What kind of markdown... pricesheet... to restaurant

[bostonH]

Hi,

I work at a small coffee roasting company. Until now we''ve only sold small amounts (12 oz up to a few pounds) at a time to individual customers. What sort of markdown should I be looking to offer as I make up my pricesheet for a restaurant that is interested in serving our coffee? thanks!

 

[davidsbiscotti]

Hi bostonH -

I think that 25% is a good markdown from your retail prices.

Are you in Boston? I'm in Berkshire County, Mass.

Welcome to Coffeeforums. Pull up a chair and have a look around the forum a bit. You will find some captivating information in here related to the coffee industry. I've considered entering a disclaimer to all of my posts, as I am not a coffee professional. But, it's a fun place to be a member for sure.

 

[berlin]

hello,

why are you marking down?

greetings

 

[davidsbiscotti]

I would assume the restaurant would fall into a bulk wholesale category and be a consistent customer?

 

[bostonH]

I would assume the restaurant would fall into a bulk wholesale category and be a consistent customer?

Yeah exactly... basically figuring out the best way to determine the markdown for wholesale amounts ie 10, 50, 100lb weekly instead of a pound or 2

 

[davidsbiscotti]

Those who retail your product will have varying markups from your wholesale price to them.
Reasonable markups could be anywhere from 10% - 50%.
Unreasonable markups (my opinion) will be from 60% up to 100%.

By wholesaling to them at 25% below your retail, it allows them to add a reasonable retail markup of 35%.

 

[davidsbiscotti]

I should point out that my figures are based on selling wholesale to a retailer.
A restaurant doesn't use the kind of markups that I explained, but your wholesale price to them could fall in the same price level/category.
They of course would mark up your product significantly more than a retailer, to include their services to their customer.

 

[bostonH]

Thanks for the replies.

Yes, I'm in Boston. Do you know a lot of coffee people in the New England area davidsbiscotti?

Yeah, I decided to mark down based on quantity similar to a wholesale-retailer arrangement because they will be ordering often and in large quantities. They accepted to proposed price sheet so things are looking good...

 

[davidsbiscotti]

Congrats on the restaurant account!

I'm new to the world of gourmet coffee, but have met a few roasters in New England.

Actually, a long time member of this forum, ElPugDiablo is in Connecticut and is all too familiar with the coffee business in Mass. Maybe he will chime in on any local questions you might have regarding New England coffee scene.