The job of a coffee farm is to plant the coffee bean and wait until it sprouts into a cherry. Doka is the best example of a coffee farm that we visited. Their selling can differ compared to others slightly. Since Doka farms the beans some are higher quality which would cause them to be more expensive. Also, they can change the price based on buyer. Some buyers could have a better relationship with the farm, and therefore getting the beans for cheaper. Also, how well the growing season is could affect the price of the bean. When there is more output, the price will tend to drop and vis versa. This has made me understand that the selling of coffee isn’t that different from other selling, it is all based supply and demand.
This is where the bean goes to get cleaned and dried. The price that coffee mills tends to be a tad bit more expensive since they try to make profit. They have already had to buy the beans, so they need to charge more for it, in order for it to make sense to invest in coffee. As well, the size of what roasters are buying can influence the selling price. Typically, if It is a larger order the price will go down a little bit. From the coffee mills, it showed me and bettered my understanding of the fact that coffee farms can influence the price of coffee drastically.
Unless the coffee roasters grow their own cherries, they usually buy from the coffee mills. After this they roast the coffee to meet the demand of retailer and wholesalers. They tend to roast the exact amount they need, because if they don’t they end up losing money and wasting product. They tend to charge a fair amount. There are many roasters out there and it isn’t worth the risk of losing a customer because they raise the price.
Retail stores try to sell coffee based on the fairest price. The cheaper they price the more customers they will get. They have to avoid charging to cheap because then they will lose money. If they charge to high then they risk losing customers. It is all about finding the equilibrium price. The price that meets customers’ demands but also generates a profit. If this is done correctly then the store can be extremely successful. Starbucks and Dunkin Donuts are perfect examples. They provide quality products for relatively low prices, that bring the customers back again and again.
Customers essentially have all the power in regard to selling throughout the supply chain. They will only buy products if they think the price is fair. This relates in all stages, not just the final product. Coffee mills will buy beans from a different farm if they feel that they are being overcharged. Just like coffee roasters will buy beans from different mills if they don’t agree with the price our quality. Ultimately, I have learned that the selling process doesn’t really change significantly throughout the supply chain or in other industries.