Roast #19: Mo Money Mo Problems
I have negative problems, which means I create problems.
Edits:
- August 2, 2023: Included pricing details for coffee club (120g / 240g)
- February 26, 2024: Updated coffee club pricing
What a week.
I'm writing to you today to discuss pricing.
For Single Bags:
The pricing model I'm using for single bags is as follows:
(costbeans * 2):
This handles both the costs of the beans and a catch-all for non-bean costs.
Some explicit items the "non-bean" costs cover:
Cost of beans spent for R&D purposes (~ie, 7 pounds were spent just for the Honey Pink Bourbon).
Time spent researching, analyzing, and executing roast profiles
Effort spent selecting the beans — reaching out to exporters, roasting each sample (13 this round), multiple cuppings, and then taking notes to send back to the exporters.
Cost of packaging and materials
Cost of roaster (nowhere near making back the $3000 I invested into my roasting setup)
Cost of electrical power to run everything
I know some of you ask if I'm making money from this, and if you look at the above list, I think you'll get your answer. 🥲
(costbeans * 0.3):
The second part of the above equation is to represent my profit margin. I don't know if this is high or low, but having a 30% profit margin works for now.
For Coffee Club:
The pricing model I’m using for 120g coffee club orders is as follows:
You might’ve noticed that the (costbeans * 0.3) part is removed. The way I see it, customers are buying more beans from me, which deserves a discount.
The pricing model I’m using for 240g coffee club orders is as follows:
It’s double the 120g coffee club price, with an additional discount as you are buying even more beans!
Note, these numbers can (and will) change in the future. Fortunately, my livelihood doesn’t depend on this project, but when it does, then I might have to squeeze more out of my margins.
One change that will come for V5 is the 120g bag (costbeans * 0.3) discount. At the moment, you get more discount getting the 120g than the 240g even though you are buying less. 🥲 I guess I didn’t really think about the discounts relative to each other, just that I wanted a discount for getting the 240g bag.
And that’s how my pricing currently works! If you have any questions or want further details, feel free to DM me (@thoughtfulcoffeenyc)
Appendix:
The content below was originally written for V3 stuff. We are past that now, and the content below is relevant only to V3, so I’m going to treat it as deprecated and historical information.
Past pricing mistake:
If you bought a bag of honey pink bourbon from me for $15 during the roasters event, send me an e-mail (thoughtfulcoffeenyc@gmail.com), and I'll give you a $5 discount for Coffee Club V3. The price of the bag should've been $10 instead of $15.
I derived the $15 number by googling around for other coffee roasters selling that bean then applying their price/gram ratio against my 120g offering (total of ~$18), and then just knocked a few dollars off to make it a cash-friendly number.
Pricing for Coffee Club V3:
I know you are probably wondering how this pricing translates for my stuff. Well, below are the numbers:
If you sum the three different beans, you'll see that the total is $33 for 360 grams. This price is higher than past coffee boxes.
The reasons for this are:
Numbers for last box were set for 80g bags. Moving forward, the amount will be 120g bags (50% more).
The last box only accounted for the cost of R&D for each bean, so it didn’t include any costs for time roasting/research/etc.
The total per pound bean costs for this one ($31) is higher than the last one ($28).
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I hope this post gave you more transparency into how I price things, and why things are priced the way they are.
Thank you’s:
Amy and Cary for hiring me over at Partners. You both gave me the chance to be a barista, and I’ll forever appreciate that.
Gonzalo and the current team at WV Partners for willing to train me, and deal with my barista n00bness.
Ben over at Villager for willing to showcase my coffee at their amazing cafe.
As always, thank you for reading!