Starting a business in a saturated Market . Is it too late to start a herbal tea brand?

[sarah_ana]

This is my first time posting in this forum I discovered @MJ DeMarco a month or so ago and began reading Fastlane millionaire and I've been on my pursuit of living life on my own terms since then.

A little about me :

I'm 21 years old and from the Uk and have already started 2 businesses (both failed). At 17 I started a clothing brand which failed due to my poor business model, (I held no stock) I was ordering the items from my manufacturer (in China) once the customers ordered from the site and then packaging and shipping the items to the customer . Then covid hit and I could no longer sell clothing in this way due to HIGH shipping fees. The 2nd business was a clothing business (yet again) it was meant to be a store where people could shop from faith-based brands but this also failed as even though I did conduct surveys to see if there was a market once I set everything up, I got no sells and barely any visits to the store - so I gave that up.

Now I've come up with a new idea a subscription-based herbal tea brand that combats common menstrual issues: e.g. headaches, fatigue, cramps, nausea etc . ( I would like to get into the retailers and not only be e-commerce )

I have already done the grademybuisnessidea test I got a score of: 84.9 ( you can check my results out)

GradeMyBusinessIdea.com: eccomerce herbal tea brand (Results)

Grade My Business Idea: Rate your business idea and discover its potential for massive marketplace success. Is your business idea worth pursuing? Or should it be forgotten? Based on the CENTS Framework authored by entrepreneur and best selling author, MJ DeMarco.

www.grademybusinessidea.com

Some things I already know are: ( I know this from hanging in women's forums )
- many women drink tea, daily for stress relief and as a healthier alternative to juice
- many women suffer from particular issues during their cycle
- many women dislike having to take over counter-pain relief for their cramps/headaches

My presumptions are :
- I will be able to find/ curate herbal tea combinations to help with said issues
- I will be able to find an organic herbs manufacturer to help with creating the teas
- women would be open to paying for teas on a subscription-based model
- I can make my tea brand different enough to stand out in an incredibly crowded market without having to sacrifice my profit margins.

I'm not quite sure what my next steps should be and would really like a gentle nudge in the right direction.

I am just considering ordering some herbs and creating herbal tea mixes and giving them out to women around me to see what they think in terms of taste and how it makes them feel and then going off from there depending on their feedback to begin setting up, branding, name, packaging etc.

But I'm really not sure.

Any input would be extremely valuable , thanks in advance.

Sarah

 

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[krisna_21]

Hi Sarah, in my point of view your idea is great, but how's the market research?
is it too much of competition with competitive price?
how can you stand out?
who's going to be your target market? if you have women communities as a start it's great, but if it is friends and families then most likely they will buy but just to cheer you up/ feel pity, and it's not good in the long run...(been there done that)

as MJ said, you should not have a biz based on your passion/ what you want, but it should be on pain points/ what the market wants! but I am still learning as well here

 

[sarah_ana]

Hi Sarah, in my point of view your idea is great, but how's the market research?
is it too much of competition with competitive price?
how can you stand out?
who's going to be your target market? if you have women communities as a start it's great, but if it is friends and families then most likely they will buy but just to cheer you up/ feel pity, and it's not good in the long run...(been there done that)

as MJ said, you should not have a biz based on your passion/ what you want, but it should be on pain points/ what the market wants! but I am still learning as well here

Thanks for getting back to me , the market research is the part I’m not sure how to do properly, having messed up in the past

It’s more so that there many many tea brands out here in general, a trip to the supermarket easily tells me that , and they are relative inexpensive. You do have some brands that are on the higher end though .

From my Google searches I’ve seen a few brands that do sell teas specifically to deal with PMS but I have yet to find a brand that is creates teas around treating symptoms of PMS on a subscription model .

 

[Akaushra]

The only way to know is try. Go, now. Make me some tea.

 

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[sarah_ana]

The only way to know is try. Go, now. Make me some tea.

Noted , thank you .

 

[Johnny boy]

This is a marketing business above all else

Follow Sugar Bear Hair and how they did it.

It’s just hair vitamins…

How does that company have 2.6m followers?

You need to do it like them.

Do it pro from the get go. Amateur execution is amateur money. It will fail if you just setup a Shopify page and run some stupid cold ads.

 

[sarah_ana]

Follow Sugar Bear Hair and how they did it.

It’s just hair vitamins…

How does that company have 2.6m followers?

You need to do it like them.

Do it pro from the get go. Amateur execution is amateur money. It will fail if you just setup a Shopify page and run some stupid cold ads.

Thank you very much , I’ve never heard of them , I’ll definitely check them out .
From my previous history I know that execution is a big weak point of mine currently, one that I need to improve. I don’t even know how to make ads .

Ive been reading through @NeoDialectics thread “Idea generation To Execution step by step guide “ . And I think perhaps the next best course of action is to complete the research , create a few products in house (literally from my house ) post them on Amazon/ Etsy and see if they sell and by doing so I’ll be able to validate if there even is a need .

I just hope that the fact that I don’t really know ads / copy won’t stop me from even getting eyes on my product listings

 

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[Johnny boy]

I just hope that the fact that I don’t really know ads / copy won’t stop me from even getting eyes on my product listings

It will. This will be a nice slap in the face that either forces you to improve or weeds out quitters.

 

[Saad Khan]

I will be able to find/ curate herbal tea combinations to help with said issues
- I will be able to find an organic herbs manufacturer to help with creating the teas
- women would be open to paying for teas on a subscription-based model
- I can make my tea brand different enough to stand out in an incredibly crowded market without having to sacrifice my profit margins

Test all these hypothesis and take action on them. You know the next steps. Do it.

@Johnny boy said it better. The amount of work you're willing to put in the brand will determine your brand's future.

 

[StrikingViper69]

How are you going to test the idea? Are you going to run a proper scientific test to prove its beneficial, or are you looking to hoodwink a bunch of women with expensive tea?

It will fail if you just setup a Shopify page and run some stupid cold ads.

That's literally what I'm doing at the moment...

... and it's working.

 

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[Johnny boy]

How are you going to test the idea? Are you going to run a proper scientific test to prove its beneficial, or are you looking to hoodwink a bunch of women with expensive tea?


That's literally what I'm doing at the moment...

... and it's working.

well then I'm wrong and dumb. Good job. Is something about your product unique or created/manufactured by you or is it some simple dropshipping thing? I assume running cold ads to a shopify page would only work in 2023 if you are creating the product/service and have the margins to support cold advertising costs.

 

[StrikingViper69]

well then I'm wrong and dumb. Good job. Is something about your product unique or created/manufactured by you or is it some simple dropshipping thing? I assume running cold ads to a shopify page would only work in 2023 if you are creating the product/service and have the margins to support cold advertising costs.

It's a book I wrote on guitar practice. It has a bit of a unique angle and it actually helps people. It's 50% having a good product and 50% I lucked out when setting up the audience on my ads. It goes to show that if you have the right thing infront of the right people, you don't need anything too fancy to sell it. Running Facebook ads is actually cheaper per sale than having it sell organically on Amazon

But you're totally right, doing that with herbal tea is going to be pretty difficult. But if it really does solve the problems mentioned above, and the audience is right, it might not take a team of photographers and editors running a content grind to get it to sell. At the very least, Facebook and shopify is a cheap way to test the concept and get some market feedback.

 

[Johnny boy]

It's a book I wrote on guitar practice. It has a bit of a unique angle and it actually helps people. It's 50% having a good product and 50% I lucked out when setting up the audience on my ads. It goes to show that if you have the right thing infront of the right people, you don't need anything too fancy to sell it. Running Facebook ads is actually cheaper per sale than having it sell organically on Amazon

But you're totally right, doing that with herbal tea is going to be pretty difficult. But if it really does solve the problems mentioned above, and the audience is right, it might not take a team of photographers and editors running a content grind to get it to sell. At the very least, Facebook and shopify is a cheap way to test the concept and get some market feedback.

You’re running cold fb ads to a guitar practice book?

How tf is that converting profitably?

Retargeting maybe, but cold ads?…

 

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[monnffffiiiiiii]

Go niche.

You have different ways to do so:

• Only offer some very specific types of tea that you can't find anything else.
• Only offer tea from a very specific place (Eg: The Specialist of Japanese Organic Tea!)
• Offer tea in another form (pills)
• Create a new brand
• Go premium if everyone rivals on price and sell cheap if everyone is premium

And if this doesn't work, change products.

You can sell essential oil, oil from leaves, oil from plant buds, etc.

One way to find good products is to visit all of the tea shops in your city and ask the employees what sells the most.

If Liquid Death can sell water and Bang energy drinks, you can probably sell tea!

Overcrowdedness doesn't matter, just do something radically different (read the book Different by Youngme Moon).

Eg: I am sure that one or two studies pretend that tea increases IQ, beauty, dental health, etc

but I have yet to find a brand that is creates teas around treating symptoms of PMS on a subscription model .

Bingo. Now, make sure that whatever you sell actually works, otherwise, you'll have disappointed customers.

 

[StrikingViper69]

You’re running cold fb ads to a guitar practice book?

How tf is that converting profitably?

Retargeting maybe, but cold ads?…

It's a good book

I'd be lying if I said I "knew" why. I suspect the guitar market is sick of over priced courses on "Learn how to be the worlds greatest player in 7 weeks!" for a mere $197/$297.

Then there's my book at a price that you don't have to think about, the book is helpful and I don't make retarded claims. There's also a few big pain points the book solves, which no-one else solves.

I did try retargeting and found it to be useless, it was way too expensive. People either buy or don't with this product.

 

[sarah_ana]

How are you going to test the idea? Are you going to run a proper scientific test to prove its beneficial, or are you looking to hoodwink a bunch of women with expensive tea?


That's literally what I'm doing at the moment...

... and it's working.

Well, I guess this would be a good time to provide an update :

I went down a rabbit hole of research and stumbled upon a specific combination of medicinal herbs women online have spoken about how effective it has been for them and then I looked through a bunch of studies on this specific combination.

I thought perfect there's my formula but turns out that in Uk such herbal remedies neeeds to be registered as 'Traditional Medicines' (which costs a whole lot and requires 30 years of proof of use in the Uk and a whole bunch of other documents) and any herb that is seen as a medicine primarily will mean that you need this registration.

So I'm going to have to only focus on herbs which in the Uk are seen primarily as foods, do another deep dive through some research papers, to figure out dosages, etc. Then seeing as the issue I want to focus on for this test affects me, I'm going to have to use myself as the guinea pig. Which annoyingly will mean that it may take a while to get my test product out but at least even if the market doesn't want it.
I would've found a product that actually provides a solution to my own problem.

And besides once I do figure out something that works, it would make for a really great brand story.

One way to find good products is to visit all of the tea shops in your city and ask the employees what sells the most.

ooo I hadn't thought of that thank you !!!
Yes providing the formula in other forms seems like a great idea

 

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[StrikingViper69]

Well, I guess this would be a good time to provide an update :

I went down a rabbit hole of research and stumbled upon a specific combination of medicinal herbs women online have spoken about how effective it has been for them and then I looked through a bunch of studies on this specific combination.

I thought perfect there's my formula but turns out that in Uk such herbal remedies neeeds to be registered as 'Traditional Medicines' (which costs a whole lot and requires 30 years of proof of use in the Uk and a whole bunch of other documents) and any herb that is seen as a medicine primarily will mean that you need this registration.

So I'm going to have to only focus on herbs which in the Uk are seen primarily as foods, do another deep dive through some research papers, to figure out dosages, etc. Then seeing as the issue I want to focus on for this test affects me, I'm going to have to use myself as the guinea pig. Which annoyingly will mean that it may take a while to get my test product out but at least even if the market doesn't want it.
I would've found a product that actually provides a solution to my own problem.

And besides once I do figure out something that works, it would make for a really great brand story.



ooo I hadn't thought of that thank you !!!
Yes providing the formula in other forms seems like a great idea

Using yourself as a guinea pig is a start, but that's not a test.

Are the studies you looked at proper peer reviewed studies?

Are there legal consequences to making claims of a medical nature without having proper clinical trials to back them up?

 

[sarah_ana]

Using yourself as a guinea pig is a start, but that's not a test.

Are the studies you looked at proper peer reviewed studies?

Are there legal consequences to making claims of a medical nature without having proper clinical trials to back them up?

Oh no I’m using myself to test the formula before I use that formula, to test the market .

And I have focused on and will be mostly focusing on systematic reviews from medical journals/ online publications that require that peer reviewed process to even be published.

Pretty sure they are but I’ll just have to keep that in mind when it comes to labelling of the product and copy .

 

[monnffffiiiiiii]

With your dedication, it's hard to see how you will not succeed.

Good luck! Will be following

 

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[Andy Black]

Cold ads can work or at least help.

Google Ads can get you data about how many people are searching, and for what. Ideally it brings sales.

Check out @Lex DeVille 's thread:

GOLD! - EXECUTION - How to Create a $2k+/mo Passive Income Website in 30 Days (or Less)

In November, I launched a digital product. In under 30 days, I generated over $2,000 in sales. Four months later, the site had its first $2,000 week... I've been documenting this progress in my INSIDERS's thread here. Now, I'm going to show you how to do it. Here are some things to know...

www.thefastlaneforum.com

Before running cold ads though I'd be looking for Facebook groups of people who'd love your tea.

 

[sarah_ana]

So update:
I've changed the form of the product it'll longer be teas instead it'll be in a different form (which is what @monnffffiiiiiii suggested, thanks!) .so since then I decided to work with a freelance formulation chemist who specialises in herbal products to help me develop the formula because, for a few weeks, I really struggled to develop it myself as I'm no longer creating teas which are pretty simple to create nor am I creating supplements which I could've easily done without the help .

Of course, working with a formulation chemist who isn't based in the UK has been quite annoying and I'm still waiting for them to produce a formula for me and give me all the additional details I need such as shelf life, dosage, etc.

I really would like to be able to have the product created by September as there is this women's 2-day conference that a relative of mine is hosting and I've been offered a free stall and that event would be the perfect place to test out the market fit for my product and gauge what my target audience think of it .

So currently I'm not really sure what to do as I am waiting. I technically don't have a logo or domain for this business so maybe I'll focus on getting those done and developing the brand story and I guess brand persona ?

But I'm not too sure what my next steps should be If I am, to be honest.

 

[The-J]

But I'm not too sure what my next steps should be If I am, to be honest.

Ask retailers that sell herbal tea at scale what they're looking for then plan toward that.

The right product in this space could be huge. Herbal tea has a very large total addressable market.

A client of mine sells herbal skincare which has big margins so cold ads DTC can work profitably at scale. But our AOV is ~$130 w/ a high LTV. Is herbal tea this way? Or does herbal tea sell better through retail?

Also if you find the right brand partner, they may be willing to take control of the marketing bit (aka you don't have to pay for marketing spend). Usually a good brand partner is a brand that is not currently in this space but their customers buy herbal tea. The right brand partner can also open doors that would otherwise be closed to you.

Cobranding could also be a great way to get immediate access to customers & get a true gauge of how well your product does in the marketplace.

If you're going to do DTC we've found that "premium solution to a common problem" works well as a marketing angle. But again our average customer spends $130 per order and we're in a space where it's really common for people to spend a lot. We spend a lot on customer acq. but since our margins are so high and almost 40% of sales comes from repeat customers, it makes sense as a growth model (at least in the short-medium term, since ad costs rise quickly)



In this image I searched "herbal tea" on Amazon.com (US site). Lots of pretty low price points. But one that's $68. What are they doing that people are spending that? And look at the other price points, they're selling at scale. You can tell by no. of reviews.

At $20 or $30 a sale it's hard to support paid advertising. Not impossible, especially if the people buy again and again. But you'd have to prove that last bit before it makes sense to scale up.

I might be looking at the wrong form factor. Maybe liquid beverages make more money, or maybe you're selling a "supplement powder" which can justify bigger price points and big media budgets on DTC

Retail can move such big volumes & get so many eyeballs that they can sell at $4-5/unit and make a profit. But you'd have to have a reason for them to stock your product.

It is definitely not too late to start an herbal tea brand.

 

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[monnffffiiiiiii]

So update:
I've changed the form of the product it'll longer be teas instead it'll be in a different form (which is what @monnffffiiiiiii suggested, thanks!) .so since then I decided to work with a freelance formulation chemist who specialises in herbal products to help me develop the formula because, for a few weeks, I really struggled to develop it myself as I'm no longer creating teas which are pretty simple to create nor am I creating supplements which I could've easily done without the help .

Of course, working with a formulation chemist who isn't based in the UK has been quite annoying and I'm still waiting for them to produce a formula for me and give me all the additional details I need such as shelf life, dosage, etc.

I really would like to be able to have the product created by September as there is this women's 2-day conference that a relative of mine is hosting and I've been offered a free stall and that event would be the perfect place to test out the market fit for my product and gauge what my target audience think of it .

So currently I'm not really sure what to do as I am waiting. I technically don't have a logo or domain for this business so maybe I'll focus on getting those done and developing the brand story and I guess brand persona ?

But I'm not too sure what my next steps should be If I am, to be honest.

Did you test demand? I would do that. You can test demand for free by creating content and see if people are interested in it.

 

[sarah_ana]

Did you test demand? I would do that. You can test demand for free by creating content and see if people are interested in it.

No, I haven't wouldn't really know what type of content to make to even test that because people may engage with the content but that doesn't necessarily mean they'll buy the product.

 

[sarah_ana]

Ask retailers that sell herbal tea at scale what they're looking for then plan toward that.

The right product in this space could be huge. Herbal tea has a very large total addressable market.

A client of mine sells herbal skincare which has big margins so cold ads DTC can work profitably at scale. But our AOV is ~$130 w/ a high LTV. Is herbal tea this way? Or does herbal tea sell better through retail?

Also if you find the right brand partner, they may be willing to take control of the marketing bit (aka you don't have to pay for marketing spend). Usually a good brand partner is a brand that is not currently in this space but their customers buy herbal tea. The right brand partner can also open doors that would otherwise be closed to you.

Cobranding could also be a great way to get immediate access to customers & get a true gauge of how well your product does in the marketplace.

If you're going to do DTC we've found that "premium solution to a common problem" works well as a marketing angle. But again our average customer spends $130 per order and we're in a space where it's really common for people to spend a lot. We spend a lot on customer acq. but since our margins are so high and almost 40% of sales comes from repeat customers, it makes sense as a growth model (at least in the short-medium term, since ad costs rise quickly)


View attachment 50615
In this image I searched "herbal tea" on Amazon.com (US site). Lots of pretty low price points. But one that's $68. What are they doing that people are spending that? And look at the other price points, they're selling at scale. You can tell by no. of reviews.

At $20 or $30 a sale it's hard to support paid advertising. Not impossible, especially if the people buy again and again. But you'd have to prove that last bit before it makes sense to scale up.

I might be looking at the wrong form factor. Maybe liquid beverages make more money, or maybe you're selling a "supplement powder" which can justify bigger price points and big media budgets on DTC

Retail can move such big volumes & get so many eyeballs that they can sell at $4-5/unit and make a profit. But you'd have to have a reason for them to stock your product.

It is definitely not too late to start an herbal tea brand.

thank you very much for such an in-depth answer.

A client of mine sells herbal skincare which has big margins so cold ads DTC can work profitably at scale. But our AOV is ~$130 w/ a high LTV. Is herbal tea this way? Or does herbal tea sell better through retail?

I have no idea what AOV ( average order volume ? ) means or LTV. And to be honest I'm not sure. But I do know that herbal products are definitely on the rise and people are buying them.

 

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[monnffffiiiiiii]

No, I haven't wouldn't really know what type of content to make to even test that because people may engage with the content but that doesn't necessarily mean they'll buy the product.

Write about the problems your product solves. I have sold a bunch of digital products based on articles I had written. But dont write articles - nobody reads anymore - make vids instead.

An audience doesnt mean they will buy, but it is still better than no audience at all.

 

[The-J]

I have no idea what AOV ( average order volume ? ) means or LTV. And to be honest I'm not sure. But I do know that herbal products are definitely on the rise and people are buying them.

AOV = average order value

LTV = lifetime value (you'll figure out this number after being in business for a little while)

 

[ZackerySprague]

This is a marketing business above all else

Follow Sugar Bear Hair and how they did it.

It’s just hair vitamins…

How does that company have 2.6m followers?

You need to do it like them.

Do it pro from the get go. Amateur execution is amateur money. It will fail if you just setup a Shopify page and run some stupid cold ads.

Having an Instagram page like most definitely must a great asset. That's insane. Cool find! Thanks Johnny!

Instagram: 2.6m followers
Facebook: 1.5m followers

Looks like they started something in January 2023 to start traffic. 19,000 visitors last month according to similar web.

 

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