It all started with a challenge – build an ecommerce business from scratch and see how many sales we could generate in three days.
For many entrepreneurs, building their first business can be intimidating. There’s seemingly hundreds of steps, choices and paths to get to the finish line of just launching your business, let alone generating traffic and sales.
Most of the time though, the whole process of building and launching an online store gets overthought and leads to paralysis by analysis. The truth is, building an ecommerce business can be simple—if you want it to be.
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Not only were we excited about our self-issued challenge, but we saw it as a great opportunity to show others that starting a business doesn’t have to be overly complicated, cost a lot of money, carry a lot of financial risk, or take a lot of time.
In this case study you’ll learn step-by-step, exactly how we decided on a product to sell, sourced a supplier, and sold nearly a thousand dollars worth of product in just a few short days.
In most cases, it takes some money to make money. We decided to allocate our small investment business $500 in startup capital to help launch.
Before getting started, we sat down to decide the tasks that needed to be completed to launch the business. It was our lightweight version of a business plan, since we didn't need to formalize anything beyond a quick understanding for our team.
After a quick brainstorming session, we settled on the following action items:
- Determine what to sell
- Select an appropriate business model
- Source a supplier
- Order samples
- Determine pricing
- Create the brand
- Set up the online store
- Take product photos
- Create blog content
- Set up social accounts
- Test multiple marketing channels
- Drive targeted traffic
- Make sales
What should we sell?
Because we only had three days to make everything happen, we decided to focus on current trending products.
We looked at and discussed each of ten products we identified as trending at the time we started the business.
After a bit of discussion, we decided that we all liked the idea of selling matcha tea—a finely ground green tea powder, predominantly grown in Japan.
We chose matcha tea for a few reasons:
- It’s trending.
- It’s fairly small and easy to ship.
- It usually comes in a tin or sealable bag, making it durable for transit.
- Demand for matcha is relatively stable throughout all seasons.
- Matcha is consumable which can be great for customer loyalty and generating repeat sales.
- Matcha serves a passion for tea lovers.
There were also some potential issues and drawbacks with the idea which we quickly noted:
- Matcha (in the quantities an average person would buy) is a fairly low cost product ($20-$30).
- If we chose to dropship, our margins would be smaller which could be particularly challenging with a lower cost product.
With these pros and cons in mind, we decided that matcha would still make for a great product to sell online.
It was time to get down to business.
Determining an ecommerce business model
The next step was to determine our ecommerce business model.
There were a few things we knew right from the start that made these choices easier. We knew that because we only had a few days to build the business and make sales, we had to sell direct to consumers rather than wholesaling to other businesses.
We also made the decision to dropship matcha instead of making or manufacturing the tea ourselves. Although making or manufacturing our own product would likely provide better margins, we decided to go the dropshipping route because it allowed us to get set up quickly, without having to manage and ship inventory ourselves.
Finding a high quality dropshipper
When setting out to find a dropshipper, we were looking to find a supplier who could offer their services at a low cost, who was able to give us private label rights, and someone who was reliable with low shipping rates.
The first place we started looking was locally. By simply doing a Google search for various terms like “dropshipping tea toronto”, “wholesale tea supplier toronto” and “wholesale tea toronto” – we came across a few results:
We emailed some of the first results to see if they’d be interested in working with us—unfortunately, we hit a bit of a roadblock.
We found that the majority of wholesalers or suppliers who are selling tea wanted to keep their personal branding, and didn’t want to offer private labelling.
The local suppliers were aiming more towards working with a reseller who’d stock their teas at a tea shop, or cafe. That’s not what we wanted.
The search continued by broadening the scope of what we were looking for.
Broadening our product supplier search terms
The new search terms were "tea and coffee dropshippers", "tea suppliers", "white label tea", "private rights tea", "tea wholesalers" – and the results were all over the place.
It isn’t easy finding a supplier. Emails back and forth with multiple suppliers showed that in most cases—nobody was willing to work with us unless we had weekly minimum order quantities.
We couldn’t guarantee a minimum order because we were just getting started.
That’s when we went deeper.
On the 10th or so page of Google, we started to get a bit discouraged. But one thing that we found was that the best way for someone to take you seriously is to actually pick up the phone and speak to someone.
It’s a bit daunting to have to speak to someone and to essentially pitch your (non-existent) business to them over the phone - but it’s usually what works best and in our case did the trick.
After all the searching we ended up finding a dropshipper who offered everything we were looking for.
- Low cost per unit pricing
- Private labelling (letting us use our own brand name and labels on their product)
- Low shipping rates within the United States
One of the greatest things about the dropshipper we chose is that they’re clearly run by people who truly care about the product.
They were willing to speak to us over the phone and email and were on-the-ball when it came to answering all of our questions.
Ordering a sample product to verify product quality
Before we could move forward, we needed to get in some sample product to test and inspect. Obviously we had to try the tea before we could sell it, plus we needed it for product photography, so we had one tin overnighted to us.
Unfortunately shipping to Canada was $30 due to the shipping restrictions of the dropshipper. The high cost of shipping to Canada and other countries outside of the USA made us realize that we would be limited to selling to just the United States.
Upon receiving the sample, we tested it in the office with several heavy tea and matcha drinkers to get their opinion. The reaction from everyone was overwhelmingly positive.
It was time to move forward.
Determining product pricing
We wanted to create a somewhat premium brand and therefore had to price it accordingly. We did some searches to see what similar products were selling for. They ranged from $15-$30 per 30g of matcha.
We ended up settling on $24.99 as our selling price. Our cost was $10.25 per tin, so we were looking at nearly a 60% profit margin on each tin that was sold. In the world of dropshipping, a 60% margin is considered quite high.
Keeping in mind different psychological pricing tactics, we knew that most consumers associate price with quality. That worked in our favor.
Creating and designing a brand
Keeping in mind our higher end price point and knowing that there’s a movement right now towards organic, pure, healthy lifestyles - we knew that we wanted our store and branding to reflect that.
We looked at a few different brands and lifestyle companies that were in the space - like SkinnyMe Tea, Lululemon and a few lifestyle-focused Instagram accounts.
There were a few commonalities in terms of design and color. A lot of white space, clean type, as well as different copywriting techniques that encompass the idea of “a better you”.
That’s what we ended up focusing on—and as you’ll see a little further down, it’s conveyed through the messaging and branding on our storefront.
Deciding on a business name
When it came to the business and product name, we wanted something that was simple and approachable. We decided to turn to some of the name generators online, including Shopify’s own business name generator tool.
After a bit of brainstorming and searching on the various services, we narrowed it down to a list of 12:
- Pure Matcha
- Matcha Love
- Zen Matcha
- Official Matcha
- Touch of Matcha
- Taste of Matcha
- Hello Matcha
- Daily Matcha
- Inspire Matcha
- Matcha Lux
- Dreaming Tea
- Dreaming Matcha
In the end, we settled on Hello Matcha. Hello Matcha was simple, friendly, easy to remember and reflected the brand we wanted to build—plus the “.com” was available.
Designing a logo that was simple and effective
When it came to the logo, we wanted something that communicated the “clean”, “fresh”, and “pure” brand we were trying to create.
If we had time we would have looked at and considered hiring a designer to help us create a logo that reflects the brand we were looking to create, unfortunately, our schedule didn't permit this.
None of us on the team are designers, but we do have a basic understanding of Adobe Photoshop—so we went with a logo that relied mostly on the use of a single typeface rather than lots of graphic design.
After a few iterations and back and forth on the font we were going to use - our logo was complete.
We used a simple san-serif font, and one of the default custom shapes available in Adobe Photoshop for the tea leaf.
The final result:
Nothing too complicated—but gets the point across and also looks great in a variety of sizes. It was perfect for us.
Creating product labels
The next step was creating product labels. It ended up taking a few iterations. Because we weren’t actually shipping the product ourselves—we had to make sure the labels were the right measurements, color profile and as high quality as possible without getting too expensive.
After speaking to the dropshipper, we got the exact label dimensions so we could get to work. We put together a few different designs in Photoshop that were fairly simple, but effective.
Some highlights that we wanted to include on the label were:
- Our social accounts
- A quote about healthy living and tea
After about 30 minutes, we came up with several iterations. Here they are printed out on regular computer paper:
We all agreed on the final label for print:
We ended up ordering some sample stickers versions of the label at a cost of $16.95 from a local printer around the corner from our office. This was just so we could see how it looked in real life.
It was a fantastic feeling to feel the stickers and see the product start coming together.
Once we picked up the local samples and were happy with them, we submitted the print file to the online sticker printer StickerGiant at a total cost of $85.56 for 250 sticker labels.
We had the actual stickers shipped directly to the dropshipper who would be applying them to the actual tins of matcha to save time and money.
Taking the product photography with our smartphones
Keeping in line with the bootstrapped nature of this project as well as time constraints, we knew that we couldn’t use professional photography services. While that would have been ideal, it wasn’t a viable option for us.
The good news is that from past experience, we knew that we could use our smartphone and a bit of magic to get great product photos.
We found a well lit place in the office near the windows and set up our sample tin of matcha on a white surface.
Using an iPhone 6, we took a few sample shots at various angles.
Once we had a dozen or so photos, we exported them to the computer and did some basic edits in Adobe Photoshop just to boost the brightness.
To get a nice clean image of the tin isolated on a white background, we used the manual background removing service Clipping Magic. This left us with a beautiful product, isolated on a white background.
Below you can see some of our photos, both before and after.
Setting Up Our Shopify Store
Now it was time to set up our Shopify store. Since we were only selling one product without any variations, we needed a theme that was good at showcasing a single product.
While we could have easily used a free theme from the Shopify theme store, we decided to spend some of our budget on the Startup Theme ($180) to launch with.
It’s beautiful, easy to customize, and offers a lot of additional functionality in terms of content layout that otherwise would require a relatively extensive knowledge of coding. The team at Pixel Union really did a great job developing this theme—we highly recommend it for any new storeowners.
We wanted to create something that anyone could do, too—so we avoided adding additional custom code whenever we could.
The major assets we needed to make the store look great were:
- A hero image for the homepage
- Great product photography
- About page copy
- Home page copy and unique value proposition (USP)
After a few hours of work, Hello Matcha Tea was born:
Setting up the Product Page
Product pages are important and setting them up well is vital to conversions. This is the page where people make their buying decision after all. There were several things we wanted to highlight on this page:
- Product title
- High quality product photos
- Quantity (30g)
- Instructions for how to use the product
- General info about matcha
- Key benefits of matcha
We landed on this:
Sales channels and marketing strategies: full speed ahead
Marketing is all about finding the right channels for your particular business and getting in front of as many qualified buyers as possible. We utilized several sales channels in an attempt to get as much traction for the business as possible in three days.
Some worked better than others and some flat out failed. But we wanted to include everything below to show you our thought process and demonstrate that you need to test and experiment to figure out what will work for your business.
With all hands on deck and the clock ticking, we began our marketing efforts, one channel at a time.
Personal outreach to friends and family
Because our supplier could only ship to USA cost effectively, there was only one person on the team that could personally reach out to friends and family as the rest of us are based in Canada and have mostly Canadian friends/family and contacts.
Using a combination of Skype, emails, Facebook, Twitter and Google Chat, Tommy reached out to everyone in his personal and professional network that he thought would be interested in trying our matcha tea.
Here’s what his screen looked like in the midst of his outreach:
This proved to be very effective on day one as several sales came in through this one-on-one outreach.
Not everyone that was contacted bought, however, of those who didn’t buy, nobody acted like they were horribly inconvenienced either.
Product Hunt is a community website that surfaces the best new products, every day. Typically people share the latest mobile apps, websites, hardware projects, and tech creations. It can be an effective channel for launching new products and ideas however, every post submitted needs to be approved by a moderator.
This proved to be extremely impactful as Product Hunt drove over 900 visitors to Hello Matcha.
These 900 visitors ended up converting into 12 sales. While this turned out to be great source of traffic and revenue, the lesson here isn’t necessarily “get listed on Product Hunt” but rather to know who in your network has access to more people or can help you in some way.
Of course, Product Hunt is just one of the many platforms that curates new products. Be sure to do some research to find out other blogs or platforms that work in the same way.
Reddit is a massive entertainment, social networking, and news website which spans all sorts of topics, and is home to much of the internet’s most interesting content, images, videos and everyday comical online occurrences.
Most importantly, however, Reddit is also home to “subreddits”—categories dedicated to certain topics and interests which can be a really valuable source of qualified traffic. We’ve seen this first hand in our own businesses and documented it from others like Beardbrand. Reddit requires a calculated and careful approach as its users are smart and protective of the community there.
In other words, in most cases they don’t want to be pitched to and sold to directly.
Our Reddit approach was to create something informative and entertaining for tea enthusiasts that would live on the Hello Matcha blog, and that we could link to from relevant subreddits.
When searching for ideas for a piece of content that would resonate with our target audience, the first thing we did was head over to BuzzSumo – a site that enables you to search for relevant content using keywords, and then presents you with the most popular content based on social shares.
We searched for popular content containing the word “tea” from the last six months. Our goal was to find something that was already popular, but that we could repackage, reframe and publish in a new way.
One result that looked interesting was a click bait-style article on Diply that currently has over 91k shares. The article contains a video about handy uses and applications for used tea bags:
Here’s the article on diply:
While the folks at Diply decided to focus on one tip from the video in their headline, the video actually contained five additional tips that we thought readers would find interesting.
So, we took screenshots of each tip in the video and packaged them into a list post with the full video at the bottom of the post - an approach Buzzfeed frequently uses.
With our post published, it was time to share it on Reddit. Even though this post was related to tea, we realized after-the-fact that it was really more about useful life hacks and money saving tips than tea, so we decided to share it on Today I Learned (TIL) – a subreddit dedicated to surfacing interesting facts and tidbits of information.
Here's our post on Reddit:
This post generated 11 upvotes, 8 comments and 48 pageviews for the blog post, however, it led to no sales.
We quickly realized that even though we were able to generate some visitors, they weren’t targeted visitors. We needed to get our content in front of actual tea lovers.
So we headed over to /r/tea and noticed that people liked to post interesting tea sets and mugs and that those posts frequently got a lot of upvotes. We decided to filter the subreddit by top posts in the last year and collect photo’s of the most upvoted tea sets.
Next, we took the photos, aggregated them and repackaged them into a blog post:
Unfortunately this post didn't have a chance to drive much traffic as it was removed by moderators shortly after it was submitted even though it didn't break any guidelines or rules that we could tell.
But, it's another example of how reddit can be a tough nut to crack and you really need to spend some time to understand the culture of the subreddit you're posting to.
Overall reddit proved to be an interesting source of traffic and despite not generating any conversions with these two attempts, we all agreed it still had potential. For example, in addition to the sub-reddits above we could also explore ways to participate and get in front of the communities at /r/shutupandtakemymoney, /r/TeaPorn, /r/muglife.
We’ve discussed Instagram marketing before and know that it can be a powerful marketing channel and, if used correctly, can drive highly targeted traffic and sales to your online store.
We immediately began our search for popular Instagram influencers with hundreds of thousands of followers that would be a good bridge between our product and their audience.
We spent a few hours and accumulated a list of potential accounts to reach out to in hopes that they would let us purchase a sponsored post on their account. That means paying them a fee to post an image of our choosing, with a potential @hellomatchatea shoutout as well.
Some of the different categories of accounts we initially targeted were:
- Health & Fitness
- Weight Loss
- Workout Apparel
We found these accounts through the following hashtags on Iconosquare:
#tea #teaaddict #teagram #tealovers #teatime #teacup #teaoftheday #healthy #tealover #matcha #matchatea #followyourdreams #afternoontea #instatea #like4like #fitness #teatox #detox
Unfortunately, a lot of the accounts we found weren’t willing to work with us on such a small budget ($30-$60), or, in such a short period of time. In fact, many of the accounts we contacted didn’t email us back until a few days after our challenge.
We ended up simply commenting, liking, and following accounts that might share the interest of healthy living and tea.
Because Instagram only allows links in bio's and not on posts themselves, and because it's a mobile app, it's a pretty high friction experience to go from Instagram to checkout on an online store.
Because of this, we believe sales coming from 'Direct' - people typing the website directly into their browser - would have come from people who saw Hello Matcha on Instagram.
If we were to do this again, we would most likely provide a specific discount code to Instagram followers so we have a relatively simple way of tracking any customers.
Pinterest was another sales channel we were eager to explore and test. A quick search for ‘matcha’ on Pinterest revealed hundreds of pins for matcha recipes that were getting thousands of repins:
While this was promising, we knew we didn’t have time to grow an organic following on Pinterest in just three days. So instead of building our own audience we decided to try and tap into someone else’s. That meant finding an account that would accept a sponsored post/pin.
While searching pins with matcha in them, we noticed a few recipes for healthy green tea lattes that were particularly popular. After some research online, we came up with a recipe to create a version of Starbuck’s green tea latte and posted it to our blog with a photo that could be pinned.
To place our post/pin, we searched for healthy living and fitness accounts that posted healthy recipes. Then, for accounts that also had websites with contact info, we reached out with a simple email:
We heard back from one account owner:
The account predominantly posted health and fitness related pins and had over 11,000 followers, so for $20 we thought it was worth a shot.
We transferred the money via paypal and shortly after our pin went live:
The pin generated 50 repins, 7 likes and 17 pageviews:
In the end, no sales could ultimately be attributed to this campaign. While this was somewhat disappointing, it wasn’t all that surprising either. Given more time we all agreed that, done right, Pinterest has the potential to be an important sales channel for this business – especially if we focused on creating and curating great matcha recipes for sharing.
Facebook paid advertising
Of course we were interested in also trying Facebook ads to drive traffic and sales so we set up a very small Facebook ad campaign that directed users to the Hello Matcha homepage.
Here was the ad we set up:
For this ad we targeted users in the United States between the ages of 18-50 who were interested in "green tea", "matcha", "Gyokuro and Sencha" (types of green tea), and "David's Tea" – a major tea company.
We ended up spending a total of $24.11 on Facebook’s ad platform which resulted in:
- 34 Likes
- 1 Comment
- 2 Shares
- 45 visitors to Hello Matcha
- 1 Sale
Although, we ultimately lost money with Facebook Ads, it’s important to note that the campaign was very limited. We didn’t spend any time tweaking it, adjusting audience, ad creative or copy once we launched the ad.
We ultimately feel that Facebook Ads could be a successful channel given more time and attention.
We didn’t focus on Twitter as a marketing channel, however, each of us did tweet out our new store and received some retweets. In total, Twitter brought in 184 visitors, and one sale which came from this following Tweet:
Marketing Channel Results - Overview
At the end of the 3 day hustle, we were exhausted but felt a great sense of achievement. Here's a final breakdown of the results:
Total traffic: 2,414
Added to Cart: 101 (4.18%)
Reached Checkout: 97 (4.02%)
Purchased: 32 (1.33%)
Total Revenue: $922.16
Some of the sales were hard to attribute to the various channels, however, based on our analysis of all of our data, here’s where we believe all the sales came from.
- 6 Direct Sales (Friends & Family)
- 12 Product Hunt
- 0 Reddit
- 0 Pinterest
- 1 Twitter
- 1 Facebook
- 12 Instagram/Direct*
*Because Instagram only allows links in bio's and not on posts themselves, and because it's a mobile app, it's a pretty high friction experience to go from Instagram to checkout on an online store. Therefore, we believe sales coming from 'Direct' - people typing the website directly into their browser - would have come from people who saw Hello Matcha on Instagram, however, we can't be 100% certain.
Overall setup and marketing expenses
We gave ourselves a budget of $500 in the beginning but ended up spending a little over that. The biggest upfront expenses were the premium Shopify Theme which was not needed for this business, but we loved the design so much we couldn’t resist.
The rest of the costs were minimal, and included things like custom sticker labels and sample label stickers. We would have loved to been able to purchase these in a smaller quantity, but unfortunately that was not an option.
All other costs were minimal. Let’s take a look at the total breakdown:
- Premium Shopify Theme (Startup by Pixel Union) - $180
- Domain Name - $10.17
- Sample Product - $41.25
- 250 Product Labels - $85.56
- Matcha Labels (Local Samples) - $16.95
- Facebook Ads - $24.11
- Pinterest Sponsored Post - $20.00
- 32 Tins of Matcha @ $10.25 each - $328
- $5 Shipping x 32 tins - $160
Total Cost: $866.04
- 32 Tins of Matcha + Shipping Revenue Collected - $922.16
Total Revenue: $922.16
While we "only" made $56.12 in profit, many of the costs outlined above were one-time startup costs and experimental marketing expenses. Over time we believe that we could optimize and refine our approach to reach increased profitability.
Start your own store
Now that we’ve shown you the entire process of building an ecommerce store – what’s stopping you from doing the same? The key takeaway is just start.
We hope that you found inspiration in our mini challenge and that you learned something along the way.