Hide

Welcome to Steepster, an online tea community.

Write a tea journal, see what others are drinking and get recommendations from people you trust. or Learn More

wholesale prices vs retail prices?

Question to all you wise people out there that are buying teas wholesale and then selling them retail. Do you mark up each tea the same % or all different? Do you retail your teas for the same price as the company you bought them for? For example:
you as a retail customer can go to “tea company” and buy irish breakfast for 8.95 for a 3 oz tin. now if the “tea company” sells wholesale/private label to you the “other tea company” for 4.95 for a 3 oz tin do you then resell it at 8.95 or do you go in lower or higher.

I am seeing with some companies they are upping their retail costs all different. Some at 30% and then all the way up to 60% (which seems crazy). I would think people would want to make it easy on themselves as biz owners and just say I mark it all up by BLANK % (all the same)…

anyone have experience, ideas, thoughts, complaints, or happy thoughts on this subject?

10 Replies
Cofftea said

Hm… can’t really offer too much on this topic except for it really irks me when I discover I can get a certain tea for much cheaper (total cost: price of tea + shipping) somewhere else. Inflated prices, even if it’s just a few teas, makes me less likely to buy from the inflated company even if the other teas are more fairly priced. Do research on your competition and you’ll be fine.

Coffeetea i SO agree!! I understand people making money but marking things up so much that the customer wants to cry is not cool. I am with you, I hate finding a tea buying it then seeing pretty much the same exact tea for $$ less. I want good tea for cheap both as a business owner and a consumer! If you pay too much for something and know you got ripped off the tea does not taste good lol.

Cofftea said

Cough… Rishi… Cough. lol

Login or sign up to post a message.

umm, hate to be the one to rain on this one, but: good tea for cheap takes precious bucks out of farmers pockets, in places that desperately need economic opportunities. I have a tea business, I blend and wholesale various teas with herbs and spices, and my mark-up is low, yet my tea prices are high because I am a stickler for Fair-Trade, Organic Teas and refuse to work with tea sources who don’t adhere to respectful trade practices, which isn’t easy. As a small producer, I pay some of the highets prices for bulk tea out there, but know I’m supporting good business, while massive companies are getting crappy tea, putting it in fancy tins, and selling the heck out of it, which is business as usual. It’s like coffee and chocolate, one of the economic commodities in the world that depends on us savvy, conscientious consumers to buy good quality. Ok, off my soap-box. It’d been awhile since I’d been it steepster. Forgot how much I these discussions!

oh dont get me wrong I think everyone for sure should be getting fair-trade organic teas whenever possible. The farmers for sure need our support, what Im more talking about is us as business people marking it up from what we pay. I think it is rediculous to mark up 50-60 % + that is all im saying. Not at all condoning paying the farmers cheap, Im completely with you on this one Melissa :). When I have a facility and the whereworthall to blend my own teas I will be just as stickler as you :). I hope to find a partner in the tea business that feels the same and wants to do this with me :).

Login or sign up to post a message.

For me there is no fixed formula for mark-up. I basically taste every tea we have, and the price is based on both the supplying cost and how good it tastes. Sometimes if a tea price increases from the producer’s end, we may maintain the mark-up and increase the price. But if the price raise is controllable, we would rather reduce the mark-up and maintain the same price, so not to risk disappointing returning buyers.

Sometimes I would add a note next to a very unique product, “future price is subject to adjustment based on rarity”. This rarely happens. But if the supply is exhausted for a unique tea, mostly puerh or oolong, from a specific year, the product will be marked up more.

thanks Gingko , this helps :)

Login or sign up to post a message.

We get most of all our teas from the producer. But some accessories products, as well as factory products of puerh may not be unique (although I really try my best to avoid selling puerh or accessories that are also sold elsewhere in US, because I think it’s unnecessary competition). When the products are possibly sold elsewhere, I do appreciate communicaiton and suggestions from the buyers. Sometimes when a buyer told me something is sold for less elsewhere, I will try to do a comparison. If the products are similar but sold for less elsewhere, I will consider either reduce the price or discontinue that product.

Overall I don’t think sellers must compete against each other. To me, being happy with one’s own niche is more important than having a competitive edge based on low price or fancy marketing.

Login or sign up to post a message.

elemental said

There are a lot of things that have to go into the pricing of ANY product, beyond simply the wholesale price. There are the unavoidable expenses of simply “doing business”, which have to be recouped – or you won’t be in business very long. Product cost, shipping costs (in and out), import duties, packaging and other (expensive) printed materials, stocking and spoilage, advertising (Google/Bing take $.90 every time someone clicks on your ad), web site updates and maintenance, web hosting, shopping cart service, credit card processing fees, sales tax, state and federal income tax, state and local business tax, business property tax, computer equipment, software, accounting services, unemployment tax, social security tax, office supplies, phone bills, internet access, business bank account fees, utility charges, rent/mortgage charges and real estate tax if you are brick and mortar — and if you have employees, this is only the start. I could go on, but I think you get the point.

You can’t simply buy widgets, mark them up 30% and call it profit. It’s a business — and the truth is that it takes a lot of hard work to be a small business and STAY IN BUSINESS these days. And it is getting harder all the time.

I don’t try to “compete” with other vendors on individual items. A tea that is selling for half the price of yours could be 6 years old and tasteless — It all looks the same on the Web. I know what my costs are and I know what my expenses are. I do my best to price my products fairly, and give my customers the quality that they expect and deserve. We have a lot of regular customers who have been with us for 3-4 years — and that is the real reward for me.

The only way to learn is to jump in, do your best — and see if you float. Many don’t.

elemental- that i so true and very well put. Thank you so much for all your impute, sometimes I forget about all that stuff when thinking of just the consumer part of it all. Hats off to all small business people out there and I say if you can always buy small local business, help all us out!

Login or sign up to post a message.

Login or sign up to leave a comment.