Price

[Bardo]

A couple of pricing questions:
1) Do you change your prices when you change your beans , or do you try to keep a steady price, and buy beans to stay in that bracket?
2) What is the market price for a 12 oz bag of fresh roasted beans in your markets?

I am starting out roasting an Ethiopian Yirga Cheffe, which I am getting for around 2.92/lb.

Thanks for your input.

Freeman

 

[Redswing]

I'm interested to hear answers on this one.

1) I personally have been charging a single price straight across regardless of origin. Don't see that too often when I cruise the bigger roasters webpages.
2) Around here, where coffee isn't taken quite as seriously, prices seem to be around $11 for 12 oz at the grocery store in the Pete's/Starbucks ballpark. My bags sell for $12.

But it's a tough one for me. I have been looking for those people who are willing to spend more (in a lot of places you see $18-$25) for fresh roasted coffee and can't seem to find them.

 

[John P]

Pricing depends on the quality of product you start with, the skill you have as a roaster, and the confidence the customer has in you based on your proven skill. For us, everything we buy is above Specialty grade 85+ on a cupping scale, and our reputation is built on quality.

We have tiered pricing starting at $18 and going up to $24 (18, 19, 21, 22, 24) for a 312g bag -- depending on the coffee. (More for CoE or Best of coffees). Typically the $22-$24 go fastest because they comprise only about 20% of our offerings (rarity). Most of our coffees are priced at $19 and $21. Other roasters in our market are priced about $13, and $15 for the "better" stuff, but the others neither source the quality of beans, maintain the same freshness standards, nor have the same roasting skill. Thus, theirs is a poor value.

If everyone collapses around one price, you will only stand out if you are markedly higher AND have a superior product. Set a higher standard than everyone else in your market, exceed that standard by continuing to improve your skills, and even at a high price, you will often be seen as the greatest value.


addendum: When I started roasting in 2005, we did # and 1/2# bags for $17 and $9, respectively. As we progressed, I wanted to move to one size so in late 2007 we started 12 oz (340 g) only for the same $17 and finally settled on 312g a few years ago, with improved packaging, and moved our lowest price to $18. So it's a progression. However, when you look at how you are pricing things now, you need to look at things with 2014 eyes and 2014 prices.

 

[CoffeeLovers]

I think pricing depends in how popular you are in your locality. No matter how you change your price but your skill is known to be the best in your area, your customers still stick on you. However, don’t be too much otherwise it can also damage your business. Remember that quality and better service is the gauge to maintain your business but pricing can also be the factor.

 

[John P]

CLM,

Popularity doesn't dictate a pricing/value structure. Price must be commensurate with the quality of the product. Popularity has nothing to do with it.

 

[eldub]

John: Don't beat your head against a wall trying to make sense of CLM's posts. I'm under the impression that his main concern is getting publicity for his magazine rather than providing content on the forum. Almost every one of his posts is vague and fails to answer questions posed by the op, IMO.

 

[John P]

eldub,

I agree. But other readers need some sanity to cancel out his mindless responses.

 

[PinkRose]

eldub,

I agree. But other readers need some sanity to cancel out his mindless responses.

Thanks for the sanity and clarity.

Some of us need an ESL tutor to figure out the responses. Wait! I used to be an ESL tutor. Maybe that explains why my head starts to hurt after reading some of CL's posts.

This sentence reminded me of the good old days, when I used to try so hard not to laugh:

"No matter how you change your price but your skill is known to be the best in your area, your customers still stick on you."

Rose

 

[CoffeeJunky]

To All,

I really don't think there is guide line for the pricing on any product.
Who sets the price for anything? Why BMW cost more then Honda. How Starbucks can charge 12+ dollars for the crap they put out.
It really doesn't matter what the prices are. As long as you can satisfy your customers and their demand.

I think if you can educate them about the coffee, you could charge little more. Then again, why is that our responsibility....

If you look at other industry and follow their reason to set your own pricing that makes sense, i would suspect you won't have too much problem with it.

Good Luck

Eldub and John,

Stop making fun of my favorite people on this site. I love them with all my heart since they make me look little smarter..... lol

 

[John P]

CJ,

The market sets the price. You price a product high, low, or in the middle (so no one's the wiser) and the consumer decides if that's a good value for that product. If yes, they buy it... at which point you've now been given a green light to raise prices in the future with no problems.

If it's a "no" from the consumer, you're screwed.

 

[Bardo]

Yeah, it's that "screwed" part that has me pausing before I price my first bag. Because I will be a small producer with a very limited product line to start, I want to hit the sweet spot for both the product and price for my market. I understand that this is somewhat of a swag. The good news is that there is not a lot of micro-roast competition in my market, so my only real competition is the store-bought coffee.

 

[expat]

I mainly sell in retail outlets - about 100 or so, so far. Since I'm not personally there to sell the product I have to find a way to stand out. So I have very different packaging which gets a look. And I'm usually the highest priced coffee per gram on the shelf. Both of these factors -- I hope -- create curiosity and the perception that I'm better and worth the investment (and we are better but they don't know that until they give us a try).

One reason for the packaging and higher price is that the coffee drinkers I'm aiming for are only the 5% to 10% who really care about coffee and want something better (understand that in Ireland, tho' it is changing, instant coffee is still the biggest seller--the opposite of the U.S. market).

Specifically to pricing, since I'm in so many outlets, I keep it simple and every coffee is the same price. I make a few extra pennies on some, lose on others, and figure it balances out. When we offer Limited Edition Small Crop coffees we charge a premium in accord with the premium price we paid for the beans.

 

[John P]

Bardo,

So in essence, you are only competing against yourself.

Take a look nationally familiarize yourself with micro-roasters in your region or elsewhere in the US and give yourself an honest assessment. Price within the same ballpark, maybe a touch less until you establish a name and reputation in your area. If you need to err, err on the high side and have confidence in what you are doing.