Is the coconut charcoal briquette business worth it? maybe if you come to this article, you may want to start a charcoal business or maybe you already doing it.
some of them become resellers, by buying them from factories. And there are also those who import these goods to be sold to stores or directly to consumers or evenly export them again with increasing their price (trader). And last but not least it all started with the first supplier who produce the products from scratch and sell to the locals or evenly exported to worldwide countries.
There are lots of coconut briquette seller that gets a high demand from the market and gain a high income, they believe that this charcoal business is promising for profitability and worth the effort. While there are also not a few businesses that are stagnant and lose profit, because of the challenges that come when selling or buying the products. They believe that this business is not recommended because of the high cost and they have to lower their margin because of the price war.
So it means, the viability and profitability of a coconut charcoal briquettes business depend on several factors, including market demand, competition, liabilities costs, and marketing strategies.
In this article, we will help you by giving you the information that’s needed before you considering to do a coconut charcoal briquettes business.
Market demand refers to the level of interest or desire from consumers to purchase a particular product or service. It represents the potential size and scale of the market for a specific product or industry.
When assessing market demand for coconut charcoal briquettes, you would want to consider factors such as:
Product awareness means a level of the market that is familiar with and understands the product. Which is coconut briquettes
To analyze what level of knowledge and awareness your target market have, you can observe it by doing a survey or interview with specific people that you can reach from the community, specific event, etc.
You also can do surveys or interviews with general people to know level of the general market awareness. If they already knew or are familiar with charcoal briquettes, then your target market also has a big chance of knowing it and also understanding the products.
Demand seasonal means that consumers only buy the product in the situational moments, the demand will grow higher in the particular moment, and then will the trend will go lower over time, but potentially the trend will be up again.
For example, if the charcoal product is for shisha users, sometimes the demand will be stable compared to charcoal products for warming your house in the cold winter.
Grilling is sometimes used in specific moments or seasons. But basically, it depends on your market behavior, because different regions and geography affect your market behavior.
To research this, you can analyze it by using Google Trends or by doing a survey. This strategy can help you to collect more data and have more accurate answers.
Most B2C sellers doing this mistake when it comes to selling charcoal briquettes without research.
Sometimes, they sell their product in an online marketplace or from social media, their doing ads with lots of money. But still, they do not have a customer yet.
One of our clients ask us about this situation, that they selling it from Facebook, and they spend hundreds to thousands of dollars on Facebook ads, he already learn from classes about how Facebook ads work, and still not getting one single customer.
And then we ask him “Let’s pretend that you are the customer, what is the reason for you to buy charcoal briquettes”
He replied “Maybe when I hang out with friends, have a family gathering, etc do barbeque”
And then I ask him “Where do you buy those charcoal?” And he replied “At retail stores”
That is the answer, he and their market buy charcoal from retail stores and do not do any booking or preparation to buy charcoal from online stores. Because in their market, they all think buying charcoal online is not effective. They can buy charcoal offline on the same day, no need to wait to prepare the charcoal in the previous days. Because they think buying charcoal is not a serious reason and also is not a big ceremony. Just for hanging out with friends, chilling out, or grilling with families.
But also, there are one of the few behavioral markets out there that want to stock charcoal briquettes a lot long before for their grilling needs or winter needs such as grilling restaurants, some shisha user, etc.
You can do this by interviewing the market by asking where he usually buys charcoal or checking on Google trends in your country and also checking on your local marketplace and find out how many buyers there are online.
To analyze offline buyers, you can check at the nearest store and find the product’s amount, is there more charcoal products than snack products, etc.? Or you can also check from a charcoal shop or charcoal seller around, whether there are many visitors, etc. The size of the number of visitors depends on the niche, it’s only natural that it’s not as busy as a general store. This is one of the effective ways to know whether your product is impulsive or not.
Predicting is kinda tricky but it’s needed, because to know your market demand in the future, you can prepare the supply and also sell it at the right time.
But predicting needs accuracy and considerations, predicting needs lots of data to collect. And to do this, you can do it on Google trend by seeing the graphic of the keyword of the products, do a survey for more accurate data you can do an interview to get a specific answer, and also you can do demand forecasting which is calculating your demand prediction from your previous data number of customers.
You can check how much your market needs by checking whether they often repeat orders or not for charcoal products (not necessarily coconut). This can identify how often customers buy. You can analyze it by asking yourself “Do I buy charcoal again and again? If so, what is the reason for my repeated purchases?” or interview the market to get a specific answer and opinion.
Analysis from competitors means you can analyze how many of their customers are, is it a lot? Is it enough? Is it a seasonal customer?
You can check how much product awareness the market is by seeing how many competitors there are, if there are enough of them, then you can be sure there will be a lot of demand too
Competition refers to the presence of other businesses or companies that offer similar products or different products but still affect your business. More simply still in one market niche.
Here are a few points to consider when evaluating competition:
When considering brand awareness in the context of competition, it becomes common to search your potential of how well-known and recognized your brand is compared to your competitors.
Are there lots of charcoal brands in your country?
Do big brands always win? Or it can still be touched?
To know this, you can understand your market more by seeing your customer loyalty, do they have a product preference? You can do an interview to ask these questions related to customers’ favorite products and truly finding what they value the most.
This price war does not just mean between charcoal briquette products, but it also means between types of charcoal briquettes.
If a price war occurs, it may be due to several factors such as:
1. The most important market is looking for something cheap
2. Quality solutions are not a big focus for the market
3. If it’s cheap, you can buy many units (2 packs, 3, etc.)
For more information, you can interview the market, why buy at a cheap price.
Some of the markets in geographical segmentation have this kind of problem when it comes to price wars.
Each type of charcoal briquette product competes with each other, including the price. And this will harm every charcoal briquettes business because they will have to decrease their price and have a low even minus margin.
Coconut charcoal is the best quality of any other type of briquette, and the price is slightly higher than any of them because they have to import to meet their supply needs. But then, they have to decrease their price because of the competition with lesser quality briquettes such as hardwood and vegetable briquettes.
This will benefit and harm coconut briquettes. The benefit is, coconut briquettes will have more potential for buying because the highest quality has the same price as the lower quality briquettes. So logically, the buyer will prefer coconut more because is valuable.
But it also makes coconut briquettes seller have low income and profits or even can be minus because of the price war.
This happens to one of our clients from Spain, and they have to sell it more cheaply because of competition with other types of charcoal briquettes, even with regular charcoal itself.
Their market has no clue about each of the briquette variants’ value and just buys which is the cheapest.
Then we ask him “Do you sell coconut charcoal with mention of their values?” And he said no, his packaging is not mentioning anything besides the logo, types of briquettes, and pieces amount.
Coconut briquettes have lots of value, one of the reasons for having slightly higher prices is because of their best quality and environment friendly. Every 1000 kg of coconut charcoal briquettes made can save up to 75 trees.
That is what we said to our client and the other coconut briquettes’ value must be mentioned in the package or in your ads/promotion.
Coconut briquette’s price is also slightly high because of the supply, europe has less raw coconut material supply than a tropical country such as Indonesia. That’s why they commonly import from Indonesia.
If we know the basics of supply and demand theory, the less supply but high demand, the more the price will increase. And if the supply is high but the demand is low, then the price will be decreased.
So, to know your country’s price war level, you need to analyze directly in the online or offline stores and do a comparison.
But again, if a price war happened, you still have to know the reasons. If your countries have lots of coconut raw material, then it is still reasonable if the charcoal briquettes have almost the same price as other types of briquettes.
But if your country has less coconut supply, then you cannot be pulled by competition to price wars. You can do it by mentioning your product’s advantage and competitive value. Focus on customer loyalty (discount, quality, testimonial)
And if your market is still healthy and there is no significant price war going on, you can also ask the market “Why did you choose to buy the price that slightly high?”
Or do a survey about what influences your market the most, quality or price? Can interview with the market or ask yourself.
Is it coconut? Is it hardwood? Is it regular charcoal?
This can give you information about who you compete with, if it’s from the same products, then your focus is on brand awareness.
If it’s from different types of briquettes or even charcoal, then your job is to focus on product awareness.
You can easily identify this step, by seeing it from an online or offline store, which charcoal product is the best seller? Which type is the best? Which brand is the best seller? Etc.
Or you can do a survey by asking them which types of products they like the most. Why does the market like to buy products A or B? Is it because of quality, price, environmentally friendly, etc? This could be a unique selling point for your product in the future.
This step is not need lots of explanation, but it’s the most important.
If you do your research and believe you can conquer it, then this is a strong consideration for starting a coconut briquette business
Sometimes research makes someone pessimistic, but I want to share one of my favorite quotes for getting started that maybe can help you to consider:
“Just start, don’t wait for perfection, don’t research, just search”
The type of seller liabilities depends on each different role (reseller, importer, and supplier).
Usually large capital will do business in imports, while small capital will do business to become a reseller first and then expand its business.
Meanwhile, for exporters, large capital is needed as well as a large supply of raw coconut and geographical location, because a large number of briquettes are needed and the quality is maintained.
Usually, briquette exporters are in tropical beverage countries or coconut-producing countries, such as India, Vietnam, India, and Sri Lanka. For China and Singapore, he is more of a trader.
Plus there are sudden expenses that must be prepared, and it all depends on each person’s different business roles. So as a conclusion, it is necessary to record effective and accurate cash flow. So there is already preparation and calculation of the potential net margin before starting. This can be a consideration to do coconut business or not, whether to continue the business or not, etc.
Marketing strategies are thousands of ideas, but the goal is the same, namely to get buyers and repeat orders.
It could be an assessment of whether the coconut briquette business is worth it or not, due to an effective marketing strategy or not. In this article, we cannot provide which marketing strategy is the most effective, or the best, because it depends on market segmentation and customer behavior.
What we can do in this marketing strategy is to provide information to you, to equate and unify the perceptions of any marketing strategy objectives, we will dig deeper.
So, to find out what the purpose of marketing is, we can take it from the first reason that we dig deeper. What is the goal of marketing? The main goal of marketing is to get buyers and repeat buying.
How to get buyers? How to get buyers to repeat buying?
Product awareness must be increased, brand awareness increased and start SELLING.
How to increase Brand awareness? Solutions for brand awareness: 1. Lead magnets
2. Brand logos
3. Dare the price a bit higher
4. Unique selling point (save tree/environment, no smoke, no chemicals, no ODOR, burn longer than charcoal)
4. Buy 2 get 1, etc
5. Testimonials/demonstrations
6. Sell retail
Solutions for product awareness:
1. Seasonal demands
2. Brand awareness
3. Give concern about the product (winter, cold, energy, warm, carbon emission, environment friendly).
From there, you can continue to dig deeper, for example, “How can I get testimonials from customers?” “How can I give you concern about the product?” Etc.
This technique can dig up information and analyze business and market to the deepest, so you can find various marketing strategies that can be a solution for your coconut briquette business.
It is recommended to conduct thorough market research, create a detailed business plan, and consider seeking advice from industry experts or consultants to make an informed decision about the viability and worthiness of a business involving coconut charcoal briquettes.
By thoroughly evaluating the competition, you can gain insights into the existing landscape, understand customer preferences, identify gaps or opportunities, and devise strategies to position your business effectively in the market.
Hope this article helps you 🙂
