with a lot of brand awareness among customers
– Coffee tax rate in Germany 💰
In order to improve the margin, we opted for vendor central at the beginning at Blankroast AG. Here the customer sells the goods to Amazon and “saves” 15% of the sales fee. Amazon appears as a seller.
Initially, things went well until volume purchase requests with high discounts followed and wiped out the initially “good” margin. We also did not have pricing sovereignty over the products, which had a huge impact on PPC performance.
Rising inflation and faltering supply chains ultimately forced us to return to Seller-Central and define the UK prices ourselves.
We achieve profitability, as with most consumer products, through savings subscriptions. The customer is acquired once “expensively” and, in the best case, takes out a subscription. Enormously strong leverage, which can quickly assume an exponential curve 📈