They Shut Down My Coffee Company

What's up guys, it's Graham here. So, I think it's about time that we have an open talk about what happened with my coffee company because I read all the comments asking what's going on. Well, trying to get any update from me on the status of when it's going to launch, and I just can't keep answering with "soon" while putting it off a little bit longer. So, you all deserve to know exactly what happened, and to bring you up to speed, here's where it all started.

On June 19th, 2019, a subscriber called in asking for me to review his spending habits for a video on my second channel, The Graham Stefan Show. But during the call, it was revealed that he spent an exorbitant amount of money every single month going out and buying coffee. I jokingly responded to him saying that he should make his coffee at home because my coffee only costs 20 cents to make. While I'm not sure what happened, for some reason, everyone began commenting about my 20 cent iced coffee, and that quickly became a running joke in the channel as a way to save money.

So, I leaned into it, and a few months later, I created a complete tutorial on how I make my own 20 cent iced coffee from home. I explained how if you invest the difference in the price of paying for Starbucks coffee, that savings would add up to over $1.2 million over the course of your lifetime. After that, everyone just loved the idea, and the homemade coffee just took on a life of its own. It just became like this running theme throughout the channel, appearing in hundreds of videos, mentioned dozens of times, and even inspiring the name of the podcast, The Iced Coffee Hour, which features, you guessed it, the 20 cent iced coffee in every single episode.

By the way, I totally forgot to ask you to smash the like button for the YouTube algorithm, so if you wouldn't mind doing it just really quick before you forget, it helps up my channel tremendously. And as a thank you for doing so, here's a picture of a baby sea turtle. Just give it a tap. As soon as you tap it, I'll disappear. Seriously, I'm stuck here until you know.

I'd always joked about the idea of starting my own 20 cent iced coffee company, but the reality was I had no idea how to run a business like that. I didn't have the time, and I had no idea where to even begin. But that was until I received a completely random package at my front door. Inside were hundreds of coffee cups—like here's just a small sample of the sheer number of coffee cups that were contained in that box.

At the very top of that was a handwritten letter from a subscriber named Noel who ran an e-commerce business specializing in the shipping and packaged foods and snacks. He explained that he already owned the facility, he had the team ready to go, he had a marketing plan, and together we would be able to create a one-of-a-kind coffee business. Now, up until that point, I'd received dozens of offers from people who wanted to partner with me to create a coffee company around the 20 cent iced coffee brand, but honestly, I'd turned them all down. But this one, for some reason, was different.

So, I called him up from the number he left me in the letter. After speaking with him for a few minutes, I gotta say, his excitement and enthusiasm for starting a coffee company got me really into the idea. I just had this gut level feeling like this was a new path worth exploring. I mean, on the surface, everything seemed too good to be true; like he was already in the business, he knew how it worked, he had the warehouse and staff already there, and we both had the same vision. We wanted to start a great coffee company at a price that saves people money.

He would do all the back end work like production, inventory, packaging, shipping, and customer service, and I would do the promotion, while working together to create a brand that I would be proud to stand behind. From there, we taste tested dozens of coffees to find the perfect brand. We went back and forth on names and branding, and that proved to be much more difficult than I expected.

Here's the thing: overhead is expensive. Every single item begins adding up, and at the end of the day, that cost gets paid by you as the customer, which is not something that I wanted. For example, if you want your order in a fancy box, that's going to cost you an extra few dollars on shipping. Or do you want shreds of paper gently nesting your coffee in a box? Well, that'll be an extra 25 cents and increased packaging time. Or even something as small as custom packaging on an envelope is going to be extra.

Then before you know it, the break-even cost on a single bag of coffee is $14, meaning if you sell it anything below that, you lose money. Now, for some people who sell designer bags of coffee for $19 plus shipping, it's not going to be an issue. But for me, I just can't in good faith sell a bag of coffee for $19 knowing that you could just as easily go to the grocery store and buy almost the same thing for $12.

So, that is when we began the path of becoming as cost-efficient as possible while still selling a premium blend of ethically sourced coffee. We realized at the end of the day, we don't need expensive packaging. We don't need coffee nesting in shreds of paper. I mean, you're just gonna throw it out anyway, so why pay for it? I really wanted to design a coffee around what I would buy myself, and after a lot of thinking, we did it. We found a formula that would give us the most cost-effective premium coffee, locally roasted just before shipping, delivered straight to your door, while still being an ethically sourced Fair Trade coffee that tastes good. At the same time, it's good.

Now sure, we're not going to be making money up front, and we're selling all of this with extremely thin profit margins just for the sake of growing the business and thanking you for trusting us with your coffee needs. But even though all of that sounds really good so far, here is where it started going wrong. The name we settled on was Brew Coffee, with a logo featuring yellow letters on a black background, similar to the overall aesthetic here on the channel. We applied for a trademark mid last year; everything was approved, and then we spent $10,000 on packaging, a branded website, and materials needed for the launch.

At that point, everything was going as planned, and in a moment of excitement, I posted a picture of the upcoming project on Instagram to tease the new release. Within a few minutes, we received a message from somebody else claiming that they owned a trademark to a similar name and a similar color combination to ours and that if we move forward, we would be infringing on their product. The message ended by saying that they didn't want to get lawyers involved because they could be too expensive, but instead, we could try to work something out.

To me, this just kind of felt like it was going to turn into a money grab because neither of our products were even in the same category. Neither of them had been released, and we had filed for a trademark six months prior that was approved. So, we stopped everything that we were doing and consulted with a trademark attorney to figure out the best way to proceed.

Now, trademarks are a tricky thing because even though you might be approved for a trademark, it's not black and white, and there are a lot of nuances that play into what you can and cannot do. A lot of it is open to interpretation, and in the event of a lawsuit, a decision would be made as to what constitutes reasonable consumer awareness. Now our attorney told us that because this other brand was selling a product in a totally different space and because their trademark and name are slightly different, legally, we had a very strong case to move forward as is.

But they still reserve the right to take us to court if they wholly believe that we're taking away from their brand. Now, that left us with a few options.

Number one, we just ignore the person, and we move forward anyway. There's a chance that nothing happens, and we could go ahead with the logo and a name that we really like. Number two, if we reach out to this person, maybe they just want us to send them some money, and then they'll back off. But if we do that, it's probably going to cost a lot more money, even just starting over and losing our initial $10,000 investment.

Then, three, if we move forward as is and then we receive a cease-and-desist letter or a lawsuit claiming that we've damaged them in some way, that would cost us a lot more money to fight on a product that we're not really making much money on to begin with. And finally, four, we could just start over again from scratch with a brand new name, new packaging, and get everything trademarked as tightly as possible so that if anything does happen, we know 100 percent we're in the clear and everything is good to go.

Now, I want to make it very clear that if we honestly felt we were infringing on someone else's trademark, absolutely, we would back off. But from my perspective, this just seemed like such a far stretch, and it seemed as though they just wanted something from me, and that was not something I wanted to play into.

So, after running through all of the options, the choice that made the most sense here was to completely scrap the idea and start over again from the very beginning. I'm not gonna lie; it was a big disappointment because we were days away from making the announcement and launching here on the channel. But I'm a firm believer that everything happens for a reason and that in some way, this was meant to push us in a better direction. And perhaps it did.

A few weeks afterward, we agreed on the new name, Bankroll Coffee, which allows us to lean into fun concepts that play into the whole theme of it. For example, I'm in Hands Coffee, YOLO Coffee, or Fire Coffee. It's a lot more of a lighthearted approach, and I think it gives us a lot more versatility to give you a lot more options under the whole coffee umbrella.

Now, even with all of that said, I know you're probably curious about the numbers behind this—how much it costs us to make and how much we're going to be earning from this. Now, normally, this is something a business would never tell you about, but because we're a personal finance channel and I've been open about everything since the very beginning, here's how much we're paying to do this and how much we're expecting to earn in the process.

So far, we've invested a total of just over $13,000 for branding, packaging, legal, and website creation, not including all the money spent and then lost on things that had to be changed. The coffee itself is ethically sourced from Brazil and Colombia, roasted and shipped the same day. And by the way, only a handful of companies can say that they do that. We're paying a wholesale cost of anywhere from $3.30 to $4.10 for the coffee, $0.75 per bag, $0.15 per label, and $0.88 for packaging. Shipping costs us anywhere from $5 to $5.23 on the West Coast to $8.88 on the East Coast, and that, of course, increases marginally if you order a second bag.

Our plan is to charge anywhere from $10 to $12 per bag of coffee, depending on what you order, with flat $5 shipping, meaning our total profit is pretty much about $2, not including all the miscellaneous expenses that go into this that get reinvested back into the business. However, our profit margins begin to increase when you order two bags or more because that way, we can ship twice the amount for pretty much the same cost.

This is meant to be our most cost-effective option, and sure, it's not going to be as cheap as going to the grocery store and buying it there yourself. But if you want something literally shipped to your door without you ever needing to leave the house, with premium coffee that gets roasted right before it's shipped, this is hands down one of the most affordable coffees online without sacrificing quality.

Now, I get it; I'm basically not making any money right now, and I'm certainly not expecting to be selling thousands of bags of coffee a day anytime soon. So, what's the plan? Well, I just want to build a coffee brand that's good enough to stand on its own without me forever needing to be involved to grow it.

The biggest problem that I see with so many influencer brands is that it strictly relies on that person to continue pushing it; otherwise, it fails. And to me, that's just not sustainable. I want Bankroll Coffee to be something that continues to grow, even if I don't mention it. Over time, the business itself is going to be worth more and more as it continues to grow and expand. I'm not trying to make a quick profit up front. I don't see the point in charging any more than we need to, and when this is something that I want to see flourish over the next five to ten years, it's necessary to sacrifice the profit along the way so we could reinvest everything we make back into the business and improve.

As of now, like today, this very moment, by the time you're actually watching this video, after almost a year of working on those behind the scenes, I'm so excited to announce that my coffee is officially for sale at bankrollcoffee.com. To celebrate, I also thought it would be fun to sell 69 limited edition signed and numbered coffee mugs, with the picture of me actually signing your individual mug because why not?

So, if you're interested in buying one of those before they sell out, the link is down below in the description. And again, like I said, this is not something that we're making money with; anything that we do make goes right back into the business, and you're buying all of this at our own cost for the sake of thanking you for giving us a shot. But this should be a really exciting new chapter of trying something new because, like I said, I have never sold coffee before, and I'm excited to see what happens.

It's also going to allow me to share a different perspective with you about investing, business, and continuing to learn as much as I can about a product I never thought I would be selling—the 20 cent iced coffee. So, with that said, you guys, thank you so much for watching. I really appreciate it. As always, make sure to destroy the like button, subscribe button, and notification bell. Also, feel free to add me on Instagram; I post there pretty much daily. So, if you want to be a part of it there, feel free to add me there.

As on my second channel, The Graham Stefan Show, I post there every single day I'm not posting here. So, if you want to see a brand new video from me every single day, make sure to add yourself to that. Thank you so much for watching, and until next time!