10 Easy Steps to A Profitable Charcoal Business

1.      Determine your target market.

Market research is crucial at this stage and it is imperative that you have an intimate
understanding of the needs of your segment.  It is also critical that you match your
product according to your target market.  For example, we manufacture products for a
variety of markets; including: briquettes for BBQs, wood pellets for heating homes and
the new emerging market of hookah charcoal that is used to smoke shisha.
 
2.       Decide which product.
There are 2 options, lump charcoal or briquettes, it’s highly dependant on your target
market and product.  We are happy to discuss and advise you on the best option,
according to your specific needs. Most modern retailers in Europe now require Forest
Stewardship Council (FSC) certification for lump wood charcoal products, but as
coconut shell charcoal is a non-timber environmentally friendly product, it doesn’t
require the same certification.
 
3.       Develop your brand.
Branding is key to your success because it is what differentiates your product from your
competitors.  Spend time developing a brand that is unique, will appeal to your target
market, is easy to remember and represents the core values and mission of your
company.  Ensure that your brand is not violating any trademark laws and be sure to
register it at your local authorities to protect yourself.
 
4.       Design your packaging.
Packaging is designed to capture a customer’s attention and drive them to buy the
product.  It can directly effect the buyer’s decision to purchase the product and must
therefore be in-line with your target market. If you don’t know how to design the
packaging, our graphic designers will be more than happy to assist you.  Just tell us
your brand and slogan, and let them do the work for you.
 
5.      Obtain a unique EAN or UPC number for your brand.
On the packaging, you need to print your own unique barcode, either EAN (European
Article Numbers) or UPC (Universal Product Code). This EAN/UPC barcode number will
identify your product in computer systems at retailer outlets. If you don’t have one, we
would be happy to assist you in obtaining one and ensuring it is placed on all your
packaging.
 
6.       Set your retail price.
The best way to set your retail price is to monitor your competitors’ price and set yours
according to your brand positioning strategy.  For example, are you a premium product
with a premium price or a low cost economical alternative to your competitor?  It is also
important to consider things such as: production costs, overheads, economic conditions
and seasonal demand.
The basic rule of thumb in setting a retail price is by using the formula:  35-35-30. The
components are as follows: 35% is cost of goods sold (COGS), 35% is sales and
distribution costs and the residual 30% should reflect profit.  For example, if the landed
cost of your product is USD 0.10 per lb, then you can set your retail price at USD 0.29
per lb, and you’ll have a healthy profit of USD 0.09 per lb.
 
7.       Establish your distribution networks.
The distribution channel is very important in the charcoal business because it is a very
fast moving consumable product (FMCG).  The key to selling FMCG is their availability
to the consumer.  For example, market research shows that a famous briquettes brand
in the USA, despite its many negative reviews, is still the best-selling briquettes in the
country. This particular brand has managed to distribute its product into almost all retail
outlets in the country.  Put simply – if it is available, it will probably sell.
 
Selling online through eBay, Yahoo Stores or Amazon is also a very good start in
establishing distribution channels.  The next step would be to win business with major
retail chains like: K-Mart, Wal-Mart, ACE Hardware, etc., to distribute your products.
Direct selling to big consumers like restaurants is also a good option.
 
8.       Review and monitor your brand performance regularly.
Some brands may not be performing as well as expected, so you need to monitor them
carefully and regularly.  Underperforming brands should be terminated and a new brand
should replace it.
 
9.       Diversify your branding.
Do not depend on one brand only. Try to diversify your products and brands. For
example, if you have a successful brand “AAA”, make a variation of this brand like
“AAA-Premium” or “AAA-Gold”, with additional features, of course.
 
10.   Be our long term partner.
      As a long term partner of Supreme Carbon Indonesia, you can be assured of
receiving a high quality product with the availability of meeting the demands of your
target market.  Let us sweat it out for you manufacturing the charcoal, so you can enjoy
yourself as a Martha Stewart in the charcoal business.