Fair Wholesale Pricing
What is a fair rate charge customers for wholesale coffee? Is there a standard rate to charge my customers? Like Cost + an approximate percentage? I don't want to over or undercharge for my products. Any thoughts or reccommendations would be helpful.
Replies to This Discussion
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Permalink Reply by Sandy Hon on
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what do others in your area charge? Benchmarking is a great tool and while you may get a ton of answers on this forum, prices vary from city to city, region to region....
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Permalink Reply by Jay Caragay on
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A "fair rate" to charge your customers is the maximum of what they're willing to pay. I disagree with Sandy to look at other companies and price according to their prices. Your costs can and probably will be vastly different than theirs and it could be suicide to price according to them.
Figure out your costs and charge the maximum for the greatest profit. Otherwise, why bother?
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to clarify- i do not suggest pricing the same as your competitors. as a matter of fact, our prices are higher than our competition. Yet as Jay suggests, our customers are willing to pay the premium due to our location on a college campus where parking is tight. In return, we offer a consistently great product.
However, benchmarking is a common business practice and how would a start up know what the customer is willing to pay less he/she determines what the average market price is? how is one to determine what the market price is unless he check out the market? never underestimate your competitor. check out what they're doing, and do it better. much better. not cheaper....but better.
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Permalink Reply by John P on
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Paul,
You ask about wholesale coffee. Are you roasting your own?
Think about selection and quality of your coffee.
Labor for roasting weighing, bagging. Skill level of your roasting. Cost of bags, labels, and...
It's not about "fair". Fair means you're not confident in what you are doing. It's YOUR coffee... based on how you see yourself in the marketplace, you should just use all the information before as a guide to get you there, and then charge what you believe your worth.
Sandy has it right, "...do it better. much better. not cheaper....but better."
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