Profit Margins Selling Coffee Beans Online

[abeba]

Hello everyone! New here, and I am in the process of creating a website selling whole and grounded coffee to users on Amazon and via our website. I found a roaster who will take care of roasting, labeling, and packaging the coffee for us (doesn't include shipping costs). The beans are roasted in a unique process that provides a certain profile of coffee we are interested in. The quote we received from the roaster was $6.50 per 12 ounce of coffee (same price for all the different blends/skews we are using).

Again, that's including the labels front and back, the 12 ounce package with a valve, roasting the coffee and packaging it. For anyone who is in the coffee business, what are your thoughts on the quoted price? Does it sound reasonable - too high or suspiciously low?

Also, all in-delivered to the customer, we are looking at roughly 3 dollars gross profit per 12 ounce package (after shipping costs and additional fees). What kind of profit margins can one expect on selling coffee online? How does this compare to anyone else who is doing the same?

Thanks in advance for everyone's input!

 

[Mr.Peaberry]

LaVazza is definitely a well known brand...so is Starbucks. Now about the coffee...LaVazza uses Robusta from Indonesia in this blend. If I am to believe what Sweet Maria's has posted as issues with coffee from Indonesia, I would imagine that one reason this blend is a dark roast is to conceal the off tastes in such a way as the average consumer would find that the flavor is in some ways different than Folgers and therefore consider it to be "good coffee". Just about any whole bean coffee that is ground prior to brewing will taste better than Folgers...imho...except of course for very stale beans....this really is bottom of the barrel and is actually part of why coffee producers operate with the help of labor below poverty level. Shame on LaVazza for even offering such substandard product.

 

[PinkRose]

thanks for more detailed info, MP.
I take back the "dare" thing. unfortunately and fortunately, Robusta isn't my thing.

It is always wise to stop and think before you accept a dare. Now-a-days it's okay to reconsider and drop the dare. That way you won't do anything stupid, just because someone dared you to.

In the past, several people on this Forum have learned a hard and disappointing lesson about buying coffee on Amazon. The lesson is: Don't do it.

~ Rose

 

[Musicphan]

Peeps... back to the OP question. $6.50 wholesale/private label is on the lower end of the price spectrum for Specialty Coffee. It really depends on the quality and cupping score of the coffee. Regarding profitability, it really depends on the channel you are selling through and your internal costs. Take a look at Amazon's fees structure before you go too deep into this...

 

[PinkRose]

Hi Rose. what the heck!
I will buy that coffee and make some postings here.
Since I won't lose any money (if it is really bad as Mr.Peaberry says), I will return it anyway.
but it will be interesting for me and for this forum.

anyway, thanks for your kind concern. Rose.

PS: without any risks in life (at least calculated risks), the life would be like drinking distilled water all your life. We certainly would not want that, would we? ha ha ha

Are you old enough to remember the Life Cereal commercial where they say, "Mikey likes it." Mikey was the fussy little eater, and he was a taste tester for the cereal.

You seem to be the Coffee Forum's Mikey.

I hope your experiment turns out to be a pleasant surprise.

 

[EthanChase2184]

I was thinking about doing the same thing. How has it worked out for you?

 

[abeba]

Thanks for keeping things on the original subject Musicphan! And thanks even more for your insight. Amazon fees are expensive, but they also have super cheap shipping costs, and take care of allot of details (customer service calls, logistics, storage,etc). Of course, all this comes with a cost. My profit margins are slim, but so is my over head. I'm still weighing my options, but I wish there was an alternative to Amazon that provided the same benefits but cheaper. Amazon had such a monopoly today it's scary having your business contingent on just one conglomerate.

 

[abeba]

BIC, didn't their business take a hit when they left Amazon? I know of several company's that have amazon drive 70% of their business. To pull out would be suicide. Did they find alternate ways to do business?

 

[PinkRose]

Hello everyone! New here, and I am in the process of creating a website selling whole and grounded coffee to users on Amazon and via our website. I found a roaster who will take care of roasting, labeling, and packaging the coffee for us (doesn't include shipping costs). The beans are roasted in a unique process that provides a certain profile of coffee we are interested in. The quote we received from the roaster was $6.50 per 12 ounce of coffee (same price for all the different blends/skews we are using).

Again, that's including the labels front and back, the 12 ounce package with a valve, roasting the coffee and packaging it. For anyone who is in the coffee business, what are your thoughts on the quoted price? Does it sound reasonable - too high or suspiciously low?

Also, all in-delivered to the customer, we are looking at roughly 3 dollars gross profit per 12 ounce package (after shipping costs and additional fees). What kind of profit margins can one expect on selling coffee online? How does this compare to anyone else who is doing the same?

Thanks in advance for everyone's input!

Hello Ababa,

I'm putting your original post up at the top of the thread so it's easier to see. We got off track a bit. Sorry . . . .

~ Rose

 

[StanleyAckies6]

Thank you for the detailed information about the implementation of coffee! I'm just thinking about getting into this business.

 

[Simona]

Thank you for sharing this information and your experience!