Wholesale + Retail Coffee Economics + FAQs
Table of Contents
Overview
Pricing Breakdown
Who to Sell to and What to Expect
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 engage with a variety of new revenue-generating avenues, like online sales and subscriptions and stocking your retail shelves, 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 actually fairly straightforward if you break it down into steps. Here are a few key things to consider when breaking into wholesale or e-commerce for your roasted coffee:
- Cost and pricing
- Where to sell and what to expect
- Starting off simple
How do I determine cost and pricing for a wholesale business?
A typical wholesale coffee menu includes pricing for both 5lbs 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 | $4.00 |
| 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 | $6.76 |
| Average Wholesale Price per lb | $11.00 |
| Net Profit | $4.24 |
| Profit Margin | 38.55% |
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 | ||||
| Current Menu | Tasting Notes | Bulk Per lb | 12oz Bag | RRP for 12oz bag |
| The Americas | ||||
| Brazil, Oberon Ayabas | Chocolate, Caramel, Nutty | $10.25 | $8.75 | $16.00 |
| Colombia, Mujeres Cafeteras | Citrus, Grape, Caramel | $11.50 | $10.00 | $17.00 |
| Colombia, Palmichal | Orange, Milk Chocolate, Maple Syrup | $11.00 | $9.50 | $16.50 |
| Honduras, Saturnino Martinez | Marzipan, Milk Chocolate, Honey | $11.25 | $9.75 | $17.25 |
| Peru, Churupampa | Green apple, Toffee, Tamarind | $11.70 | $10.20 | $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!
Here is an article from Daily Coffee News that has some salient points about roasting coffee for the Hospitality Industry. It also talks about what a customer could ask for or require as part of a wholesale coffee relationship. In the current landscape of specialty coffee, there are many “traditional” wholesale outlets. These include coffee shops, and a growing number of “non-traditional” wholesale relationships, like hotels, are emerging every day. Keep that in mind when you are brainstorming who you could potentially sell your coffee to.
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!