How Andy Hayes Started A 7 Figure Tea Business Online

Andy Hayes

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Published: March 17th, 2019

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Andy Hayes

Founder, Plum Deluxe Tea

$75K

revenue/mo

Founders

Employees

Plum Deluxe Tea

plumdeluxe.com

from Portland, Oregon, USA

started February 2012

$75,000

revenue/mo

Founders

Employees

Discover what tools recommends to grow your business!

platform

WooCommerce

reviews

CM Commerce

payments

Stripe

app

FacetWP

Gravity Forms

Pixel Cat

other

Moonclerk

Knack

Discover what books Andy recommends to grow your business!

The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join ... Timothy Ferriss

Traction: Get a Grip on Your Business Gino Wickman

Want more updates on Plum Deluxe Tea? Check out these stories:

Hello! Who are you and what business did you start?

I’m Andy Hayes and I’m the founder of Plum Deluxe, an online purveyor of delicious loose leaf teas.

We’re based in Portland, Oregon. We are well known for our popular tea of the month club community - subscribers receive a surprise tea in the mail each month, in addition to perks like free shipping and discounts. Members also a lot of joyful community aspects such as tea swaps, postcard pals, and much more.

In addition to that, we also have an online store where you can purchase a la carte teas of your choosing. We have our own in-house production team and hand-blended each batch, to ensure the freshest flavor. We also carry a very carefully curated selection of pretty and practical tea accessories such as infusers, mugs, and tea add-ins like honey and sweets.

We now have one of the largest tea subscription boxes and are about the pass the 7 figure mark in annual revenue.

how-andy-hayes-started-a-7-figure-tea-business-online

What's your backstory and how did you come up with the idea?

I started off with just a blog, I was living in Europe and writing about my adventures and experiences. My focus was really on enjoying a slower pace and appreciating the little things in life. I was working in enterprise software - my day job not all that interesting, but I did enjoy it.

You can read all the books you want about the different cycles and phases of businesses, but I’ve found that nothing replaces lived experience! Just focus on where you are and always be asking yourself, what is the NEXT RIGHT step. That’s it.

Eventually, I left my corporate job looking for something more fulfilling - I did consulting on the side related to my previous job, but started rolling out some advertising display ads and affiliate relationships to try to generate some revenue from my efforts. Back then generating traffic (at a low cost) was pretty easy, but I wasn’t able to generate a lot of revenue.

Despite a lot of different trials and tribulations, I never was able to make something work with that business model. So I decided - since I didn’t want to be in the services business anymore - that I’d try launching my own product.

I had a lot of blog followers who even said that they wanted me to have my own product, so I pursued something that I had an interested in - tea! By this point, I’d moved back to the west coast and was missing some of the flavors and offerings I was used to when living in Europe (American tea culture is very different than European tea culture).

I had someone helping me with blog admin tasks that worked at a tea farmer’s market booth on the weekends. I had her ask her boss if she’d help me (this company was located on the east coast so I didn’t think there was much threat of competition). The good news is that she said yes!

Take us through the process of designing, prototyping, and manufacturing your first product.

With my mentor in hand, I began the process of learning about tea - and similar with having a food product, it’s all about having your recipe!

In tea, though there is so much to consider - how it looks, the cost of each ingredient (and their proportion to the overall blend), the aroma, and of course, the taste!

Tea makers have to carry hundreds of different types of ingredients to create complex tea blends, so I was lucky to have this resource when I started.

I spent a LOT of time on my recipes, and she helped me make them into reality - essentially coming up with recipes and testing them. It sounds simple, but it’s something that has taken me years to master - it’s the magic of the biz. :) For example, my first recipe was for a tea for reading. It’s one of our best sellers now, and it is a tea that combines caffeine (black tea) and calming ingredients (rose, lavender, chamomile). It’s something unusual and unsuspecting, and the ingredients combine together to make something bigger than the individual parts. That’s the work of creating tea recipes - the right balance, the perfect combination, taking into account a lot of inputs: aroma, taste, cost of ingredients, visual appeal, and more….

I started with having my mentor as my only supplier. This lasted about 6 months before I exceeded the capacity that she could offer me, so I then spent 1-2 years building up my own supply chain - attending trade shows and meeting farmers and suppliers, testing and tasting recipes to better understand how to create recipes, etc.

Describe the process of launching the business.

For the launch itself, I had the blog with is own newsletter and several thousand subscribers, so I had a built-in market ready to go - I didn’t have much of an ability to produce inventory (and an even smaller budget to purchase said inventory) so I was pretty much sold out of tea every time I put it up. The good news is that the subscription was more popular, so I got paid up front before I had to purchase the tea, and it also helped to forecast the inventory.

Lastly, trite as it might sound - keep going! Most businesses fail because the owner quits. If you keep going, you’ll master the skill you need to really hit success, and you’ll catch a lucky break

Since I wasn’t sure how much of my list would be interested in tea, I also set out a concerted launch effort by sending tea samples to tea blogs and subscription box reviewers, and also SEO optimized pages on our site and blog (having an already existing site before made these kick in a little faster). This turned out to be quite effective - in fact, many of our first and still long-time customers were tea lovers we found online that had followings.

The SEO piece was also a lot easier now than it is now, but it’s basically “free” traffic so it’s worth the effort to work on getting it right from the beginning. Having said that, it does not necessarily take effect quickly so I would suggest making sure that you create landing pages and have the ability to take orders - or at least pre-orders - from day 1.

There are a number of services that you can use for temporary “test” landing pages, but I suggest using the tools you’re going to have in place long-term - for example, in my case, Wordpress for landing pages, and MailChimp for email - and just gather emails. You could tell them they get a bonus when they signup, and just deliver that bonus later. If you’re able to take payments right away, do it! Nothing is better than cash in hand when you’re starting.

I made sure that before I sent out samples, people could signup for subscriptions on the site - and in the beginning, every order counts, no matter how random the source.

Since launch, what has worked to attract and retain customers?

I already had a blog process setup, so I used the blog with engaging, delicious content - recipes, tea parties, etc. - combined with an email newsletter to great effect.

It’s the cornerstone of our marketing system today because it’s high quality and it’s consistent. Always interesting lifestyle imagery, engaging topics, and thoughtful presentation of offers. It’s also what drives much of our email marketing - a newsletter with recipes + offers is much more appealing than just an email with sales offers.

Currently, we publish 2 blogs per week, but we at times have published up to 5 post per week. We pay authors (varying rates) for their work and we have a stable of writers that write for us on an ongoing basis, so they know our standards and preferences.

Every article we publish is based on keyword research using the Google Keyword Tool - we post one more “lifestyle” type post per week that is tea-related (like scones recipes or tea party themes) and then one post that is very tea-keyword-orientated (how to resteep tea, what is the best tea for sleep, etc).

If you’re unfamiliar with SEO, a great place to start is Moz.com - their videos and tutorials will help you go down the rabbit hole of SEO. In all cases, though, writers are required to take lifestyle photography (yes even on an SEO keyword post) which we use for both social and paid ads marketing.

Examples of some of our most popular articles (in terms of both traffic & sales)

I started out with just a newsletter weekly but now we also send a variety of different followup emails based on a customer’s behavior - purchase/not purchase, clicked/not clicked, etc. This is one of those things you just have to build up slowly as you start to understand your customer and what times of followup is appropriate/helpful.

To start I didn’t have a lot of spare cash so I did a lot with PR and blogs. This was more effective then than it is now because it is harder to find those influential blogs (too make fake influencers these days); but, if you are on a shoestring budget it’s a good place to start. It also helps for SEO.

However, the biggest bang for your buck will likely be mastering Facebook and it’s platform - which we all know is pay for play, so you’ll have to come up with a small amount of budget to start for marketing. We’ve spent countless hours (and paid numerous coaches) before we cracked the code that works for us on Facebook, but it is working really well for us now. Some of the most important things to know when it comes to FB Ads:

Start with retargeting (that’s showing ads to people who already know you but did not purchase). Master this - and start building information on your Facebook Pixel - before you do anything else
Once you have that down, try working with the 1% “Lookalike” audience to prospect for new customers. This may take awhile because your pixel audience is small, so try layering on interests - 1% Lookalike and your largest competitor, for example. Don’t use interest-only targeting until you master this.
Great photography and videography is key, as is smart copy. Research what’s out there in your industry and constantly test - what works for one company may not work for other people.
Make sure you have good offers. For example we have a $5 trial for our subscription, which converts affordably - if we promoted our subscription with the standard $30 front charge, it wouldn’t be as cost effective.

As for Amazon, we’re running a small test there but I have a lot of concerns about Amazon in terms of product quality and tax issues. So we are keeping that a small part of our business.

How are you doing today and what does the future look like?

Today we generate a small profit because we deliberately pour funds into our growth (mostly in advertising) - which can be expensive at times as you try to push your knowledge. But as we grow we continue to optimize our cost and margins, so it’s always a battle We continue to pursue growth (a typical year for us is 200%!) all out of cash - no debt and no investors, just a credit card that gives us 30 days float.

I didn’t mention it before, but the company started out in my basement! (I think I’ve blocked that part from my mind.) A pre-built workshop, but a basement workshop nonetheless. Now we have a small 2,000 sq ft studio where we have 3 production staff, an admin and a marketing person who all support our operation, as well as numerous freelancers.

About half of our revenue comes from our subscriptions and half from the a la carte tea sales - but, a good chunk of the tea sales come from subscribers, so the subscription continues to be a core focus for us, while I work on extending our product offerings carefully and thoughtful to maintain our brand focus.

In the short term, we hope to find some stability in our company and continue to bring on more staff members to distribute the workload more evenly.

Long term I’m hoping to find a partnership with a farm here in Oregon to grow some specific ingredients that I have a hard time finding. (A lot of tea ingredients do grow here in the Pacific Northwest, so that’s handy!) I also want to find more ways to make our community flourish - more in-person events and maybe regional ambassadors to help us do that.

Through starting the business, have you learned anything particularly helpful or advantageous?

You can read all the books you want about the different cycles and phases of businesses, but I’ve found that nothing replaces lived experience! Just focus on where you are and always be asking yourself, *what is the NEXT RIGHT step. *That’s it. What’s right in front of you. If you look too far ahead you’ll miss where you’re needed right now. The further along your journey the further ahead you can look.

Take ONE thing and run with it, run like your life depends on it, run like you have something to prove - because you do. One. Thing. At. A. Time.

One of the best decisions I made was deciding that some of the things I wanted to do to make my business different and unique were things people told me I shouldn’t do. People said I shouldn’t charge quarterly for my subscription - but it’s one of the best decisions ever. People said I needed LOTS of teas to start - 4 wasn’t ideal but it worked just fine for me. The difficult part is knowing what advice you should take and what advice you shouldn’t.

Also find mentors or masterminds (free AND paid) to help you. You can go further and faster with help. But, make sure you know enough to stand up for your vision and understand the advice others are giving.

Lastly, trite as it might sound - keep going! Most businesses fail because the owner quits. If you keep going, you’ll master the skill you need to really hit success, and you’ll catch a lucky break.

What platform/tools do you use for your business?

Our store is hosted on WooCommerce - I like it because of the ability to easily customize.

You do have to have a bit of programming skill or interest, otherwise, Shopify might be more up your alley!

My favorite Woocommerce plugins:

Conversio - great receipts, email followup, abandoned cart.
FacetWP - product filtering.
Gravity Forms
Pixel Cat - Facebook pixel.

We use Moonclerk to help manage our subscriptions. It’s a front-end for Stripe subscriptions - and our store payments are managed by Stripe, so they all end up in the same place.

To manage the complexity and size of our subscriptions, we use a custom build database on the Knack platform. (Don’t worry, though, we got to about 500 on a spreadsheet!)

What have been the most influential books, podcasts, or other resources?

The 4 Hour Workweek by Tim Ferriss has been mentioned by many here at Starter Story, and that book helped me immensely.

If I was starting today, though, I’d probably search though Tim’s long form podcast episodes for similar businesses or topics.

Podcasts are also great resources - I love How I Built this by Guy Raz and Impact Theory by Tom Bilyeu (best podcast ever about mindset.) I’m sure you can find podcasts specific to your industry or niche.

Also for those who have some ‘lift’ in your business, I strongly suggest the book Traction (Gino Wickman) to organize your business and its components as it grows in complexity. It’s an “entrepreneurial operating system” and what’s great is it helps you with some very practical tools that will help your team and processes be sustainable. (Tip: the book is great, but don’t be afraid to customize/adjust the advice to suit your own needs.)

Advice for other entrepreneurs who want to get started or are just starting out?

I remember when I started I had a lot of good ideas and I dabbled a little bit on each. Not a winning strategy, friend.

Take ONE thing and run with it, run like your life depends on it, run like you have something to prove - because you do.

And only when you’re satisfied that isn’t the right strategy do you move on to the next thing. (Or once you have that idea working, move on to the next thing.)

One. Thing. At. A. Time.

Are you looking to hire for certain positions right now?

Sometime this year we’ll likely be expanding our in-house marketing team. Someone who would love to manage a small marketing department at a growing startup but isn’t afraid to be heavily involved in the details as they start should stay on our radar. And of course we’re always looking for production workers (it’s a lot of fun) - but those positions must be local to Portland, Oregon.