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Keeping Track of it All – part 2 of 3

March 22, 2011

This is part two in a three-part series of posts on the need for a good data acquisition and analysis tool for people in the coffee business Read part one.

Part two is about pricing. I don’t know the best way to price coffee, but I’d like to provide a tool that would be of use in helping price things just exactly as you want to, minimizing guesswork. I know of coffee roasters who Do Not Know what their margin is for a given coffee. They have some idea but most definitely not an exact figure. Here are some ideas I’m thinking about that analyze historical data with a focus on pricing.

  • Combine historical COGS and usage data to get a deep understanding of your most and least profitable products – along with how those leaders and losers change seasonally.
  • Allow input of a desired margin to arrive at a retail price for a coffee based on a near-real-time COGS. Know whether that price is sane based on previous years’ pricing.
  • Look at slices of time to discover where sweet spots are. Would it work to raise prices just a little on certain products in anticipation of high demand?
  • Considering some micro lots? In the past were you able to profit adequately from them? Perhaps you’re buying them just to generate interest in your café, and if so how do you price them to cover cost?
  • How much are you spending on storage fees and delivery? Insight into the history of that might help find ways to improve supply chain efficiency.

Extracting this information from a spreadsheet would be pretty tough and very time consuming. We’re here to make life easier by making it easy to get this kind of information from your data. Are these good ideas? What am I missing? I’d love to hear from you.

Next time. Ordering.

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