price increase explanation
Hello Valued Customers,
We wanted to take a moment to explain the sudden price increases on the website and Amazon. The most important thing we want you to know is that it was absolutely necessary due to market prices and forces beyond our control. These increases only reflect actual cost increases to purchase the green beans. We have not increased our profit. We have actually decreased our profit per bag and we are scrambling to find ways to lower costs elsewhere so that we do not have to raise prices further.
So what's going on?
The first thing to know is that coffee is a commodity and trades on the future's market. The price is fluid depending on market conditions. Right now, the market is very active and speculative and is driving prices upward. There is also a drought in Brazil and Vietnam affecting crops leading to more market instability.
The second thing to keep in mind is that coffee is a crop and has a season of growing, ripening, being harvested and then processed and dried and shipped. There is a finite supply each season each year.
When a crop arrives for distribution, we must determine how much green coffee we will need for our business based on projected sales for the next 3 months to a year (depending on the coffee and availability) Then we reserve the amount of bags needed to supply coffee to our customers.
In steady market times, this process is rather straight forward with predictable price patterns. Coffee prices bounce up and down within a range based on the success of the crop size, and other varied conditions such as shipping, and climate conditions for that year.
In general, since the Covid epidemic, prices of green coffee have increased about 50%.
Recently, in the last month or two, the coffee market has made a another drastic price increase. Many of our coffees have increased another 50-70%. yes. truthfully. It is crazy. And, unfortunately, the Indonesian coffees, which are low acid, are the most expensive coffees we are purchasing at the moment.
This price increase is further compounded by the fact that coffee shrinks approximately 20% during the roasting process. Meaning, if we put 10 pounds into a roaster the coffee will weigh 8 pounds after roasting. But, we need to base the coffee price on the original 10 pounds that we paid for. As coffee prices increase, the 20% increases exponentially. For example: if a coffee costs $1.00 unroasted it would cost $1.20 after roasting. If the coffee costs $3.00 unroasted it would cost $3.60 after roasting and so on.
On Amazon, there is another compounding issue. One of the fees we are charged to sell on Amazon is 8% if the retail price is under $15.00 If the retail price is over $15.00 that fee increases to 15%. So we need to further increase the price to cover the 7% increase in fees. we know, complicated.
We hope this helps you understand why our prices have increased so quickly. We are just trying to cover costs. We intend to lower prices as soon as we reserve coffee at a lower price.
We are a small family business. Lucy Jo's Coffee is two parents, two daughters (who work when they can-college and high school) and 4 full-time employees. That's it. We are a small group and very efficient with our time and labor. We pay our employees a fair wage with vacation days and sick leave and a 401K. We are all appreciative of your support and strive to keep our customers satisfied with top notch coffee and quality service.
WAYS TO SAVE/WAYS TO HELP: We encourage our customers to use the write-in discounts and buy multiple bags at a time. We can offer a discount on multiple bags because we save money on shipping that we pass back to you. And we save staff time processing one order with multiple bags vs. multiple orders with 1 bag. We also save on shipping supply costs putting more than one bag in an box.
We also encourage you to use our subscription plan if you want consistent coffee delivery without reordering each time.
We are discouraging you from using the subscription plan just to get a discount and then cancel because we pay added % fees to the subscription service for each order.
We also encourage you to join the email list to get our flash sales with the best savings.
We hope this explains the situation better. There are numerous coffee articles out there presently discussing the rising coffee prices if you care to take a stroll down that lane with your free time.
be well,
Shelley and Alan Monder
