Lindsay Penner is the Head of Business Development at Eight Ounce Coffee. Eight Ounce is a specialty coffee equipment distributor based in Calgary, Alberta. The company was started in 2011 by Jennifer and Wesley Farnell and has become the biggest specialty coffee equipment distributor in Canada.
During 2020 and 2021, sales for Eight Ounce’s equipment skyrocketed as customers brought their love for coffee into their homes. Their retail business jumped from 10% to 30% of sales as customers started buying directly from them. At this time, they also started their coffee partner program which leveraged their already established e-commerce channels to provide an additional revenue stream for roasters during café closures. While the program was established to support customers during the downturn of the pandemic, it has grown to be a large part of the business today.
Even with their retail growth, B2B relationships continue to drive the majority of Eight Ounce’s business today. Eight Ounce is partnered with Canadian retailer Indigo on Convictional.
How did you get started drop shipping with Indigo on Convictional?
We were drop shipping with Indigo for about 2-3 years before coming on to Convictional. We were using another platform, SPS Commerce, to do so.
Indigo wanted to expand their product offerings with us, but when I took a look at the data, the amount of time and effort we were spending to process orders through SPS made our dropship economics unsustainable for both parties.
Around the same time, Indigo was migrating their dropship operations to Convictional. They asked us to try it out and we decided to give it a shot. Getting our products uploaded and systems linked through our Shopify to Convictional was pretty easy. We got our first order through Convictional the day we got set up. It was funny — we were testing orders with a few trial products to make sure everything was working and our warehouse team said that they got a real order!
What’s the biggest benefit of dropship for your business?
Dropship broadens our reach. People associate us with coffee because it’s not just in our name, but how we started and grew as a company. But, we carry a whole bunch of products that go beyond that. We’re looking to grow and expand into more areas like the hotel and restaurant industry, and boutique homeware stores, and we have a ton of brands that have these amazingly beautiful products that would be a great fit for them. We want to showcase these products where people are looking for them.
Could you share why your previous dropship solution fell short for you and how Convictional solved those challenges?
With SPS, we had to log in daily to upload our inventory data. Because we’re not exclusively dropshipping — we do wholesale and retail as well — inventory is fluctuating by the second. So not having inventory data synced live just caused so many more issues.
I remember one time specifically when Indigo had a sitewide sale that covered some of our products. We had sent our inventory in, but there was no stop in the system to prevent overselling based on the large quantity of orders that suddenly came through due to the sale. They sold the 10 that we had available and there were 190 additional orders that we had to manually go through and cancel. There was no fast and easy way to get everything done and cancel it.
So having inventory synced live is huge for us. I probably log in to Convictional once a month. I really don’t access it that much because there isn’t really a need for me to be in there which is amazing!
Is there a successful retail partnership story you can share?
We were carrying to-go tumblers and mugs from Huskee and Sttoke on our website that weren’t getting as much visibility as I thought they needed. I felt like they were really in line with the aesthetics, the feel, and the look that Indigo has in the brands they carry.
Indigo was hesitant to carry them; sales for to-go tumblers plummeted through the pandemic because people were concerned about the safety of reusables before we had more information about what was really going on. Obviously things have opened up again and people aren’t afraid to use them anymore. Indigo decided to give it a shot and those brands performed really well for us over the holidays.
Our order volume has substantially increased ever since we moved to Convictional. In a single year, we did 30% more orders through Convictional than we did on SPS in two years. For one of our best selling SKUs, coffee filters, we sold 440 units in two years on SPS. On Convictional, we sold almost 700 units of this SKU in one year.
What tips can you share for brands who are just getting started with dropship?
Having numbers in mind is really important. Different companies have different requirements, for example, who pays for shipping in the relationship. It’s really important to have those numbers and decide what makes sense for your business.
That’s sort of what happened before with SPS. We were so keen on getting products launched, but we didn’t fully understand the time and other costs that were involved before launching.
When you have clarity on your numbers, you’ll be better positioned to negotiate with your partners — saying what works for you and what doesn’t work for you. If you’re going to be successful, you have to ask those questions.
Could you share what you’re excited about for 2023?
I’m really excited to see Eight Ounce expand into more homeware products. We just brought on a Canadian homeware brand called Fable recently, which is a brand I was super excited for us to work with. There are more homeware brands we’re bringing on that I can’t share yet, so stay tuned for those.
Thanks to Lindsay for participating in this conversation!
This post was originally published in our weekly newsletter The Assortment. Subscribe on Linkedin to get the latest customer stories, retailer recommendations, and Convictional product updates.