Happy New Year all!

Many of you are offering a wide variety of coffees in your shop. Do you have a seperate price for each coffee or do you cost average coffees of similar price range to keep the menu simple? 

We are going to be offering about 8 different Hawaiian coffees in our shop. The price per pound is spread fairly evenly (by a couple dollars per pound) out with the most expensive being double the price of the least expensive.

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

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

Thanks guys. That's helpful.

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.

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.

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.

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.
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.

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.

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.

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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