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Permalink Reply by Mike McGinness on January 1, 2011 at 7:07pm

Cost average with brackets so minimum 25 cent increment and all increments multiple of 25 cents.

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Permalink Reply by Bryan Wray on January 1, 2011 at 9:01pm

In more detail...

 

If the bag retails for $10-$14 it's _____ ($2.25 works well for an 8oz for us in our demographic)

If the bag retails for $15-$17 it's _____ ($2.50 for us)

If the bag retails for $18+ it's _____ ($2.75+)

 

Costs increase as it makes sense, i.e. you won't be getting an Esmeralda 8oz for $2.75 at our shop, lol.

 

-bry

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Permalink Reply by Dennis McQuoid on January 1, 2011 at 9:11pm

Thanks guys. That's helpful.

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Permalink Reply by Jay Caragay on January 1, 2011 at 10:22pm

Our prices fluctuate depending on our costs and other factors - and this can change weekly.  Have a look at our current menu:

 

http://sprocoffee.com/hampden/home.html

 

Click on the menu to download the PDF.

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Permalink Reply by Dennis McQuoid on January 1, 2011 at 10:46pm

Jay, you're either visiting Hawaii or you're an insomniac. Thank you for the link. What is the difference between the $4.00 price vs $1.50 oz for Nigusie?

Jay Caragay said:

Our prices fluctuate depending on our costs and other factors - and this can change weekly.  Have a look at our current menu:

 

http://sprocoffee.com/hampden/home.html

 

Click on the menu to download the PDF.

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Permalink Reply by Jay Caragay on January 2, 2011 at 9:21am

Dennis-

One never really sleeps when one owns his own company!

 

The difference between the two prices for the Nigusie is the main price ($4.00) is the price for a 12 ounce cup.  The secondary price ($1.50) is for whole bean by the ounce.

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Permalink Reply by Joseph Plaugher on January 9, 2011 at 9:04pm

in my experience we set an ideal profit margin, say 75% on average, and try to price everything to that margin. It doesn't work for some menu items sometimes, i.e. pricing a 16 oz pour over at over $2 when all the other 16 ozers in town are $1.85- in which case you adjust that item down .15 or .20 (these prices were before recent inflation.) Using your ideal profit margin as a base point can work well.

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Permalink Reply by Dennis McQuoid on January 9, 2011 at 9:57pm

Thanks Joseph.

Joseph Plaugher said:

in my experience we set an ideal profit margin, say 75% on average, and try to price everything to that margin. It doesn't work for some menu items sometimes, i.e. pricing a 16 oz pour over at over $2 when all the other 16 ozers in town are $1.85- in which case you adjust that item down .15 or .20 (these prices were before recent inflation.) Using your ideal profit margin as a base point can work well.

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Permalink Reply by Jay Caragay on January 9, 2011 at 11:26pm

Joseph-

 

With that kind of reasoning, I hope you're buying the same coffee as the other places in town.

 

Joseph Plaugher said:

in my experience we set an ideal profit margin, say 75% on average, and try to price everything to that margin. It doesn't work for some menu items sometimes, i.e. pricing a 16 oz pour over at over $2 when all the other 16 ozers in town are $1.85- in which case you adjust that item down .15 or .20 (these prices were before recent inflation.) Using your ideal profit margin as a base point can work well.

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Permalink Reply by Joseph Plaugher on January 10, 2011 at 6:53am

I'm just saying you need to adjust for the demographic and local competition, just as Bryan said, "$2.25 works well for an 8oz for us in our demographic." Take a look at this article by Bruce Milletto http://espresso101.com/newsletter/1926
Notice the first bulleted paragraph.

I understand what you mean. If you're bringing in the best coffee from around the world (and roasting and brewing it well) you are justified in charging higher prices then the "cup a joe" coffee house down the road.

Jay Caragay said:

Joseph-

 

With that kind of reasoning, I hope you're buying the same coffee as the other places in town.

 

Joseph Plaugher said:

in my experience we set an ideal profit margin, say 75% on average, and try to price everything to that margin. It doesn't work for some menu items sometimes, i.e. pricing a 16 oz pour over at over $2 when all the other 16 ozers in town are $1.85- in which case you adjust that item down .15 or .20 (these prices were before recent inflation.) Using your ideal profit margin as a base point can work well.

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Permalink Reply by Jay Caragay on January 10, 2011 at 7:06am

Joseph-

I agree that you've got to position yourself to your demographic.  However, we're moving beyond the simplistic: "Scottsdale gets this and Nebraska gets that" kind of approach.  

 

If your intention is to provide another coffee experience on par with the average shop in your area, by all means you should price accordingly.  If the local average is $2.15 per cup then your average price should be right there as well.

 

However, if you take that approach you are best advised to utilize similar ingredients because the smart operators (and I'm presuming that your competition are smart operators) are basing their pricing off of their costs - and if your costs are higher, your profit is less and it becomes more difficult for your company to survive and prosper.

 

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