Starting a New Brand, with the intent on keeping a Private Lable, as your Co-Packer, is going to meet you with a lot of opposition on these boards. The reason that you are getting the Push-Back is because you don't seem to want to sell Specialty Coffee, but you are erring more on the Commodity Coffee, position, and that is why you are getting chopped up here.
If you are thinking about getting into Coffee to Make a Quick Buck, then you will last as long as you Accounts Recievables don't bury you. That should take you 7-9 months unles your pockets are particularly deep. Don't be mistaken, all of us are in the business of making a Delta on the difference in price between, what we buy for and how much that we can sell for. But planning on making in a couple of dollars a pound, will put you out of business faster than anything. Let me play Devil's Advocate for a moment to hopefully make you understand.
When starting up my own Coffee Company, before I buy my own Roaster, I intend to pay a Reputable Roaster to "Toll Roast", for me. I am an Executive Chef and told a few of my Fellow Chef's that I was starting a New Specialty Coffee Roasting Company. I got calls in the next week from 6 of my Friends who were also Executive Chef's, that wanted to begin ordering a total of 10,000 lbs a month. Only making a few dollars a pound. Now let me give you a few realities of the Restaurant Industry. Let's say I said yes to all 6 of these accounts and started selling 2,500 lbs of Coffee a week. Restaurants are Notorious for letting the Vendors finance their Restaurants, so even though they are customerally on a 30 day net, they do not pay you right away and most take 60 days. So a Recap of the math Week 1 - you drop off 2,500 lbs of Coffee to your clients at $4.50 a lb, remember, you have to pick this up and drop it off, yourself, you have not figured out you cost of delivery. So the first week you have to pay to your Roaster $11,200.00, you can't bill them yet. Week 2 you have to pay another $11,200.00, you are owed $11,200 from last week, total of $22,400 you still can't bill. Week 3 another $11,200.00 + $22,400 owed for the last 2 weeks. Now it's week 4 and you pay your Roaster another $11,200 and you are owed $33,600.00. Now you bill, but they don't pay you right away, you can't cut them off because they owe you too much money. Week 5 you pay your Roaster another $11,200.00 a total of $56,000 in the last 5 weeks and nobody has paid you yet. Week 6 now you pay another $11,200.00 for a total of $67,200.00. Week 7, you pay your Roaster another $11,200.00 for a total of $78,400 and the checks have still not come in. Week 8 and you pay another $11,200.00, for a total of $89,600.00, and this week, you got in $12,000, so you are still at a $77,000 minus. I think that you can run out these numbers to see that making a $2.00 a pound mark up, can not sustain a continuing business model.
