When launching your coffee roasting business, understanding wholesale and retail pricing and strategy is a must! Read on to learn about our suggested best practices
Have you ever considered selling your roasted coffee online, in-store, or setting up a wholesale coffee business? Setting up a wholesale coffee program is a great way to utilize the full value of your roaster. Not only are you able to realize brand-new revenue from exciting channels - like online sales and subscriptions - but you also insulate your business from some risk when your retail operation is unable to operate or things are slow.
While it can seem like a big undertaking, it’s fairly straightforward if you break it down into steps. Here are a few key things to consider when starting off with wholesale and e-commerce for your roasted coffee:
- Cost and pricing
- Where to sell and what to expect
- Starting simple
How do I determine cost and pricing for a wholesale business?
A typical wholesale coffee menu includes pricing for both 5lb bags and 12oz retail bags. Often, the 5lb bags are priced by the pound, and 12oz retail bags are priced by the bag.
Here is a typical cost breakdown for a pound of coffee that would be ready to sell to a prospective wholesale customer:
| Typical Cost Breakdown for Wholesale | |
| Average Green Coffee Cost | $4.50 |
| Roasting (Shrinkage 18%) | $0.72 |
| Label | $0.75 |
| Bag | $0.76 |
| Box ($1.5 box /per lb) | $0.03 |
| Shipping to Customer | $0.50 |
| Total Cost | $7.26 |
| Average Wholesale Price per lb | $12.00 |
| Net Profit | $4.74 |
| Profit Margin | 39.50% |
Here is a typical wholesale menu with both per lb for “bulk” coffee pricing, packaged in 5lb bags, and 12oz retail bags with the recommended retail price listed :
| *Bulk is packaged in 5lb Bags | Wholesale | Wholesale | Retail | |
| Current Menu | Tasting Notes | Bulk Per lb | 12oz Bag |
RRP for 12oz bag
|
| The Americas | ||||
| Brazil Parceiros do Cafe | Chocolate, Caramel, Nutty | $11.50 | $9.75 | $16.00 |
| Colombia, Magia del Campo | Cherry Compote, Maple, Toffee | $13.00 | $11.00 | $18.00 |
| El Salvador, Lenca | Semi-Sweet Chocolate, Nectarine, Dark Brown Sugar | $12.25 | $10.50 | $17.25 |
| Guatemala, Manos de Mujer | Fudge, Toffee, Plum | $12.75 | $10.75 | $17.50 |
Who to Sell to & What to Expect
Now, you’re roasting your own delicious coffee. You have bags and labels ready to go and a menu to show prospective customers and wholesale partners. What’s next? The next step is reaching out digitally or in person to let people know what you have to offer.
For help getting your store online, check out our post on A Guide to Setting up an Online Coffee Business. For help sharing your online store, check out Marketing + Community.
Aside from individual orders or subscriptions from your online store, typical wholesale coffee relationships include:
- Coffee retailers
- Restaurants
- Hotels
- Office buildings
- Your friend’s start-up
- Your community center
- And so much more!
Finally, the average US non-chain coffee company can expect to serve and sell around 100lbs of roasted coffee per week. When forming these wholesale relationships, be mindful of how much green coffee you’ll need to keep on hand. You’ll want to make sure you can keep up with roasted coffee demand!