Need advise on price increase

[namballe]

I would like to raise the price on my 250 gram bags of coffee, but dont really know the best/nicest way to do it. i dont want my (few) clients to say "thats to high". the projected increase will be $1.85 usd per 250 gram bag .
p.s. i will be telling them via email since this is the way i have been communicating with them.
thank you!

 

[topher]

What are you charging before your increase? That's under $.50 a pound increase. Just out of curiosity...why the increase especially now that the market is coming down?

 

[namballe]

What are you charging before your increase? That's under $.50 a pound increase. Just out of curiosity...why the increase especially now that the market is coming down?

hi Topher, the reason for the increase is due to my supplier increasing their price. the increase would be $1.85 per 8.81 oz. bag (250 gr).

 

[cestrin]

hi Topher, the reason for the increase is due to my supplier increasing their price. the increase would be $1.85 per 8.81 oz. bag (250 gr).

I'm no expert but I think that if you explain this to them in your email they will understand. There are variables that you can not account for, this being one of them.

 

[expat]

Topher makes a good point. Coffee prices are going down, not up. We bought our first pallet of beans in January 2012, almost at the market's peak. I can't tell you what a difference today's prices make to our bottom line compared to when we started. So first question for your supplier is: Why the price hike? What is the justification?

If I was a retailer and you came along with a 3% or 5% or maybe even a 10% price hike I could maybe see the need for you to do so --- but you're talking, if I used my retail price for 227g and bumped it 1.85 euro, a 30% price jump. That's huge! If I was the retailer you'd really have to do a super sales job on me to implement that type of price hike. Face to face, not via email.

Finally, do you have other options for suppliers? All my suppliers are LOWERING their prices and have been steadily doing so for over a year. Your supplier is going against the logic of the market so I'd certainly get to the bottom of that before just accepting his price increase since it could very well negatively affect your business.

 

[topher]

I read it quickly..sorry..that is a huge increase. Do you mind telling us what you were charging a pound?

 

[CoffeeJunky]

I don't think it matters what the wholesale prices on coffee is. If you think your coffee is worth the money or better then the competition and people are willing to pay, why not charge higher price.
When I was attending one of the coffee convention last, I saw a company charging 40 dollars per 1.5 pound coffee can. At first, I thought who would buy his coffee. There were like 30 other coffee companies who were selling for less including some of the well known company. But he was sold out of them before end of the show. ... How wrong I was...

 

[namballe]

Topher makes a good point. Coffee prices are going down, not up. We bought our first pallet of beans in January 2012, almost at the market's peak. I can't tell you what a difference today's prices make to our bottom line compared to when we started. So first question for your supplier is: Why the price hike? What is the justification?

If I was a retailer and you came along with a 3% or 5% or maybe even a 10% price hike I could maybe see the need for you to do so --- but you're talking, if I used my retail price for 227g and bumped it 1.85 euro, a 30% price jump. That's huge! If I was the retailer you'd really have to do a super sales job on me to implement that type of price hike. Face to face, not via email.

Finally, do you have other options for suppliers? All my suppliers are LOWERING their prices and have been steadily doing so for over a year. Your supplier is going against the logic of the market so I'd certainly get to the bottom of that before just accepting his price increase since it could very well negatively affect your business.

Expat,
i havent been keeping up on coffee trade prices, therefore didnt know they had dropped. where do you all get your coffee from? my suppliers are telling me that the "coffee rust" disease, plant loss, and increased crop maintenance are the factors for the increase. i can live w/o increasing my price, but family members are pushing me to do so. $1.85 is way too much of an increase imo.
i do have other suppliers, but this particular supplier has consistently sold me superior product.

 

[namballe]

I read it quickly..sorry..that is a huge increase. Do you mind telling us what you were charging a pound?

Topher, i am currently selling a 17.6 oz. bag $14.55 usd. to the end user.

 

[namballe]

I don't think it matters what the wholesale prices on coffee is. If you think your coffee is worth the money or better then the competition and people are willing to pay, why not charge higher price.
When I was attending one of the coffee convention last, I saw a company charging 40 dollars per 1.5 pound coffee can. At first, I thought who would buy his coffee. There were like 30 other coffee companies who were selling for less including some of the well known company. But he was sold out of them before end of the show. ... How wrong I was...

Hi CJ,
I am in South America where everything is overpriced. a 250 gram (8.8 oz.) bag of coffee here retails for approx. $10.00 usd. i believe (and so do my customers) that i have a superior product than what you can buy off the store shelves.

 

[eldub]

It blows me away that a bag of high quality beans from the Americas would cost more in South America than in the north.

Btw, I received a shipment of beans that cost us about 33% less today than the same beans purchased a year ago.

 

[namballe]

It blows me away that a bag of high quality beans from the Americas would cost more in South America than in the north.

Btw, I received a shipment of beans that cost us about 33% less today than the same beans purchased a year ago.

this is due to the fact that all the quality beans get exported, and the few quality beans that remain here are pricey!
WOW! 33% less today, that is a huge drop!
This is my new price structure after giving much thought:
250 gram bag customer pick up $7.85 (no minimum)
250 gram bag delivered in 3 mile radius $8.93 (2 bag minimum)
I have since emailed my customers, and all agreed on the new "delivered" price.

 

[PinkRose]

The online conversion says that 250 grams is approximately 8.82 ounces. If my calculations are right, your new prices would be about $14.24 a pound for customer pickup and about $16 a pound for delivery.

If your coffee is as good as you say it is, I'm guessing that most people will willingly pay the increase without making much of a fuss.

 

[namballe]

The online conversion says that 250 grams is approximately 8.82 ounces. If my calculations are right, your new prices would be about $14.24 a pound for customer pickup and about $16 a pound for delivery.

If your coffee is as good as you say it is, I'm guessing that most people will willingly pay the increase without making much of a fuss.

thanks PR,
all of the weight calculations performed in S. America, is done in either grams or kilos. i am still trying to get used to it:decaf: