July Financial Update
The first month of Koffiyeh has come to a close! As work continues to grow Koffiyeh the finances are becoming more involved and complex. We aim to give you a comprehensive breakdown of how the business is performing, and what our plans are to improve finances in the coming months.
Revenue and Sales Performance
July was our launch month and majority of the sales came from friends and family, and word of mouth from said friends and families. We totaled $408.50 in sales revenue. These are direct to consumer sales. We do have plans on expanding these sales through different channels, such as partnerships, and wholesale programs.
Breakdown of Expenses
Running an online store comes with its set of operational costs. Here’s how our expenses were allocated in July:
Contracting Costs: $1063.34 was spent on contractors who continue to help design and update the website. We’ve retained our Palestinian contractor who has and will continue to support us with their design work. For Koffiyeh this is a more than welcomed expense as it helps stimulate the Palestinian economy. As website updates continue in August we expect to see contracting expenses next month as well.
Cost of Goods Sold (COGS): $340.15 went towards COGS. This is the amount we paid to our supplier to supply us the coffee and for packaging and shipping costs. Our COGS is the second highest expense item, and the main limiting factor when it comes to pricing more aggressively. We are working on lowering this in the coming months.
Marketing: $182.78 went towards various marketing costs including additional product samples to win over future partnerships, and towards marketing spend by paying for Instagram ads. We have not yet seen a return on our marketing spend and we are considering hiring a social media marketer from West Bank to help in these efforts.
Misc: $161.47 went towards miscellaneous expenses such as taxes, fees, and subscriptions required to run the website. These expenses are collection of marketplace fees for hiring a contractor through the Upwork platform, taxes on sales of goods, and a subscription fee to Printify to allow me to utilize a lower base COGS in order to pass on savings to customers.
Profits and Donations
Koffiyeh generated $49.22 in profits in July. Profits were rounded up to $50, and donated to IRUSA under the Gaza Humanitarian Aid effort. Koffiyeh also paid for the transaction fee so that usage of profits are maximized.
Looking Ahead
Koffiyeh started off better than expected with $408.50 in revenue, but we believe we can do much better. Our plan of attack currently is as follows:
Find ways to lower our cost of goods. We are working with a developer that will allow us to cut out Printify as the middle-man, so that we can place orders directly with the roaster. This increase our current profit margins from ~13% to ~36%. This will allow us to more agressively price our product, offer sales/discounts, a better subscription model
Partner with other non-profits to expand our reach. We are currently talking with a few Islamic non-profits to see if we can leverage each other. An existing non-profit can provide marketing, while Koffiyeh will donate all profits from sales originating from them, back to their organization.
Provide a wholesale funnel to brick and mortar stores, where wholesale profits will also be donated.
Expand our social media marketing efforts by hiring social media marketing experts, and creating a new blog about the journey of creating an online coffee store.
There’s a lot more work left to do to grow this brand, and we’ve only just started! Consider subscribing to our newsletter where we will provide you a monthly update of how Koffiyeh is doing, and how we’re making an impact in the Muslim world.
