Jeff Vojta 00:03
The real power to analyze all that sales data comes once we take what we know about the industry, the customers, and the trends, and figure out how to program that into these automated models. That's what we're learning now — does the app send it out, does the CRM send it out?
Narrator 00:21
Welcome to the Ecomm Show podcast. I am your host Andrew Maff, owner and founder of Bluetuskr. From groundbreaking industry updates to success stories and strategies, get to know the ins and outs of the e-commerce industry from top leaders in the space. Let's get into it!
Andrew Maff 00:36
Hello, everyone. Welcome to another episode of the Ecomm Show. As usual, I'm your host Andrew Maff, and today I'm joined by the amazing Jeff Vojta, who is the CEO over at Dilworth Coffee. Jeff, how are you doing, buddy? Ready for a good show?
Jeff Vojta 00:47
Doing pretty good this morning. Hope you are.
Andrew Maff 00:51
Yeah, appreciate you coming on the show. I'm super excited to have this conversation with you. In this household, we're big coffee fans — my wife especially. I've flown to places just to try coffee in certain areas at this point.
Jeff Vojta 01:03
That's awesome.
Andrew Maff 01:04
But I also find this space very, very challenging. So when I get the opportunity to speak with someone like yourself who's actually been successful at it, it's always interesting. I like to start these off pretty typically and just give you the floor — tell us a little about your background, how you got started with Dilworth, and we'll take it from there.
Jeff Vojta 01:23
Sure. Yeah, I'm a CPA by training. I worked at a Big Four accounting firm as a senior manager, wanted a career change, so I started a coffee shop back in the '90s. We expanded to a couple of retail locations, but coffee was nearly non-existent back then — it was mostly convenience-store coffee, something most people were only familiar with through Starbucks, which had maybe 400 locations at the time. So we were pioneers, trying to figure out what people wanted and how to deliver it. We started roasting coffee out of our retail locations, then sold off the retail side and concentrated solely on wholesale. Our business grew around what our customers needed to make individually crafted drinks to order, and we built that around sourcing great coffee. So we migrated from the traditional boots-on-the-ground, knock-on-doors sales approach — the good old days of trade shows and traditional advertising — and pivoted more toward a digital-first e-commerce brand. We started that process in 2020-21, and the pandemic accelerated those efforts.
Andrew Maff 02:38
Yeah, oh yeah. So one of the things I have to ask — I obviously have a marketing brain, so I tend to go to the marketing side first — with coffee, if I had to pick five of the most competitive spaces, coffee would definitely be up there. Differentiating is a nightmare. How have you been able to get it out there and find the audience that's more aligned with what you do?
Jeff Vojta 03:11
Yeah, it is very tough. Most of our business — I'd say 95% — is what we call B2B. We sell coffee and related products to coffee shops so they can make their drinks. We do have a direct-to-consumer website, but that's only about 5% of sales. Like you mentioned, coffee is hyper-competitive — everybody's got something out there trying to be the next greatest thing. Working with our marketing agency, we came together around the idea that, as we grew, people's coffee preferences changed over time, so we just try to offer a great cup of coffee across a variety of options. We're organic certified, we're kosher certified, we do naturals, but we also do flavored coffees and a variety of package sizes and other products. It's all about helping people make their own individual drink, and I think that everyone-approach — I call them affordable, approachable coffees — has helped us stand out. Everybody wants the neatest, greatest micro-lots, but I've found it's tough to make money there. The bread and butter — the espresso blends, the house blends — is what really moves, and our expertise in helping customers sell more of those to their consumers is what's allowed us to stand out. B2B is definitely more complicated than direct-to-consumer when it comes to reaching customers, but we want repeat sales, and most of our customers order about two and a half times a month.
Andrew Maff 04:45
Yeah, the B2B side — even though it's still B2B e-commerce — they're still buying product from you, so the process itself isn't hugely different. With D2C, obviously there's a lot more social media and influencer activity involved, especially with coffee. B2B, I'd say, can actually be harder because they're busy, and chances are once they find a coffee that works well in their shop, they're set. So is it more of a marketing initiative, or is it really more traditional sales that's helping you find these retail establishments?
Jeff Vojta 05:24
A little bit of all of that. Starting around 2018, we tried to do more direct sales, but shop owners are busy — hard to get appointments, they don't really want to talk. And there are a lot of coffee shops, but they're spread out all over, so how do you reach them? More importantly, we want to reach them at the startup phase, because when people are still envisioning their idea or concept, they don't have a place to go visit — the internet is perfect for that. So building a more robust website, with a lot more content and pillar pages for SEO, and now the AI/AIO-type stuff, has been key to driving traffic to the site. We also employed search engine marketing to go even further, since our customers are scattered all over, mostly the East Coast. What we've found is that the buyer — the shop owner or manager — starts searching when they have a need: "I don't like my current coffee roaster, I need to do something different," or "I need a new piece of equipment," or "my normal supplier is out of something." So we want to appear when they search for that, and then our service and attention have to win them back for repeat business. We have that cycle, or funnel, to get them to their first order, and then we nurture them through the next three to five orders. Hopefully by then we've got them on a repeat cycle.
Andrew Maff 06:58
Yeah, interesting. So do they set up something like a subscription, or is it more just staying in touch with them until they need to reorder?
Jeff Vojta 07:07
It's more staying in touch when they need to order, and trying to offer different services, because their business volumes fluctuate so much. Subscriptions have been really tough on that front — one week they might need 100 pounds of coffee and a couple of cases of this, and the next week they need 50. And freshness matters — even a small coffee shop doesn't have a ton of storage space. So we've tried to build it around ordering as you need it, and it shows up in a day or two.
Andrew Maff 07:35
Yeah, you know, even with brands that are more DTC and want to move into B2B, it's a whole different mindset for them — figuring out how to go after that. So to your point, it's great to reach coffee shops when they're first opening, because they may not have made a decision yet. Figuring out whether existing shops are thinking about switching is obviously a little harder. But when you're trying to find people who are potentially opening up new shops, has that come from direct approaches, or more from SEO initiatives, where they're finding you that way?
Jeff Vojta 08:13
I'd say probably 60% of the leads are SEO-type traffic coming to the website — people searching for help opening their shop. The other big part is referrals: current customers, industry partners, people who know people. Someone's heard about us, gotten a lead from somewhere, and been told, "okay, this group can help you plan your shop, get the equipment in there," and everything else you need to get open. So in our business, the B2B referral from trusted sources is key.
Andrew Maff 08:44
Yeah, that makes sense. Referrals, partners, past customers — those are always going to be fantastic. Do you do anything with advertising initiatives, like gated content — something like "X things you need to know to open a coffee shop"?
Jeff Vojta 09:00
We put a lot of free stuff out there. We've tried to figure out gated content or a subscription model, short videos, how-tos, and we've toyed with some subscription ideas. But we're a small team — 15 people total in the company — so initiatives like that tend to be a "sounds good, we'll get to it" kind of thing. Right now we're trying to transfer all the collective knowledge people have in their heads into some kind of content we can actually use. We're trying to shoot a lot more video, capture it, and figure out how to package the snippets. Honestly, it's a great idea, and making it easy for people to access would help, but it's a bigger challenge than it sounds.
Narrator 09:45
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Andrew Maff 10:17
Yeah, it's obviously a longer sales cycle in some scenarios, too. Let's talk about the operational side for a second — 3PL or your own warehouse? What's your fulfillment setup?
Jeff Vojta 10:30
We have one warehouse — we do it all here. We do the coffee roasting and production, so we're manufacturing, and we're also a distributor of syrups, flavorings, and a lot of other stuff, so it all comes in here. Orders come in, and we have a fairly quick lead time for B2B — we usually process within one to two business days, with a one-to-two-day transit time. We ship out through different carriers, and it's all about that supply chain cycle. If you've spent time around any restaurant, you'll see big trucks going around delivering things, same with grocery stores — it's that same high-frequency, high-touch model.
Andrew Maff 11:13
Yeah, oh yeah. Owning that whole supply chain is obviously a lot better for the margin. So how does that work? Since B2B customers are purchasing from you in bulk, they're expecting to not pay full retail, which affects your margin, so you have to make it up in volume. Coffee itself isn't heavy, but when they order a good amount, it can add up in weight, so freight costs go up. Tell me a little about how you handle that — you're the CPA, so this is probably your wheelhouse. How do you map out margins versus freight and shipping distances and all that?
Jeff Vojta 11:52
We have a couple of different programs, and we're constantly working on this. As weights and things change, we negotiate with carriers around what we call an optimal box size — we want to stay within, say, 30 to 49 pounds. We don't want to go over, because then the rates shoot up, so we try to maintain that. For heavier orders, as weights go up, carriers offer discounts for multiple boxes going to one location. You can imagine a coffee shop having 10 to 20 packages that weigh 200 or 300 pounds, and then we have customers who order by the pallet, so we have trucks come in and use LTL carriers. Margins on the wholesale side are thin, and they have to be, just for everything to work. Freight can be 10 to 15% of the sales cost, so we try to offer programs because we know it's expensive for everybody — order bigger and we have free freight options starting at $850 up to $2,000 to ship across the country, plus some freight subscription models for people who order more frequently, which caps their freight expense for the month. We run margin analysis, check it periodically, and negotiate with FedEx and UPS to make sure we've got competitive rates, and study the current models. It's amazing — my business partners are engineers by training, so they're the ones figuring out the weights and the boxes, how we can pack things efficiently, and then coding all of that to help calculate it on the back end.
Andrew Maff 13:27
Yeah, you must have an operational dream team between you being a CPA and engineers in the background — that's got to be fantastic.
Jeff Vojta 13:37
It's good in many ways. Sometimes we get too lost in the details, and we have to step back and average it out — okay, on certain things we're going to make it — and then figure out the velocity of inventory items and keep them moving.
Andrew Maff 13:51
Yeah.
Jeff Vojta 13:52
And that's what we're trying to figure out — how to compete with everyone else out there on the internet, since they're constantly innovating. So we're trying to do the same, test it, and roll it out as fast as we can. But, you know, I look at—
Andrew Maff 14:04
Analysis paralysis.
Jeff Vojta 14:06
Yeah, big companies have a 100-person group doing all of that, and we've got three.
Andrew Maff 14:13
Yeah, does it make— I guess it's got to make it a little easier since you're manufacturing, right? Since you have more control over that, it makes your margins a bit easier to work with, as opposed to not manufacturing, where I'd assume margins get even worse.
Jeff Vojta 14:27
Yeah, I'd say for items we manufacture, the margins are probably double, which we love, but we also have a lot of overhead and capex to do that. It's fixed over a given operating range. The other items are great too, because any coffee shop that's in business — I'd say 80% of them — probably needs something we sell. So they're going to be searching for it at some point, and hopefully we can get them onto the coffee side and improve the overall economics of the order.
Andrew Maff 15:01
Yeah, makes sense. What's the growth plan? How do you speed things up — is that the goal right now?
Jeff Vojta 15:10
Yes. We moved from a closed portal — where you had to sign up, register an account, and go see pricing — to more of an open catalog that's out there for everybody to see, which is where some of the industry leaders are. Now we want to grow and go after different-size companies — people ordering $100 versus $5,000 on an order — and they all need different things. So we're trying out new programs and options, being much more attuned to pricing and SKU velocity, and making more frequent adjustments to push it through the search engines and help people optimize their orders. We feel like we've done a lot of testing and we're ready — we're getting ready to add coffee equipment, coffee makers, and espresso machines to the website, which we think will be critical.
Andrew Maff 16:07
There you go.
Jeff Vojta 16:08
These are high-ticket items — anywhere from $1,000 to $15,000-$20,000.
Andrew Maff 16:15
Those things are not cheap.
Jeff Vojta 16:16
It's the sales cycle, the information you have to provide, the after-sale process of guiding the customer and making sure the equipment shows up, as well as the fraud factor — we want to make sure we get paid for that. In terms of growth, we feel like this could really accelerate things. It's important to get those startup coffee shops early so we can migrate them into the regular ordering cycle. It's that razor-and-razor-blade concept.
Andrew Maff 16:45
Yeah, those are obviously significantly higher-ticket items. Is the thought process that you're going to bring those in and house them in your warehouse, or are you doing more of a drop-shipping model?
Jeff Vojta 16:57
Most of them will probably be drop-shipped. There are so many different options that people want, and programming all of that on the website is tough. But we'd also love for people to call up and talk to one of our coffee shop experts — do you really need that $2,000 option, or do you need this instead? And there are other services, too, for new construction and things like that, since we've got people who've actually made the drinks and can bring that expertise. Our goal is for them to have the right equipment to be successful and make money, so we lean into that service and consulting aspect to help put together the right package. I think that lets us be more competitive than just selling and stocking equipment. Sometimes people need it right away because their machine is down, and that's just tough — you need warranties and things, and we want them to have the best option, so you're rarely going to find something that ships immediately anywhere in this industry.
Andrew Maff 18:03
Oh yeah, I'm a huge fan of that model. I'm always telling brands, especially the ones getting into B2B, that it's not always about the product you're selling — it's also about the convenience you provide. Especially in your scenario: it's coffee. Someone who wants to buy coffee could just go to Amazon and get it there — granted, bulk is a little different. But if you become the place to go for coffee shop needs outside of just the coffee itself, it becomes "that's just where I go to get everything," and maybe they have a rep there too. So drop shipping automatically opens up your offering and attracts a lot of people. Then you figure out what works well, and if certain drop-shipped products seem to be customer favorites, maybe you private-label your own version and make it yourself, and just pay out the original supplier. So it's a very interesting learning process to be able to do that kind of thing, too, right?
Jeff Vojta 19:02
Exactly. We've talked about the ideas — can we add value, and how do we do that? As we try to build out the model, we're looking at different 3PL warehouses to help with some of the distribution. But we also love how high-touch our packaging and service are, because our customers need these things to make their drinks and get their sales. We feel very strongly about being dependable — we don't want customers left waiting because a package isn't there. So as we look to grow and expand, the question is how we maintain that high-touch approach and stay a dependable partner to coffee shops everywhere.
Andrew Maff 19:43
Yeah, completely. One of the things I always like to ask — because on these episodes, someone always comes on and it's, "yeah, my business is awesome, here's what we're doing, everything's great." Let's be honest, there's always something, especially for business owners. What's keeping you up right now? What's eating at you?
Jeff Vojta 20:04
Just how to bring all of these things together in the e-commerce realm. I'm a 30-some-year accountant — I grew up in this business, knocking on doors, selling face to face — and now I'm trying to figure out all these various tools, Google Analytics, and what this stuff is telling us. What are the shopping cart features, the platform, the apps telling us? Do we hire somebody, do we find a team member? We can see these things working, but how do we accelerate it? All of this sounds easy — just post it on the web — but thinking through the complete operational side end-to-end is complex. It's like, "I'd love to bring in that product line — can I keep it in stock? Do I have enough SKUs and depth on it? Is the manufacturer dependable? What's the minimum order?" And then there's getting it all added, plus the marketing. It's all these little things, and I don't have a 100-person team with that depth of experience. So we're doing a lot of teaching ourselves, and figuring out how to blend that into a CRM system and other apps. I look at it and get overwhelmed by how everything's interrelated, and the intricacies — so it's, okay, let's step back, pick one thing, and move forward.
Andrew Maff 21:25
It's a big benefit of digital marketing and e-commerce in general, being able to have all that data on every little thing. But it's also an absolute nightmare, because you've got so much data — I don't even really know how much of it is actually relevant. Sometimes it's just vanity metrics that nobody really needs. Very interesting — totally makes sense. Are you leveraging AI or anything like that internally to help evaluate some of that stuff?
Jeff Vojta 21:58
We've been using AI a lot to help generate and write content, clean up images, and things like that — on the SEO side, to make sure we've got the right tags and keywords. That's been a huge help; it's allowed us to do a lot of that ourselves. We used to pay consultants and get maybe three blog articles indexed a month. Now we're turning out three or four a week, and AI has been wonderful for that, as well as for researching and verifying content. We're now trying to use the tools more to build in automations around customer order size, frequency patterns, and changes, and to target more specific offers and communications directly to them. The real power in analyzing all that sales data comes once we take what we know about the industry, the customers, and the trends, and figure out how to program that into these automated models. That's what we're learning now — does the app send it out, does the CRM send it out?
Andrew Maff 23:03
Yeah, no, it'll probably definitely help with some of the stuff you called out, but it's also another one of those where there's just so much information. You could ask it anything — once you start feeding it all in, it's like, "what do you want to know?" And you're like, I don't even know at this point.
Jeff Vojta 23:19
Well, that's the thing — it shows up, and I'm like, "that's kind of great, and interesting, but is it a BS answer, or is it actually meaningful?" Other times I look at it and think, "yeah, this makes no sense — I must have fed the parameters in wrong." But I've got to figure out how to get it to produce better answers, and to call it out when it's not right.
Andrew Maff 23:42
Yeah, it's definitely not perfect yet. Definitely not perfect.
Jeff Vojta 23:45
Yeah, I need a few more hours in the day to dig into it more.
Andrew Maff 23:49
Yeah, you and me both. Jeff, this was great — I really appreciate your time. I don't want to take up too much more of it; I know you're super busy. I'd love to give you the floor — tell everyone where they can find out more about you, and of course, more about Dilworth Coffee.
Jeff Vojta 24:02
Definitely — the easiest place to go is DilworthCoffee.com, D-I-L-W-O-R-T-H Coffee. Our B2B site, which is really where most of the action is, you can get a link from there, or just go to pro.dilworthcoffee.com. Anything you'd need for your coffee business, you should be able to find there.
Andrew Maff 24:21
You're the man, thank you, sir — appreciate it, Jeff, and thank you so much for your time. Everyone who tuned in, thank you as well. Please make sure you do the usual thing: rate, review, subscribe, all that fun stuff, on whichever podcast platform you prefer, or head over to TheEcommShow.com to check out all of our previous episodes. As usual, thank you all for joining us, and we'll see you all next time. Have a good one.
Narrator 24:41
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