A National Trend- "Everyone on My Website" Boom or Bust? Depends

At the LVCCM we not only blog about the coffee industry but we also are shop owners. Since I'm a shop owner I too get all the same calls, frustrations with employees and vendors as any one else. That is why we can write about subject with some sense of empathy for you the coffee shop owner. This week we are going to talk about a trend more than an issue in the coffee industry but one that is potentially more disturbing because it can affect your bottom line.

As I was outlining this blog I received a call from the company that I wrote a termination letter to this morning. The representative never told me who she was. I had to figure it out during the conversation. I told her that I was going to blog about my experience. I did let her know that I would not divulge her company name but because I believe it will benefit everyone, especially in the Las Vegas area, I will tell you that they have a green sign that says on it "Bite". You can figure out the rest. This isn't even the website. These guys are just the delivery guys. They are the second level of profit skimmers.

Here's how it works.
You, the entrepreneur, sink 100k-300k into your dream business. You, spend a few years working day and night to build it up, until one day, Along comes a guy who says, "Hey, let me help you by putting you on my website, where I will throw you in with a bunch of other shops? If someone calls and orders something from your page, I'll forward the order over to you and you fill the order. Oh and by the way I have a partner who has another company that will do the delivery for us both. He and I  will each take 10-12% per transaction and we'll all become rich. Sound good? Screech.... Are you kidding me. With margins in the restaurant business as close as they are, taxes, employees, inventory, etc... and now here comes some "Tick" with a slick website. I think not.
Here's what I see wrong with these sort of operations

1. They are filled with restaurants (not just you but your competitor also)
2. They (the website) promise you the moon (you may get one call a month, while they get hundreds because they have everyone else on their site also)
3. They take a percentage of everything you already sell online (and a percentage off of everyone else on their site)
4. They partner with other companies to take yet another percentage (They probably get a percentage off of them too)
5. Their real aim is to populate a website that they can sell because of advertising on that website. (That's what I would do. Sell the whole site for millions)

In the end, the shops only benefit a percentage of 1% on these type of sites. That is their plan. It only takes a percentage from thousands of businesses to make a killing. This should be a crime but heck to tell you the truth it is a brilliant idea. Only in America can someone come up with such a brilliant and legal concept.

My suggestion to all of these businesses that have been contacted by these sort of sites, "Charge them if they want your business on their site." Charge them a licensing fee just like you would a franchisee. If they believe in your company so much then they shouldn't have a problem paying a small fee to offer your products on their website. I can bet that any large corporation that is on their sites is charging them a licensing fee already. It is the small shops that don't know any better that are populating these sites and not being compensated.

I Love Chemist's

Being in the Specialty Coffee business is truly one of the most rewarding pursuits that I've been a part of. The people are incredibly dedicated to their craft. The customers are always cool to you and to top it off, they appreciate your efforts as an artisan coffee roaster/barista.

Recently, I had a gentleman come into our shop. He was a slender-built, studious-type guy. Glasses, a pocket protector, patten-leather shoes. The only thing he was missing was the white piece of tape over the bridge of his glasses.  He wanted to buy a pound of coffee but he was there for much much more.


Turns out that this guy was a  chemical engineer. Not just any chemical engineer, he was a coffee-phile with a curiosity for our beloved bean, that needed to be satisfied. For the next 30 minutes we investigated the enzymatic mysteries of coffee. Why you should and should not freeze it. When was the optimal time to use coffee and on and on.

Our conversation was amazing.

The amazing thing about our conversation was that these types of people are never satisfied with the first answer, it (the topic) expanded to my lovely bride, who brought out things about roasting and preparation, that she obviously had been hiding from me. It was like being in a doubles tennis match. Me and my bride against Chemical Engineer.

Talking coffee isn't as exciting to most people as it is to people who really have a passion for not only drinking it but roasting and brewing it. As the probing and prodding continued I felt a sense of confidence that was curious and exciting at the same time. We were speaking with a chemical engineer with 30 years of experience who just wanted to be pointed in the right direction but the conversation was mutual beneficial. We were sharpening up our coffee skills in a way you just can't get from school books. This was real world stuff.

After the conversation was over and everyone was satisfied with the discussion, I was literally exhausted. I couldn't tell you all of what we spoke about. This I do know, It was all good. My mental powers had been drained. I was physically and mentally spent. But I would do it again...and like it.
I Love Chemist's

National Poll Says Local Shops Best

I spend a lot of time looking for articles, info and frankly anything that is out there that speaks about local coffee shops, flavors and trends in the Specialty Coffee area. There are tons of great companies out there, especially in the Las Vegas market.

Recently, there was a huge article released by Business Insider that listed the Best Coffee Shops, by State. In our beloved Nevada, out of the literally 10's of 30's of coffee shops from N,S, E, and West Grouchy John's from Las Vegas was listed as the Best Coffee Shop in Nevada. Congrats to JJ and John.
Now while we celebrate the listing of Grouchy's in the article, the more important thing was really just below the surface of this article.

In our locale, there are over 300 coffee shops. Only 20+ of which are Independently-owned shops. That means that over 80% of the shops in Las Vegas alone are either a franchise or a strip hotel shop, which is also a franchise. Nothing wrong with franchises at all. We all aspire to expand to a point where we can have a franchise, myself included. The point here is that the vast majority of shops in Las Vegas and the State of Nevada are huge national franchises.

OK that being said, the coffee shop that wins as the best shop in the state is a small mom and pop operation. Not only is the shop a small mom and pop store but you would expect, being named the best shop in the state, that the roaster for this operation would be an Illy or Pete's, or some other national roaster. Not on your life. The roaster that Grouchy's uses is a local company, as a matter of fact they are so small that they have only been in business less than a decade. In the scheme of coffee roasting that means they are barely out of the crib.

Here's where I am going with this whole thing. The vast majority of people who drink coffee, settle in at a Starbucks, Coffee Bean and Tea Leaf or some other huge chain store coffee company. And bless their hearts they are content at slugging down that stuff. But the BEST COFFEE SHOP in NEVADA isn't a Starbucks, CBTL or any other huge company, it is a little ole shop on the East side of town, who gets their beans from another little ole roaster in Boulder City.

That is huge folks.

In the final analysis, yes, there is something to be said for micro-roasters. So the next time you are thinking about getting a really good cup of coffee, don't settle for less than the best.