New York tea company brews multichannel success

Tea has been a part of Brooklyn Tea founders Alfonso and Jamila Wright’s relationship from the start. Even the couple’s first few dates revolved around the beverage.

“We would go tea hopping instead of bar hopping,” Alfonso says. “She really loved the social aspect, while I was into the nerdy side of tea, like the chemical compounds and its long cultural history.”

In 2016, the couple turned their love of tea into a business when they began selling their own concoctions at local events and festivals. Today, they sell 50 varietals through two brick-and-mortar tearooms — the original spot in the Bedford-Stuyvesant neighborhood of Brooklyn, the other in Atlanta — as well as online and through big box retailers.

Alfonso, who is a certified tea sommelier, comes from a Jamaican household and says tea is a big part of his Caribbean culture. “We drink a lot of tea — tea in the morning, tea at night,” he says. “Tea is the always the answer.”

He recently shared how the couple have scaled Brooklyn Tea into a successful, multichannel small business, found vendors, and put financing in place to support company growth.

Tip: Invest in the right vendors.

Expanding sales of Brooklyn Tea products beyond the tearooms and company website was an important part of the company’s growth plan, but its shift into selling through big retail stores included some tough lessons about the importance of having the right vendors.

“Scaling up to work with big box stores has brought us great exposure and potential,” says Alfonso. “But it was very stressful."

The heart of the problem was that fulfillment requirements for large retailers are typically very complicated and are geared toward businesses with full-time managers to oversee the process.

“Specifications required us to get new boxes, make sure our label maker was the right size and kind, and make other adjustments,” Alfonso says. “It was nerve wracking because there are financial penalties called chargebacks that can amount to thousands of dollars if you get something wrong.”

At first, it was just Alfonso, Jamila, and one of their employees working into the night to put orders together. Gradually, they were able to afford a co-packer — a company that packages and labels products — and a storage unit to hold orders until it was time to ship them. They hope to continue expanding by gaining access to a fulfillment center and forming a partnership with a distributor.

A low point came when a big box retailer failed to pay an invoice.

“It put us in a financial hole, because it tied up so much of our inventory,” Alfonso says. “It was net 50 and we thought we could float the expense, but they gave us the runaround and ultimately never paid us. It was a learning experience because we found out later this was common for the way this company treated smaller vendors.”

The couple eventually learned about the importance of working with a wholesale broker, who could guide them through the process of working with large retailers and big box stores.

“The broker is with us on every step, making sure that we understand what the client needs, and the client knows what we need,” says Alfonso. “They help advocate for us — if we don’t get paid, they don’t get paid.”

Bottom line: Securing the right vendors is important for efficiency and to avoid expensive missteps. Minimize the likelihood of costly mistakes by networking through your peers and researching the path ahead as much as possible to learn about the relationships you need to forge to scale efficiently.

Tip: Secure financing.

Cash flow can be a significant challenge for any small business, and Brooklyn Tea is no exception. Brooklyn Tea tried using funds from one part of the company to fund other business efforts and found this juggling act to be challenging.

“Orders for big box retailers require a lot of money up front and it can be difficult to manage those expenses with company cash flow, even if things are going well,” he says. “Our biggest challenges were always financial.”

Over time, the duo determined that outside funding, available when they need it, is necessary to support their goals and maintain momentum. Their first tearoom in Brooklyn was funded with a loan from the Small Business Administration (SBA), and the business has leveraged other types of financing such as credit cards and lines of credit as it has grown.

“We try not to use too much credit, but it can be valuable to have it available to meet unexpected expenses and take advantage of opportunities,” he says.

The Wrights use a tax accountant to help manage finances, as well as QuickBooks for recordkeeping. Other apps also help manage the business, such as one for payroll and one for sales tax.

Mastercard’s Tap to Pay option has been particularly helpful to support Brooklyn Tea’s events outside of its tearooms. This technology allows Brooklyn Tea team members to accept contactless payments on their phones, without having to use an additional piece of equipment.

“It’s super reliable and very convenient for accepting payments when we are on the go. Convenient payment services like Tap to Pay help us punch above our weight and run our business as effectively as possible.”

Bottom line: Financing and financial tools can help to put entrepreneurs on a level playing field with larger competitors. With established financing tools in place, your business can maintain momentum and seize opportunities to reach its goals. A business banking partner can help advise you on the funding and tools that are the best match.

Tip: Actively network.

Connecting with other entrepreneurs in a variety of ways has been an essential part of Brooklyn Tea’s growth strategy. Alfonso and Jamila have gone out of their way to connect with other small businesses to learn from them and share what they know.

“Be friends with people in your neighboring business, go to events and conferences, and meet other people in your field,” he says. “These connections will help you find what you need to succeed and avoid mistakes that can derail you as you grow.”

Local business organizations can be an excellent way to connect with professionals in your community. “The Brooklyn Chamber of Commerce has been amazing; they’ve connected us with so many folks, such as our initial contacts at Wegmans,” says Alfonso. “They even helped us get grants during COVID. They’ve been a great partner.”

Setting up booths to sell tea at local festivals like Brooklyn’s Atlantic Antic is also a good way to connect locally, particularly in the summer when business is slower in the tea shop.

“We like going out into the community and meeting new people,” he says. “It’s a way to introduce ourselves, and our teas, to people who may have never come in the shop. It’s also a great way to meet other small business people. It’s like business summer camp.”

Partnering with complementary small businesses is another way they have increased their brand presence. For example, in a recent venture with the artisan cocktail garnish company Blue Henry, the two co-promoted a mocktail box on their respective social media accounts.

“We’re able to leverage each other’s audiences,” says Alfonso, who has a background in digital marketing. “Social media is an extremely effective tool for promoting our business, especially when we share content that provides value to our audience.”

Accelerator programs have also helped Brooklyn Tea network and find partners. Specifically, the Target Takeoff Food and Beverage accelerator program gave the couple insight on how to grow and scale, and led to the brand’s placement in 100 Target stores.

“We want to expand with Target and get into more of their stores, and to get into more grocery stores, hotels, and offices,” says Alfonso. “We want to be wherever tea is served and sold.”

Bottom line: Think of other businesses as a resource and partnering opportunity, not just as competition. Network with other entrepreneurs and be generous with insight. You’ll find that the reciprocal benefit is well worth it.

Do you need guidance on your small business journey? Schedule an appointment with Citizens to receive personalized assistance for your business.