A Tea Addict's Journal

Small time tea stores

February 7, 2009 · 3 Comments

I’m pretty convinced, after being an observer of the industry for so many years, that if you want to start a serious tea shop in anything other than a major city in the United States, you either need very, very deep pockets, a unique town that has a critical mass of people who will buy that kind of stuff, or you need to compromise.

Compromise can come in many forms.  The most common is probably coffee, but it can also be bubble tea, or other tea “smoothie” drinks.  Other than coffee, the rest are usually sugar laden high caloric vehicles.  We’re genetically programmed to like things that are sweet and fat, whereas something bitter is usually an acquired taste.  It’s no wonder tea is less popular when drunk straight.

I recently visited a small town that had a store like that, but are now going out of business.  Even though it has a nice liberal arts college nearby and a population that’s generally considered the more tree-hugging, outdoor loving liberal type, a tea store still can’t make ends meet.  I am guessing they didn’t sell tea online, and didn’t have enough operating income from their store to keep it going.  I can see why — selling pounds of tea (if it comes to pounds at all) won’t get you all that much money.  Brewing it on the spot is probably a much higher margin business, but at the end of the day, if you don’t have enough foot traffic, you’re doomed.

It’s too bad, really, but there’s probably nothing to be done.  Even in big cities, such as Boston, tea-only stores struggle and generally don’t do much more than selling very generic teas.  It’s a tough business, and the online competition is just very stiff.  They have much lower overhead and can offer a wide variety of stuff, whereas a physical store is always going to cost more and be able to offer less.  Serious tea drinkers tend to just go online, buy a bunch of samples, and then buy the few they like in bulk.  Given population density, etc, I honestly don’t see that changing any time soon, no matter how much more tea Americans drink.

The most successful tea store I’ve seen in a smaller city in the US is one that I went to in Syracuse, NY, called Roji.  They still did bubble tea, but had just enough for the tea addict (me) to feel comfortable.  It seems like they’re still alive; I hope they will be for years to come.

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3 responses so far ↓

  • austin_tucson // February 8, 2009 at 2:27 am | Reply

    Hi Marshall, don’t give up. Our teahouse in Tucson is going to be open five years in April. Man, we are selling hot drinks in the desert,can you imagine how hard that is. We gotta be doin something right. We have some very serious teas, no bubble tea, though in the summer we make iced tea by mixing good fruit juice with some pretty good tea. We haven’t made any compromises yet, and haven’t found the need. Stop by some time and some tea with me. You choose. But you are right, it is not an easy business, you have to work for every customer in the beginning because there is very little opportunity to get the really good stuff in the US, Europe, and all of Asia, unless you really have some good connections.

    The internet commerce is not a walk in the part either, and if you really want to compete, and stay around for at least as long as us, you have to have good product, be writing some kind of content that stand up with the best that’s being written, and have a serious business plan that you can work. Google has no mercy on cheats and sluffers, and there are plenty of tea bloggers, that will ruff you up pretty good if you get a little bit flaky with an order. For people that have found a web developer and a wholesaler that is teaching how you can mark up poor tea, with a little doctoring (Or master blending if you prefer) and make unheard of margins, just working at home. Sounds like a solid business plan. May if you’ve used a clever tea pun in your URL, someone will buy it off of you in the end, which will come pretty soon.

    BUt I can tell you the trends in my business have consistently moving towards better and better tea, no chocolate rum runner peach oolong at Seven Cups. Bubble tea can come and go, but once you had your mouth and nose filled with a great tea, you will be chasing it like that lover in you dreams that seems like home but is always seems with reach, but continues to tease and elude.

    Ok, I’ve said enough as usual, I’m hoping you will not have to delete this set of comments too. I must be that I am catching a cold, so I seem to have turned a message of hope, well, a late bed time.
    Seven Cups

  • MarshalN // February 9, 2009 at 12:51 am | Reply

    Heh, I don’t delete comments until employees spam me.

    I certainly know what you mean when you say the internet is not a walk in the park. Tea bloggers definitely don’t cut you any slack, and you have to work for customers. I know I haven’t been an easy customer myself…

    Try cold brewing those iced teas. No bitterness, and no need for fruit juice either.

  • Anonymous // February 25, 2009 at 12:58 pm | Reply

    Having read the posts here and elsewhere about Teavana, I can’t help wondering how they stay afloat, particularly given their penchant for choosing high-rent locations.

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