---
title: 'How He Built an $11,000/Month Side Hustle by Adding This Ingredient to His Coffee'
source: 'https://youtube.com/watch?v=oSk1xDrgqBY'
video_id: 'oSk1xDrgqBY'
date: 2026-07-23
duration_sec: 3340
channel: 'Side Hustle Nation'
---

# How He Built an $11,000/Month Side Hustle by Adding This Ingredient to His Coffee

> Source: [How He Built an $11,000/Month Side Hustle by Adding This Ingredient to His Coffee](https://youtube.com/watch?v=oSk1xDrgqBY)

## Summary

Eli shares his journey of building McCafé Coffee, a subscription-based coffee business that adds anti-inflammatory ingredients like turmeric and cacao. He discusses the challenges of finding a manufacturing partner, the importance of customer lifetime value, and the mistakes made with early advertising spend.

### Key Points

- **Realizing the Need for Subscription Model** [00:01] — The founders quickly realized that to be successful, they had to become a subscription business to ensure recurring revenue and customer retention.
- **Understanding Customer Lifetime Value** [01:47] — Subscribers stay on average 7-8 months, with some staying 18 months, while one-time buyers often don't return. This insight drove the focus on subscriptions.
- **Inspiration and Niche** [03:09] — Eli had been adding turmeric to his coffee for a decade, inspired by his family's naturopathic background. He saw a market for anti-inflammatory coffee with ingredients like cacao, cinnamon, ginger, and chaga.
- **Finding a Manufacturing Partner** [06:17] — Eli found a local coffee manufacturer with organic certification. He negotiated a net-30 payment term and a low initial equipment cost of $1,000, with the manufacturer believing in the product's potential.
- **Pricing Strategy** [08:45] — Pricing was set at $30-$33 per bag, benchmarked against competitors like Purity Coffee and Life Boost. They offered a $5 discount for subscriptions to encourage recurring orders.
- **Customer Acquisition Cost** [13:40] — Initial CAC was around $50, but dropped to $28-$30 after building social proof and influencer partnerships. Early ad spend was a mistake without a solid brand foundation.
- **Pre-Launch Strategy** [17:16] — Sent free coffee to 60 people in exchange for reviews, resulting in 28-30 verified reviews. This built social proof before launching ads.
- **Influencer Outreach** [22:23] — Reached out to influencers with under 30,000 followers, offering free coffee in exchange for posts. This was more effective than paying larger influencers, with a higher conversion rate.
- **Encouraging Subscriptions** [33:46] — Used a comparison table showing value, free shipping, and a 'less than 80 cents per day' reframe. Also offered a 'no surprises' notification before subscription renewals.
- **Future Amazon Strategy** [40:02] — Planning to launch on Amazon to capture organic search traffic, with lower CAC (estimated $8 vs $30 on Meta). Will wait to build reviews before running ads on Amazon.
- **Tech Stack** [43:34] — Uses Shopify, Klaviyo for email/SMS, Loop for subscriptions, Koala Bundles for bundling, ShipStation for shipping, and an offshore VA for social media posting.
- **Retail Distribution** [48:44] — Currently in 46 retail stores through distributors like Kowalski's and Lunds & Byerlys. Retail provides profit on every sale, though margins are lower than direct-to-consumer.

### Conclusion

Eli's journey highlights the importance of understanding customer lifetime value, building a subscription model, and leveraging influencer partnerships to reduce acquisition costs. The key takeaway is to know your numbers and choose a product with margins that allow for sustainable growth.

## Transcript

market, but a great product is only one piece of the puzzle. The challenge is >> We realized pretty quickly that in order to be successful, we had to become a subscription business. >> What do Costco, Microsoft, HelloFresh,
AG1 have in common? Well, they're all subscription businesses and they do a great job of getting customers to stick around for a long time. startup costs were somewhat low. >> Eli's Coffee Company checked a lot of
those boxes. Low startup costs, product market fit, recurring revenue potential. They're already at $11,000 a month in MRR, but getting a new product off the ground isn't a walk in the park. We made a huge mistake. Stick around to
how we found a manufacturing partner, and how we're finding traction with customers so far. I also put together a list of 50 other replenishable product Just hit the link in the description and you'll be able to download that for
free. Ready? Let's do it. >> What we didn't do, even though I have an accounting background, is really think about the long-term value of a customer. about the long-term value of a customer. Um and the cost of acquisition and the
cost of product and the cost of shipping and the cost of everything, right? >> It all starts to add up. >> We're organic certified. The organic path is great. It makes you do a lot of things, but it also costs money and
takes time. We're selling a great coffee at the end of the day, but there's so much behind it. So, every month we we were growing revenue, but we had not break-even point. Like we're just breaking even. We're barely making
money. And what we did is we took a really deep look into our numbers. know the long-term value of a customer. You have to guess. stay. When we started digging into it, what we saw
is when somebody becomes a subscriber, that means they like or love our coffee and they stay on for many, many, many months. On average, over seven or 8 months. Um many of them have stayed on for this the first sale
for 18 months. Yeah. But when you look at the one-time subscribers, a lot of But a lot of them say, "Hey, thank you for the coffee. I my other part of my right? Even if I like you, I don't remember you. Or hey, I don't want
letting me try this, but I'm going to go back to regular coffee, right?" So, when pretty quickly that in order to be successful, we had to become a subscription business more so
or we needed to get people to come back more often, right? Even if they were not looking at retail as well, because the cost of acquisition at retail is a lot lower, even if margins are lower. And then finally, we're going to be going to
have added up to us saying, "Our best business is definitely a subscriber, and the best benefits from being part of our part of our brand." >> Yeah, and I want to dive into uh all that LTV stuff and
these customers in the first place? Yeah. But coffee on the surface seems like a really competitive space. And so, you're trying to niche down and say, "Well, we're almost a subcategory within coffee." Talk to me
about kind of the competitive landscape, the inspiration to step like why did this need to exist in the world? >> It needed to exist for me and part of my fam- my family because for a decade, I had been putting turmeric in my coffee.
I come from a family of people who are, you know, naturopaths, chiropractors, um you know, in that realm. And we've always been I've always taught that food med- food is medicine. And for me, I'd been putting turmeric in my coffee all
the time. Um and I realized like this is something people might want. And then they actually don't want just turmeric in their coffee. Nobody really wants just turmeric in their coffee. So, we started working with other ingredients
that are very anti-inflammatory, um like cacao and you know, cinnamon, Ceylon cinnamon, ginger, chaga, turmeric, and all these things. And we actually had to come to a place where we're like, "Okay, is there an actual
business here, right? Like, is there a business?" Mushroom coffee had been exploding. If you know the Mud Waters of the world, exploding. toxins, those coffees are exploding. People are asking for an alternative to
regular coffee. And a healthier alternative. So, did we know right out success? Um, no, absolutely not. But we had an and our friends liked it that we were willing and able to put some time and
effort into it. Okay, so it was kind of a >> Uh, an extension of what you were already brewing or experimenting with at home. It's like, "Well, what if we could produce this on a on a bigger scale?"
That's right. And it's not like I've just a serial entrepreneur, that's the first thing I've ever done. Um, it's the first idea that I'm like, think we could help people." I still drink this coffee every day for 18
something that we knew needed to exist, but we thought we could try it. And luckily, as we started asking around town of how we can actually do this because I have a full-time job. That's what I do. I like my full-time job. You
full-time job. I needed to make it so this could be a nights and weekends >> And I needed to make sure that I had a partner that could help me do this. Yes, but I couldn't actually start making this coffee in my kitchen. It could not
faith to work with a with a manufacturing partner, and they took a that That actually took some time to negotiate and you know, get them to would willing to do this. But But we were able to do that after
town. >> Okay, so what what I'm hearing is this is kind of born from, you know, personal experience and almost family history, you know, food is medicine, anti-inflammation as a big buzzword. We
>> Yeah. Yeah. >> You know, cellular health and all of validation from um Bulletproof, from Mud Water, from >> For some of these other like niche-ier type of coffee coffee brands, like
>> Okay, there's maybe there's a maybe there's a wedge into the market here. And so, the next step becomes finding Well, I'm not going to be able to you know, do this stuff at the scale that I want to do. So, I got to find a
manufacturing partner. And this is like a local roaster or what does this even look like? >> The one that ended up being our and a half from my house. When you're in Minneapolis, the town's not so huge,
right? Luckily, I knew somebody who was an investor in that manufacturing place, And that's how we were able to find them. >> Okay, what does it cost to run an initial batch or to get this
organic certification or to do We >> We knew we could only do this if the startup costs were somewhat low, right? And we found a manufacturer, told them our idea, and got them to believe in us that we
would grow to a place that actually made sense for their business. They were a coffee manufacturer. They had an organic certification already, but they never done spices. So, I think a big lesson here is like, if at least
for our case, like we really wanted to do this, we knew we couldn't do it in the kitchen or hire our organic we have a job. We just kept saying, "Hey guys, the equipment." So, there's a thousand-dollar equipment spend to get
like a a grinder in for our stuff cuz they won't touch it with their machines And then we talked to them about, "Hey, if you guys add this, now you have more are coming in. You see the mushroom coffee exploding. Get You work with us,
we'll help you understand in as well. We'll work with you on a different part shipping coffee rather than just, you know, doing pallets of coffee. It will help you guys organize to a place. And luckily for us, the operations manager
there had already been thinking about this stuff. So it became a okay, let's figure this out together. Here are the things we need stipulation-wise. Um but to get it going is a like a thousand dollars a machine. Uh we basically told
them and they agreed that we'll be on net 30. You're going to produce us and we're going to pay for a bag of coffee. The bag of coffee is going to be soup to The coffee you roast and grind, the stuff you blend, and then you shipping
we'll know exactly what it's going to cost us when you produce a cup of of coffee, we sold that bag of coffee. And then we got invoiced a month later to do it from a cash flow way that it actually made
believe in us and And they still do believe in us. So I think that was a big big insight here. >> Okay, that's an interesting uh structural negotiation in terms of the the financing of it to say,
we're not going to buy a thousand bags up front for this huge kind of pay pay as we go almost. And hopefully we can Hopefully we can sell >> That's exactly right. They We had a minimum of like, you know, we started
every order I'm going to order like we need to do at least a whole bag of our coffee." It was like a hundred bags or something. Yeah. And so a minimal risk, they've been very straightforward that we need to continue to grow
in order for them to continue to support this at this level. So then you have promising, "Hey, we'll put advertising spend behind this." with them. >> Yeah, did they come back and be like,
"The volume isn't quite what we had hoped it would be." Or were they putting like, "Dude, we need to increase this or it's not worthwhile." >> They are a pretty local business. They work with a lot of local companies.
They're not a, you know, a million square foot facility. Our our product, my assumption is they're making the highest margin off us they work with. Because of what the [clears throat] work they do with us,
business for them. So, for us they do special, so they make a much higher margin, and they've seen growth every month, and they're still very happy with >> Yeah. I'm drawing some parallels with between
this and the old like Amazon private label strategy from 10 years ago. It's like looking at what products are already selling. Hey, >> Yeah. >> What are some of the shortcomings to
these, you know, looking at oh, I wish it was more anti-inflammatory. I wish it kind of fill in the gaps. We're listening to what the market is saying, and then adding the hey, can you do what
you're already making but with this little extra thing, you know, what's the added value, added benefit, added feature that you can put onto it and say, well, now we have a new thing. You know, it's not completely revolutionary,
but maybe it's evolutionary from what was already on the market. And finding a manufacturer already making that stuff. >> Protein coffee, creatine coffee, >> Yeah, you name it. >> And I think um, you know, the the the to
competitive, right? Coffee is competitive. Um, you know, as I think you know, some of the things we've dealt with for sure is even though our coffee is a premium product, and it is as it's expensive to the the daily user, right?
from a from a a cost, you know, it's somewhere between depending on how many bags and subscription, 22 and $30 a bag. It's definitely in the range of like those high purity coffees, Mud Waters, so we're in that range. However, when
couple things thinking about. When you're in this higher price, you have Right? At the same time, margins aren't so strong that it can support growth without having people rebuy. So, as you're thinking through an idea,
you know, margins hugely important. More important than I would ever would have you. Right? No matter what it is. And having a product that people
>> How did you arrive at this pricing? So, I'm at the website now is 30 $30.95, of course, subject to change for a bag of the whole bean and then 32.95 for the
>> So, a couple things. We found like Purity Coffee and like Life Boost. These coffees are, you know, people know about them. Found what they charge. And they charge about $30 a bag. Okay? And what we did is we said ours has other things
We should charge more. Because it cost us more. These, you are things in there that we have to think from our margins perspective. Then dollars. People are buying that. They have, you know,
I think 100,000 lots of subscribers, right? And it's we also said, "But we are trying to be coffee, too. We're not just trying to be expensive. So, we said, "Okay, well, let's people get people to subscribe and
$5 off. Get it closer." And then people start liking it. You buy two bags and you're closer to 23, 24 dollars a bag. And now it's in that coffee range of of a bag. I probably changed our pricing 30 to 40 times.
>> Yeah, yeah. >> To figure out what works, what sticks. How do you get the average cart value higher? And if people aren't paying for shipping, we're subsidizing shipping or
>> Mhm. >> And you we So, if margin-wise, I'm like, how do we stay in business? >> Yeah, the the name of in is, yeah, increasing that average card value and
the LTV especially for the one-off orders. It's like, well, it's going to cost us a a certain amount just to ship you a box. Do you want to cost us that much extra and our margins go way way up.
>> And I'm fine like I mean listen, I know there's from a cost of acquisition on meta like happy to say like we we when we first started it was in the $50 range >> Wow. >> Now we're closer to $30, 28 because
know our product more, they like us meta is pushing us but there's some coffee brands like 60 or $70 but they need people to stay for a long long long time. Right? So, you know, consumers out
expensive but at the same time, you know, if you have a product and this is know, coffee companies that are charging a lot of money. You have a high-level product that you go and you test. If you want to make it niche down and make it
really really good, make it organic, make the best ingredients and then you have the cost like is there's the prices are there for a reason and you know, it's the way you have to do business to stay in business.
>> Yeah, and the pricing is a signal too that look, this is not a commodity This is luxury, it's premium and charge you more too. Let's transition to okay, now we've got
know, I think you said it was 100 bags from the local manufacturer. what what happens to try and find your first customers? >> When I find myself procrastinating, it's almost never about the work itself. It's
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first 6 months when you go to kwo.com /sidehustle. That's kwo.com/sidehustle. we sent it out free to I think 60 people. And we
basically said, if you like our coffee, please go online and review this, right? on. And if you don't like it, we're not going to ask for a review. Just don't review it, right? We got 28 to 30
they just forget and you don't want to bug them too much, right? Um >> our Yeah, that we made them buy it verified. So they bought it through Shopify, we'd send it out. That would be
That was a really good way for us as an organization also to see how our operations flowed, right? So like, go go buy this, here's a discount code, make But at the same time now our team in the background of the manufacturing team is
they do everything correctly, right? So we started out very slow that way. Um that's before we sold our first bag. That's kind of We count that as like >> kind of planting the seed. So when you do start marketing, it doesn't look like
are buying this thing. People like it." You know, I have some positive You know, I have some positive testimonials and reviews. first 20 were definitely friends and family. Um
we made a huge mistake here next what we did. We didn't want this to be a just a you know, a mom-and-pop brand. We did want us to We want to scale this. So we we did take I think somewhere around
$10,000 of our own money. Said we are going to spend this in ads to try to move coffee and see if this works. And that's kind of like our $10,000 down the drain. We'll close up shop. It's There's no market for this.
Um and we did that and we did it too early. and we did that and we did it too early. Like ads before we had any Instagram really up, any social proof, any influencers talking about our brand,
nothing on Amazon. People would see this, they'd, you know, Google it and be >> Yeah. Okay. >> spent a lot of money up front on ads absolutely taken the time to find influencers first, you know, reach out,
whatever it was longer to get a real brand on that stream before we did it cuz we wasted we wasted a lot of money doing that. interesting to hear. I appreciate you sharing that. Where it's like you almost
you I can understand like uh we we've been, you know, months in development of product, and now we we got to move it. Let's go get Let's go find some customers. But it's like who We need We need to establish the foundation first.
foundation first. Should have done pre-launches, whatever people do to get people on there more than 20 reviews. We could have spent 2 months seeding influencers and getting videos all over the place.
>> Um and we didn't do that. And you like I said, we were in the $55 cost of acquisition. And now that we've done a lot of those things, and we now we have our our acquisition cost dropped to $29. Like that show says a lot, right, about
a brand being true. And we would have saved a lot of money and, you know, a lot of anxious nights being like, "Why is no one coming to our site?" >> Yeah, and that's where the math starts to make hopefully more sense. Okay, if
it costs us 29, 30 bucks to acquire a customer on average, um well, maybe not on average, but the best customers stick around for 7 or 8 months, and okay, our margin on each bag, your gross margin is, you know, X, then all of a sudden,
We'll go out and acquire as many customers as we can. >> But then it's like, well, what are the gross margins? And what happens to the people who cancel after 1 month? Or the Yeah, it's it's a whole becomes this
running a business is the optimization and the tweaks. And well, how do we make this work? >> Yeah, you always think like, okay, is it Are people not coming back because, you know, one of our things we have is it
brews a little bit slower. They don't want to wait so long. Or maybe they have got a little dirty on the machine because it it's brewed too slow. We have some problems that as a early business we're trying to fix, right?
>> And at the same time though, we have 94% five-star reviews. So, are people who don't love it not coming back? Right? Not saying anything. So, as a owner of a business where we think we have the best coffee out in the market,
how do we, you know, why are I I just what I believe is you have to find and you find a niche that's large enough that not everyone's going to like liking what they sell. That it can scale in a right way. When
we look at our numbers, we're still trying to figure out can we put in ads and we know our payback period will be 4 months. We can go raise money business. If all of our people were subscribers,
would be the next Grounds, right? But it's it's people who are not subscribing. So, I think for us like continues to optimize what matters to people, how to make the our value proposition more better for
people every day. >> In dropping I mean cutting that customer acquisition cost almost in half, talk to me a little bit about kind of laying that foundation whether it be the social proof, the social media accounts,
the influencer outreach. Like what what did you do to move that number in such a >> This is interesting, right? So, I think there's a couple things to be said. there's a couple things to be said. We have only paid to influencers out of
pocket ever. We have done affiliates where we're giving them a higher level of commission than we want to. Sometimes up to 60% on the first sale because you look at
your cost of ads on meta versus the cost of that first sale, that still makes Even though you're losing money on that customer for sure. You need to you know, put them in. But we did a lot of reach outs to people under 10,000 followers.
you like it, we'd love you to post something. If not, no problem. are willing to post, if they like your product to tell their audience, "Hey, this is a good product." is way higher than I expected. Way
higher. If you're a nice person, you don't ask for much, you say, "Hey, I There's nothing you need to do, but if you do like it, we obviously would appreciate this for our small business." >> Um so, you're looking for these accounts
>> Well, under 30,000. >> niche or these people like you just need >> sure. Health and wellness, we definitely you know, um
organic foods. >> Okay. >> And so, the pitch is, I'll send you a free bag. If you like it, we'd love for you to post, you know, here's the, you know, affiliate code you could use. And
on. We just said, "We'll give you a free bag of coffee. If you like it, post it." It wasn't any like, "Hey, here's what's in it for you." It was more We're trying audience will like this. If you think your audience will like this, too,
in what you're into, we'd love you to post. And you know, we probably 50, 70 people who posted because of that. right? You're sending them coffee out. You don't know who's going to hit, but
it built some great relationships. Like, you know, there's a There's some people we're sending to people maybe in 100,000, 75,000, 50,000. But, the other had a partnership, an affiliate partnership, you know, with somebody who
has 250,000. Thought it was exactly what we would like, the age, the sex, everything was perfect. And you know, over a couple weeks, I think it was a couple bags of coffee. And then we had a partnership with somebody who had 12,000
>> Mhm. >> When you're going out and reaching out to people, like numbers are important. it might not matter to their audience unless they're specific on that niche.
interesting cuz I would have thought for sure the 250,000 would sell way more. >> Yeah, you would think just on the the follower optics, but you know, it's whatever the algorithm decides to push at any one time and whatever wins in
>> Um and I imagine this is a kind of a shotgun approach. So you kind of cast a wide net and you're going to have to do, you know, outreach to 10 before you get to a three yeses and, you know, maybe half of those people end up posting and
a a big funnel to operate at the top. would be in bed at night and rather than scrolling Instagram, I was sending >> Nice. >> Yeah. Messages, messages, messages. And
I am, you know, I sell in technology, so my mantra is not just blast and pray. It'd be like looking at them, understanding them, and giving them a a >> Yeah. >> So I would do some research. And this is
ago, right? So like I would take a lot of time doing it. I think that that of time doing it. I think that that mattered, too. sorry, the influencer outreach strategy that did that did end up moving some
product and is still driving back to the Shopify store at McCafe Coffee. It's not >> That's correct. Yeah, we tried TikTok for a minute. We It's just hard to do too many things at once with the two of us. Um but the affiliate piece now, I,
to an affiliate model. We get people incoming sometimes now that ask us to be affiliate. You know, I'd say people who ask, I would say one in five actually know, want to be part of it and they might push one thing and then they're
done. Some people will get into it. Um you know, we we have found what I really enjoyed about this process is that I have found seven or eight people who are
very well known in the health and wellness space that really like our coffee that have posted organically for us. And you know, just today, won't say the name, but one of the OG Peloton fitness people reached out to me and
you." And that was really cool, right? Because somehow she had seen us in there and now I got to figure out this thing that I wish I had more advice here, but how do I partner? Is it piece of equity? Is it just dollars that we can't afford?
big for affiliate, so I'm trying to figure out this >> Right, so there's all these things to figure out now and like, you know, from do matter, right? Especially if they reach out to you and they're like into
your product already cuz they bought it on their own. Like it matters and you to, you know, people on your podcast like for advice on what the best approach is. Um, but >> Yeah, I mean, to keep it
to keep it low risk, you know, the performance-based model is kind of leaves some upside for them and minimizes risk for you. when you're small if you can't don't have the money to pay people, right?
>> Yeah. >> Um, we did pay one guy who had almost a million followers in the space. He loved our coffee. We had been talking for a while. Think we ended up paying him like I think it was almost $1,500
plus a commission and I would say we made our money back plus some, but it wasn't like a huge thing, but you know, I think taking a shot once in a while >> Yeah. >> To a point that yeah, we maybe our
there's an awareness marketing perspective that now other influence coming to us, so I do think it's worth taking a shot once in a while that makes >> Yeah, it becomes an element of social proof if you're able to, you know, embed
that video into your own marketing material or use it for ads. Yeah, there's a whole ecosystem to be built around that for that one one-time cost. >> Yeah, but you know, going back to your
growth happened. There it's all these things, right? Like it is all these things that matter. At the end of the day, Facebook by far has been our best acquisition. Um but it's also by far the most expensive,
right? So we're trying to determine kind of what that mix should look like. We now that I would say Google Ads early on cuz nobody really knows what they're you know you, but once they get you know
organic turmeric coffee?" right? And like they type it in. Ads you get people who are actually starting to try to look for us. >> Yeah, and if you have a little bit of website traffic, maybe it's from the
Facebook or the Meta Ads and you can retarget and you know, more touch points before people are ready to buy. It's like there's a whole whole thing. I know this is your interview, but if you you put the question back to you
this podcast to millions and millions of downloads. Like your acquisition channel the beginning and then email and now Meta I guess a little bit, but even though you're in a different business than me, it's probably somewhat similar.
mouth. You're trying to turn one listener into two. Tell your friends. your acquisition costs. Like all of these things really you could substitute any product and one exercise I did as part of this business coaching program
was trying to nail down your they called it your value chain where it was, you does it cost to acquire that customer? What are you selling them? You know, what's that customer worth to you? And then, you know, focusing on one or more
of those channel like dial one in first and then um diversify after that and and then um diversify after that and expand out, but um the thing they really hammered home was the fulfillment side. Like if you don't have rockstar
fulfillment and like a great product, a great customer experience, like none of the other stuff matters cuz if you have a leaky bucket down at the end, then the beginning, we just wasted all this money and we weren't we weren't prepared
for that influx. >> You hit on a really good point Nick is it costs so much to acquire, how do you retain? And customer service and all those things. To your point matters so much and you will be amazed by I was
in their emails to me. Because sometimes when I get bad or if I something and I go to customer service sometimes I can be short. But you are you're nice to them, they're really nice back. So I say when you're starting a
business like focusing on what customers want and asking them for feedback. Like You know, why is you why'd you buy it twice? I think that is something that actually people actually enjoy getting that note and you know, I see that as
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indeed.com/podcast. Terms and conditions apply. Need to jobs. >> Talk about this recurring revenue element of the business. So this is really the foundation of okay, we have
10, 11,000 dollars a month revenue kind of as our as our baseline. Hopefully there. So I want to talk about encouraging subscriptions. So really cool to have picked a replenishable product so that
you know, hopefully buy it over and over again. And it's really prominent on the sales page where the first option is the subscribe and save and oh look, you save $5. You can pick regular or decaf and so it's significantly less or noticeably
we can, you know, you know, hopefully increase, you know, we can save a little bit more if we add three bags to our cart. And I want to just hear how this has maybe evolved over time or what, you know, the
little levers you can pull to to nudge more people into the subscription. >> So, one thing we don't do also at top working on it with our manufacturer is like a free gift with subscription,
these, you know, blender thing, whatever it is. We're working on something there. That is a really good one we don't have. But what we have found, we realized with with the subscription kind of what we've done is basically said, "Hey, listen.
Number one is explain to them what the benefits are, you know, with this coffee that it makes sense to continue to buy it more than once for your body, right? That's first and foremost. You don't have to remember it.
free shipping on there because people don't want to pay for shipping in this world. Um we do that. >> Yeah, this is this is cool. This little comparison table like here's how we compare with other premium brands.
compare with other premium brands. Um and, you know, hey, look, it it for a bag of coffee. And but it's like, well, it's really not that much because this reframe. It's less than 80 cents a day. Um so, you're doing a good job with
>> The last one we put on there that order notification, no surprises when we put on more recently. We are very up front when the subscription's going to happen and say, "Do you want to cancel or keep it, right?" Like we do not want people
subscribe. I think brands will do that and they'll get the extra order, but then you lose customer satisfaction. We want people to buy our coffee because realize how much it costs us a one-time bag with we're shipping one
bag across the country, it's just cost a lot. So, the way we can get by that with doing two and three bags is cuz our shipping cost per bag might only cost us $2 more to ship three bags than than one, right? So, we can
bring our cost down on the two or three So, we have a lot of people who are on because now that's back in the price range of what you're used to for a >> Yeah. >> So, um that's how we've kind of thought
stuff on the beginning. It was just subscribe and save one-time purchase. more of like a last couple months thing and made it easier for people to check out. And then we have If you see the last thing, add-on only, what we really
we've been thinking about a lot is like, yeah, we're This is our by far our hero product, but we also have organic coffee like Purity that's tested for toxins. dark roast or medium dark roast from Central America, you can get ours for $8
adding on, and we're trying to build that side of the business, right? I think Life Boost just publicly came out on a on YouTube, so I'll say it, they're $50 company a year, and they only sell regular coffee like this. So, we do know
can get those people like we think that's how we think we can add more customers who are already buying this coffee, not having to go to different places. >> Have you ever tested
and this is obnoxious whenever I come across businesses that do this, but have one-time purchase? >> We have not tested it. I have thought about it a lot. And we actually about a month ago or two
this? Yes, we'll lose revenue and lose customers, but do we just remove this? Um >> It's the default for a lot of people Like, can I just from a customer's side, it's like, I
subscribe. Like, but I'm curious from the business >> I look at this as a customer >> if we pushed literally everyone toward >> I thought about this a lot, and as a customer, I'd be upset by it.
>> I think we need to show enough value to get people who want to do that, and we marketing and whatnot to get them to come back if they forget. But I It's not like I'm not taking it off our plate forever, but like for now
back. >> Mhm. like us. If they don't, otherwise you lose some trial, too, right?
said though is like you somebody sees $32.95, we also charge for shipping when [clears throat] $36 to buy one bag of coffee for us if they buy one bag. >> Okay, so that's another way to to urge people into the um
>> are Our margins are great, but I'll tell you what, people buy $36 coffee, they're like you know, they expect this to like be gold in their mouth. And it is great. But it is still coffee, right? So, I think people are like, "Oh, $36.
that's what it should be. >> Yeah, yeah. >> So, I like your feedback and I And we haven't We haven't It's not off the table for the long run, but for now it's no.
>> You mentioned Amazon is coming down the road and this seems to be the trend where 10 years ago brands would launch on Amazon. That was the distribution. we're going to get in front of this, you know, the eyeballs on
the world's largest store and you know, if we can capture just a tiny fraction a coffee or whatever category we're in, like we're going to be golden. That seems to have shifted where now we're going to launch
on our own store, uh we're going to launch on TikTok Shop, and then down the road we're going to bring some of our existing audience and traction to you know, starting completely from scratch there, shouting in the dark. Um
talk to me about with the the future Amazon strategy here. Amazon cuz we wanted to build up a brand that people know. Well, we have found us blindly about a month and a half ago and said, "Hey, people are searching for
Amazon?" And they showed us some results of what people are searching for and how Amazon right now. Lots of people go on meta, they search on Amazon, if it's not it's not on Amazon, I want it tomorrow,
know if you're a real business, are you faking it or not? That's how some people are, right? Like, that's a trust factor. >> Bro, I I never heard of you before, but >> That's exactly right. And Amazon takes a a large percentage of it, but they also
lot of really good things for you. And they give you the market where your cost I saw some numbers, I can't say the brand, but they were $80 on um Shopify
to get a customer, 80 on meta, but eight on Amazon to get a customer because the shopping for They're typing it in, they're shopping for it. It's a lot easier. Not just so they're they're ready to buy. So, we realized, listen,
lot of people um and we're going to we're going to do it next month and we'll see how it goes. >> Yeah, it shows up. I just typed in McCoy and it shows up as the number one suggested result. So, people are typing
Um and so, yeah, it's like a a matter of getting them some inventory or just >> We'll get them inventory. We'll get them inventory, but that's another process, somebody who knows Amazon very well. So, um none of this is easy, right, Nick?
But it's it is fun. >> Yeah, one step at a time, one step at a That was um we had uh Chris Graey talking about his mentioned something similar where it's like
yeah, we we're primarily selling it through our own site, but if people are looking for it on Amazon, I don't want to like not fulfill that. Like, it's it through through there or through us, you know, maybe there's you know,
different fee structure, but I'd rather make a sale than not make a sale. And I think he's like, I'm not going to pay for Amazon ads or whatever yet, but it was kind of we'll tap into this organic search
>> Good point. We'll do that We'll We'll We'll We'll learn from our mistakes before. We will not pay for ads on Amazon till we get X number of reviews. Because we did that wrong on the on our D2C brand. So, we will do ads on Amazon,
but once we have more reviews on Amazon. >> Yeah, that'll be curious how the the launch goes over there and if it >> I mean, yeah, we always learn something, right? Like I had too much where I'd be
like, "What did I do?" Right? But it's These are little risks, right? You go on there, and if it doesn't work, you know, we have been very frugal in how we thought about this. We hired somebody and one of my friends in marketing knows
us manage it, right? So, we're not out there spending on all these agencies, probably faster. We We have to go slow because we're not, you know, not willing to throw, you know, 50, 60, 70, 100 thousand dollars at this problem out of
>> Right. Yeah, we're we're not at the venture scale of just acquire as many out later. >> Right. This is a side business, right? Like this is not our full-time thing, so slow growth to us is also a benefit. Cuz
progress, like you're going to want to go faster, but sometimes slower is the right move um to learn. >> Yeah, yeah. Tell me about some of the tools and tech that you're using to run this thing,
especially run it part-time. >> Yeah, so Shopify's definitely our main >> Yeah, so Shopify's definitely our main thing. Um we use Klaviyo from a marketing standpoint. Um my my co-founder
stuff? >> it's email marketing with some SMS >> it's email marketing with some SMS pushing. You know, we obviously have um a couple design tools, obviously like Claude and whatnot for some ad design.
Um and then what else do we have? Like we do actually use an offshore person to native posting, and for like 12 dollars an hour. we didn't That was too much bigger of a time commitment for us. And I'm sure she
uses some tools. But it's really a lean stack, right? Like it is Shopify, it's some email marketing tool, and it's like AdWords, and and we're off and running. >> What's going on on the email side? So
when I go to the site, I think the first time I was probably greeted with a pop-up, you know, would you like 10 20% off whatever it was? Like enter your does. Yeah, what happens after somebody opts
>> So when they opt in, they'll get a welcome email with their discount code, and then they will get a series of emails. I think it's like three or four over time. Basically, "Hey, welcome. Here's who we are."
know, providing that discount code for them to to for trial. >> Okay, and then you can follow up with existing customers. Hey, your reorder is coming up or
Memorial Day sale is happening or whatever you know, it's just stuff like >> Shopify has all these integrations. So the sales we do on Klaviyo, Shopify has, they have the tools and tech to be able to send the
sorry, we do use other tech. We use Loop Subscription for subscriptions." So yeah, that's an add-on Shopify tool. We use like something called Koala Bundles to bundle our one, two, and three bag.
decently expensive. Koala Bundles I think is like $10. But Loop might be take like a 1% fee on all the subscriptions. So that, you know, that adds up, but they send out the emails, and then we
more tech than I thought. We use ShipStation for all the to get our cheaper pricing on packages. You can use Shopify pack anyway fulfillment. integrates together to let people know it's coming, and then where it's
their tracking as well. >> And did you say your manufacturer was orders come through? >> That's correct. >> So, where's your time going these days outside of the day job and parenting and
all that stuff? >> A lot of it's going into retail. So, we you know, I can shout out them out cuz they're great partners, Kowalski's and Lunds and Byerlys in Minnesota carry carry our coffee and we work with the
distributors for that. So, now that we work with these distributors and they've taken our coffee in, they have other retailers that they sell into that now retailers to be able to tell them, "Hey, you know, your your distributor carries
taste." So, I'm trying to expand retail um you know, pretty well because I do think like, you know, a bag of coffee in retail is profit every single time to us, you know, the first time even though we make less of a profit by far
>> Yeah. >> a profit every time. So, you have to scale a lot to make money, but we do know we'll make make a dollar every if >> Okay, this is another interesting channel that I completely missed was
okay, some people buying coffee online, great. We can acquire them through these marketing, but some people buy it in person and they find it at the local coffee shop or or the local store. So,
the distributor is or not marketing on your behalf. So, you have to find out who they already distribute to distribute to, but they will take our sell sheet into their meetings and say,
they have lots of brands. They're they're not our sales team. >> Yeah. >> But, they will open the door for us by us having that warm introduction. Hey, we sell into this group. You know, they
>> [laughter] >> Like and and then go after that. So, that is that's where I'm spending a lot of my time. And then we do demos and people can taste our coffee and you know, we try to help the store sell it
shelves. So, yeah, there's it's definitely two different businesses completely. >> Yeah, it's one thing to get the initial shelf, but then you got to move it. And hopefully people keep coming coming back
>> Right. We are not self-distributing, calling grocery stores ourselves and you know, we would we'll take the distributor's margin or we'll be our own distributor. Everything we're doing is like, "Yeah, we're losing margin, but it
allows us to live our lives and have this on the side still." The moment that manufacturer or distributor is the moment this is 10 jobs, right? >> How many brick-and-mortars are you in? How many retail locations are you in?
>> It's two it's it's like 46 stores. >> Wow. >> Yeah, it's great. It's Oh, it's really great. And it's fun and it's nice, but challenges, right? "Hey, we have a PO for you. We need this We need this
sitting here in 7 days to be picked up." And I'm like, "Oh goodness, I don't have company to make sure I have enough bags in time." And I'm going to go pay a PO because I'm thinking about other you know, so there's a lot of things when
you start scaling that and for the first time that you don't know. Right? So, um it is great, but it comes with challenges. But you know, Nick, you in business in life is to solve these challenges and like otherwise we'd be
>> Yeah, if it were easy everybody would be doing it. Yeah. That's really cool. So, that's um a significant piece of the distribution online stuff as well, hopefully we get more shelf space and just customer
awareness locally that this is um a premium brand of coffee and hopefully we get some people buying buying that and maybe they maybe they come online and >> love our online and to your point to be a subscription-only place. And people
one time they go to Amazon. Right? That's faster, it's easier for them. Go margin but it'll be a better customer experience. Keep subscriptions on our business cuz you'll get it all the time and then make
Like that'd be the dream and I think the best customer experience for everybody. >> Yeah, well I'm excited to see you see where it goes. What else does the future hold for MUDWTR? >> At some point potentially more flavors,
right? We focus on anti-inflammation. Our our mantra is whole organic food always. So you have these companies that are doing enhancements, they're great. They do what they do. You know, they add additives, they you know, they they add
that stuff. We are focused on whole food ingredients in our coffee. Always tested for toxins and mold. Always organic um and the next step me like that do we
have some sort of protein coffee from whole food ingredients or do we have a ingredients? One thing I would do want to say though is we are not a supplement supplement company. We want to be a company that is
you know, a health food company that people can start their day knowing that body every single day and not forgetting about it cuz it's coffee. And they're never get otherwise or they'd get very limited of it. So it's just an additive
to their day but we are we're not trying to be the next you know, I am H or We're trying to be a coffee company that can help people help people live. >> Yeah, it plays into this this gold rush of
anti-inflammatory even biodiversity like oh you know, all these different ingredients I'm getting all at once. Um >> In the whole food form too, right? Like we're not just taking pieces of it out.
We're trying our best and you know, our customers really love us I think. They it's it's been a very enjoyable, right? thing people are listening like it is an enjoyable ride.
Um and if you outsource a lot of the things, it can be enjoyable and also not take every minute of your day up. I would say just focus on outsourcing as to. >> Any big surprises along the way?
to be so high. Um I didn't expect our coffee to not go coffee. Um the amount of effort we've put into machines and testing and all these
things to make our coffee be as close to regular coffee and how it's brewed as possible has been a a monster challenge. Um and then, you know, customer service. People are asking lots of questions that
they have the answer to online, right? But they just want to email, "Hey, can subscription?" Yeah, here's a link, but no, I'll do it for you, of course, right? So just things that take me away that I you know, I expected, I guess,
but didn't know the extent of it. >> Got it. Got it. appreciate your transparency and like both the good side and and the running a physical product business in this category. So I'm
super cool. McCafe coffee.com. We'll link that up in the show notes. If you use promo code side hustle, you get 25% off your first order. So give it a try. off your first order. So give it a try. Again, McCafe coffee.com. Eli, let's
tip for Side Hustle Nation. >> Will do. And if you want to reach out to read them all, so I'll respond if you have questions about anything we said, like happy to have a dialogue. The number one thing I will say is know your
numbers and choose a product where the margins will allow you to stay in You have to have margins if you're shipping things online that either people are repeating as customers, so always think about the AOV of a cart
do they come back? Critically important, something I didn't think about enough as >> That's right. But hopefully there's some margin to play with in in between there. of host right out of the game. >> 100% 100%
>> I love the replenishable element to this, encouraging the subscription business, knowing your margins, you of different worlds that you're already a part of, that you already know, like
oh I know anti-inflammation, I know whole foods and wellness, and how do I blend that into kind of a daily habit that you know people can consume over and over again. I think it has the potential to be a really cool business
and I think we're catching it on hopefully the early side of it just a macorecoffee.com. I've got a free listener bonus for you this week. It's a big list of 50 other replenishable product ideas. If you're
consider selling something like Eli does, a product that gets used and So this list will help brainstorm some of those ideas for you and I've linked up the relevant archive episodes where applicable. Like
we had Chris Gray, his barbecue seasoning business. We had Connor Meekin with his bone broth business, I think organic bone broth business. So be sure to grab that resource. Just hit the show notes or the show notes link in the
right over there. You'll be able to download that for free. Big thanks to Eli for sharing his insight. Thanks to our sponsors for helping make this content free for everyone. sidehustlenation.com/deals
is where you'll find all the latest offers from our sponsors in one place. That is it for me. Thank you so much for tuning in. If you're finding value in the show, the greatest compliment is to share it with a friend. Fire off that
text message, let them know they should check this out. Until next time, let's go out there and make something happen and I'll catch you in the next edition and I'll catch you in the next edition of The Side Hustle Show. Hustle on.