STiR coffee and tea magazine

54 STiR coffee and tea / Issue 4, 2021 (August / September) By Peter Keen I n 2020, at the peak Christmas selling season many tea sellers listed the single main feature of their products as "out of stock." That reflected the disruption of supply chains, escalation of shipping shortages, costs and delays, the impact of Covid on producers, drought, and export/import safety restrictions. Some of the problems will ease post-Covid – whenever that turn out to be – but many seem likely to remain and create uncertainty and risk for tea sellers. Retailers have two assets on which to build their business: their inventory of teas and reliability and responsiveness in enhancing the customer experience. Both are undermined by the current instability of the global tea industry supply chains. The inventory issue is not just a matter of having goods in stock but the right goods for the right customers at the right time at the right cost to the seller and right price to the customer. There are many market niches: organic, herbal, Japanese, single estate, etc. There are three main options for tea sellers to manage inventory: - Buy direct from individual estates and gardens, on the basis of personal relation- ships, in small volumes and ultrahigh quality and pedigree; - Buy from wholesalers, who offer a catalog of teas and multiple options in ad- ditional services, such as private label branding, packaging, label printing, and timely information on availability; or - Use dropshippers to manage all elements of shipping to customers, removing the need for any inventory purchasing and storing for the retailer. Dropshipping is generally rated as a weaker choice over relying on wholesalers and best suited to startup and very small firms. That may change in a world where the availability of the product can't be guaranteed. Sourcing Tea to Sell: Direct Buying, Wholesaling, and Dropshipping Direct buying This is the true specialty tea business and the natural customer shopping point for organic Wakoucha, single trunk oolongs, Drunken Concubine Zui Gue, yellow tea, Hei Ya black bud, Gyokuru Sasa Hime and Gyokuru Cha Meijin, Colombia An- dean Moonlight white, and many other gourmet, rare and crafted teas. Most of these sites will include a description of the farmer and stress their long relationship. Margins here are high and the small vol- umes and light weight of tea make stock- ing and order fulfilment easier to manage. However…. This all demands expert knowledge, on-the-ground contacts, and focus. It can run up against the bureau- cracy of export licenses, inspection cer- tificates, and customs clearances. And, of course, with a narrow inventory base, where some teas are grown in football field-sized gardens with quality and yield highly dependent on weather patterns, the uncertainties in matching supply to demand are challenging. This is a frame- work for building a medium-sized online business but expensive to establish and limited in scale. Many of the online direct buyers are the conscience of the industry. They build long-term commitments to farm- ers and communities, place sustainability as a core priority, and take active steps to support tea workers, including refus- ing to deal with the many growers who use child labor, and help growers both find a market and adopt bio-management practices. Rakkasan is just one example. It seeks out "hidden gems" in war-torn post-conflict regions, to help restore eco- nomic growth and community rebuilding Wholesalers Wholesalers offer a catalog of teas and multiple options in additional services, such as private label branding, packaging, label printing, and timely information on availability. They may add product de- scriptions and images that help enhance the seller's website and provide test sam- ples of new items. Contract arrangements include minimum order quantities, vol- ume discounts, etc. They may add prod- uct descriptions and images that help enhance the seller's website and provide test samples of new items. There are a wide range of wholesalers, in terms of size, geographic location suit- ed to servicing regional, or transnational

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