Unlocking Value: How to Get More From Your Coffee Supplier
When negotiating with a coffee supplier, focusing solely on a lower price per kilo is easy. However, many additional benefits can provide value far beyond a few dollars saved on beans.
From flexible payment terms and staff training to marketing support and e-commerce solutions, modern cafe owners have the opportunity to negotiate a growing range of benefits that can enhance their business operations and customer experience. Here are more than 35 different ways you can get a better deal in this highly competitive market!
1. Financial Benefits
– Flexible Payment Terms: Request extended payment terms, such as net 60 or net 90 days, to improve cash flow. – Volume Discounts: Negotiate discounts based on the volume of coffee purchased, reducing the cost per unit – this could be calculated on purchases over a month or quarter. – Consignment Stock: Ask if the supplier can provide coffee on consignment, allowing you to pay only for what you sell. – Bulk Purchasing Discounts: Negotiate bulk discounts for cafe and retail coffee purchases to improve profit margins – this could be an agreement to always purchase, say, 30kg per delivery. – Free or Discounted Cups and Packaging: To save costs, request free or discounted branded, eco-friendly cups, lids, or other packaging. – Sponsorship for Events or Promotions: Ask the supplier to sponsor events or promotions at your cafe, reducing your marketing costs. Eg at a fundraising event where you donate $2 per coffee sold to a non-profit cause, the coffee and milk suppliers could donate products.
2. Product and Supply Chain Flexibility
– Exclusive Supply Agreements: Secure exclusive rights to certain coffee blends or origins to differentiate your cafe – not sold by competitors within a certain distance. – Custom or Exclusive Blends: Work with the supplier to create a unique coffee blend that is exclusive to your cafe. – Access to New Products: Gain early access to new coffee blends, single-origin beans, or products before they are released to the wider market. Value here if your clientele are discerning coffee drinkers, less so if they just want good standard coffee. – Trial Products: Request free samples of new products like cold brew, nitro coffee, or specialty beans before making a purchase. – Pre-Packaged Beans: Ask the supplier to provide pre-packaged coffee beans or ground coffee in different sizes that are ready for retail sale in your cafe. – Grinding Options: Offer different grind levels for retail coffee (espresso, filter, French press), and request supplier support for pre-grinding if needed.
3. Operational and Quality Support
– Free Equipment or Servicing: Secure free or subsidised espresso machines, grinders, or brewing equipment with regular servicing. This is a common expectation, especially when you’re doing volume, but the leasing cost that the supplier pays for a machine will come back on you in one form or another. You have much more leverage to negotiate prices and deals when you have your own equipment. – Extended Equipment Warranty: Ask for extended warranties on any equipment provided to reduce long-term risk. Loaner machines to cover repairs could also be part of this. – Quality Assurance: Ensure regular quality checks and guarantees on the freshness and flavour profile of the beans. – Advanced Equipment Trials and Training – access to equipment such as hot milk dispensing machines, weigh-and-tamp grinders and all-in-one machines that can reduce labour while maintaining quality.
My negotiation tips: go into the negotiations knowing what you’re looking for. I would suggest thinking about the following before your initial meetings:
1. What is your current weekly volume? This is usually based on a 6-8 week average. This helps give the supplier an accurate picture and you more room to negotiate. 2. What are you willing to invest? Are you open to purchasing equipment, or are you expecting them to supply everything Free On Loan? Remember, nothing is free. The cost of equipment will be built into your price, so make sure you are clear with what you want included versus what you can pay for upfront and save $$ ongoing. 3. What does your customer want? This doesn’t always align with your preferences. Do they want a light, medium or dark roast? Do they drink more black or milk coffee?
Your coffee supplier should be offering ongoing training and support, even if you are regional. Ask how many times they will visit, how many trainings will be included, if you have access to other events and education. I highly suggest to talk to a few roasters and go with who aligns best with your business. Happy brewing! Laura Martin, coach at Foodie Coaches
4. Marketing and Brand Support
– Marketing Support: Request co-branded marketing materials, signage, loyalty programs, or joint coffee-tasting events. Make sure that the branded product doesn’t overwhelm your branding – this happens too often! – In-Store Promotional Materials: Request point-of-sale materials, such as posters, shelf displays, or signage, to highlight the retail coffee products. – Sampling Programs: Arrange for free coffee sampling events, supported by the supplier, to let customers taste retail beans or ground coffee before buying. – Co-Branded Merchandise: Ask for co-branded merchandise (such as reusable cups or storage tins) to sell alongside the coffee products, enhancing customer experience. – Retail Display Support: Request attractive retail displays and promotional materials to help showcase coffee beans in your cafe, boosting visibility and appeal. – Online Marketing Support: Request assistance with digital marketing strategies, including social media promotions, SEO, and online advertising campaigns to boost online sales. – Product Photography and Content Creation: Suppliers can provide high-quality images and product descriptions for your online store, essential for driving e-commerce sales. – Collaborative Promotions: Work with suppliers to create joint promotions or bundles, marketed both in-store and online, increasing the perceived value of purchases.
5. Sustainability and Ethical Sourcing
– Sustainability and Certification: To appeal to eco-conscious customers, request ethically sourced coffee from sustainable and certified farms like Fair Trade or Rainforest Alliance. – Sustainability and Certification Information: Use supplier-provided sustainability certifications and information to appeal to environmentally conscious consumers, both in-store and online. This could include photos and written material that could be used on the cafe’s own blog or social media posts.
6. Logistics, Delivery Support & E-commerce
– Logistics and Delivery Flexibility: To help manage stock levels effectively, negotiate for more flexible delivery schedules or reduced shipping costs. – E-commerce Platform Assistance: Ask for help in setting up an online store or enhancing your existing e-commerce platform, with suppliers offering technical support or advice. – Training on E-commerce Best Practices: Suppliers can provide training on selling coffee online, covering customer engagement and order management strategies. – Subscription Model Support: Suppliers can help set up a subscription model for regular coffee deliveries, providing a stable revenue stream and boosting customer retention. – Dropshipping Services: Some suppliers may offer dropshipping options, handling the storage, packaging, and shipping of coffee beans directly to your customers.
7. Sales and Staff Training
– Staff Training and Support: Negotiate for regular barista training sessions or workshops to improve staff skills. This training could be held at your venue or at the supplier’s premises. – Retail Sales Training: Negotiate for supplier-led staff training on how to sell retail coffee effectively, focusing on origin, flavour notes, and brewing tips. – Coffee Knowledge Materials: Request educational materials, such as brochures or pamphlets, to help staff and customers understand the coffee’s origin, tasting notes, and brewing methods. – Access to industry events or conferences, which can be valuable for staff and management development.
8. Customer Loyalty and Analytics
– Retail Loyalty Program: Partner with the supplier to create a loyalty program for retail coffee purchases, offering discounts or freebies for repeat customers. – Customer Data Insights: Request access to customer data analytics from the supplier to better tailor your marketing efforts and improve online sales targeting. This could be from their own sales across different areas and demographics or industry research that they pay for.
9. Community Engagement Through Coffee
– Local Event Partnerships: Negotiate for the supplier to co-sponsor or participate in local events, such as food festivals, farmers markets, or community fairs. This could include providing free coffee samples, setting up joint booths, or supporting local charities through these events.
– Educational Initiatives: Arrange for the supplier to conduct public workshops at your cafe on topics like brewing methods, coffee origins, or sustainability practices. This could extend to supporting barista training programs for local hospitality students. – Sustainability and Local Produce Collaboration: Work with the supplier on local environmental projects, such as collecting used coffee grounds for community gardens. Also, consider creating special blends incorporating local produce and developing connections with local businesses. – Arts and Culture Support: Partner with the supplier to support local cultural events, art exhibitions, or music performances at your cafe. This could include themed coffee creations or joint sponsorships, positioning your cafe as a cultural hub in the community.
You can grow your cafe’s operations, customer experience, and local reputation by leveraging these many different benefits, from financial incentives to equipment innovation and community support. A good supplier relationship is a two-way street – be prepared to offer loyalty and promotional opportunities in return. Don’t just settle for cheaper beans – aim for a comprehensive partnership that helps your venue thrive in all areas of modern business.
When negotiating with a coffee supplier, focusing solely on a lower price per kilo is easy. However, many additional benefits can provide value far beyond a few dollars saved on beans.
From flexible payment terms and staff training to marketing support and e-commerce solutions, modern cafe owners have the opportunity to negotiate a growing range of benefits that can enhance their business operations and customer experience. Here are more than 35 different ways you can get a better deal in this highly competitive market!
1. Financial Benefits
– Flexible Payment Terms: Request extended payment terms, such as net 60 or net 90 days, to improve cash flow.
– Volume Discounts: Negotiate discounts based on the volume of coffee purchased, reducing the cost per unit – this could be calculated on purchases over a month or quarter.
– Consignment Stock: Ask if the supplier can provide coffee on consignment, allowing you to pay only for what you sell.
– Bulk Purchasing Discounts: Negotiate bulk discounts for cafe and retail coffee purchases to improve profit margins – this could be an agreement to always purchase, say, 30kg per delivery.
– Free or Discounted Cups and Packaging: To save costs, request free or discounted branded, eco-friendly cups, lids, or other packaging.
– Sponsorship for Events or Promotions: Ask the supplier to sponsor events or promotions at your cafe, reducing your marketing costs. Eg at a fundraising event where you donate $2 per coffee sold to a non-profit cause, the coffee and milk suppliers could donate products.
2. Product and Supply Chain Flexibility
– Exclusive Supply Agreements: Secure exclusive rights to certain coffee blends or origins to differentiate your cafe – not sold by competitors within a certain distance.
– Custom or Exclusive Blends: Work with the supplier to create a unique coffee blend that is exclusive to your cafe.
– Access to New Products: Gain early access to new coffee blends, single-origin beans, or products before they are released to the wider market. Value here if your clientele are discerning coffee drinkers, less so if they just want good standard coffee.
– Trial Products: Request free samples of new products like cold brew, nitro coffee, or specialty beans before making a purchase.
– Pre-Packaged Beans: Ask the supplier to provide pre-packaged coffee beans or ground coffee in different sizes that are ready for retail sale in your cafe.
– Grinding Options: Offer different grind levels for retail coffee (espresso, filter, French press), and request supplier support for pre-grinding if needed.
3. Operational and Quality Support
– Free Equipment or Servicing: Secure free or subsidised espresso machines, grinders, or brewing equipment with regular servicing. This is a common expectation, especially when you’re doing volume, but the leasing cost that the supplier pays for a machine will come back on you in one form or another. You have much more leverage to negotiate prices and deals when you have your own equipment.
– Extended Equipment Warranty: Ask for extended warranties on any equipment provided to reduce long-term risk. Loaner machines to cover repairs could also be part of this.
– Quality Assurance: Ensure regular quality checks and guarantees on the freshness and flavour profile of the beans.
– Advanced Equipment Trials and Training – access to equipment such as hot milk dispensing machines, weigh-and-tamp grinders and all-in-one machines that can reduce labour while maintaining quality.
4. Marketing and Brand Support
– Marketing Support: Request co-branded marketing materials, signage, loyalty programs, or joint coffee-tasting events. Make sure that the branded product doesn’t overwhelm your branding – this happens too often!
– In-Store Promotional Materials: Request point-of-sale materials, such as posters, shelf displays, or signage, to highlight the retail coffee products.
– Sampling Programs: Arrange for free coffee sampling events, supported by the supplier, to let customers taste retail beans or ground coffee before buying.
– Co-Branded Merchandise: Ask for co-branded merchandise (such as reusable cups or storage tins) to sell alongside the coffee products, enhancing customer experience.
– Retail Display Support: Request attractive retail displays and promotional materials to help showcase coffee beans in your cafe, boosting visibility and appeal.
– Online Marketing Support: Request assistance with digital marketing strategies, including social media promotions, SEO, and online advertising campaigns to boost online sales.
– Product Photography and Content Creation: Suppliers can provide high-quality images and product descriptions for your online store, essential for driving e-commerce sales.
– Collaborative Promotions: Work with suppliers to create joint promotions or bundles, marketed both in-store and online, increasing the perceived value of purchases.
5. Sustainability and Ethical Sourcing
– Sustainability and Certification: To appeal to eco-conscious customers, request ethically sourced coffee from sustainable and certified farms like Fair Trade or Rainforest Alliance.
– Sustainability and Certification Information: Use supplier-provided sustainability certifications and information to appeal to environmentally conscious consumers, both in-store and online. This could include photos and written material that could be used on the cafe’s own blog or social media posts.
6. Logistics, Delivery Support & E-commerce
– Logistics and Delivery Flexibility: To help manage stock levels effectively, negotiate for more flexible delivery schedules or reduced shipping costs.
– E-commerce Platform Assistance: Ask for help in setting up an online store or enhancing your existing e-commerce platform, with suppliers offering technical support or advice.
– Training on E-commerce Best Practices: Suppliers can provide training on selling coffee online, covering customer engagement and order management strategies.
– Subscription Model Support: Suppliers can help set up a subscription model for regular coffee deliveries, providing a stable revenue stream and boosting customer retention.
– Dropshipping Services: Some suppliers may offer dropshipping options, handling the storage, packaging, and shipping of coffee beans directly to your customers.
7. Sales and Staff Training
– Staff Training and Support: Negotiate for regular barista training sessions or workshops to improve staff skills. This training could be held at your venue or at the supplier’s premises.
– Retail Sales Training: Negotiate for supplier-led staff training on how to sell retail coffee effectively, focusing on origin, flavour notes, and brewing tips.
– Coffee Knowledge Materials: Request educational materials, such as brochures or pamphlets, to help staff and customers understand the coffee’s origin, tasting notes, and brewing methods.
– Access to industry events or conferences, which can be valuable for staff and management development.
8. Customer Loyalty and Analytics
– Retail Loyalty Program: Partner with the supplier to create a loyalty program for retail coffee purchases, offering discounts or freebies for repeat customers.
– Customer Data Insights: Request access to customer data analytics from the supplier to better tailor your marketing efforts and improve online sales targeting. This could be from their own sales across different areas and demographics or industry research that they pay for.
9. Community Engagement Through Coffee
– Local Event Partnerships: Negotiate for the supplier to co-sponsor or participate in local events, such as food festivals, farmers markets, or community fairs. This could include providing free coffee samples, setting up joint booths, or supporting local charities through these events.
– Educational Initiatives: Arrange for the supplier to conduct public workshops at your cafe on topics like brewing methods, coffee origins, or sustainability practices. This could extend to supporting barista training programs for local hospitality students.
– Sustainability and Local Produce Collaboration: Work with the supplier on local environmental projects, such as collecting used coffee grounds for community gardens. Also, consider creating special blends incorporating local produce and developing connections with local businesses.
– Arts and Culture Support: Partner with the supplier to support local cultural events, art exhibitions, or music performances at your cafe. This could include themed coffee creations or joint sponsorships, positioning your cafe as a cultural hub in the community.
You can grow your cafe’s operations, customer experience, and local reputation by leveraging these many different benefits, from financial incentives to equipment innovation and community support. A good supplier relationship is a two-way street – be prepared to offer loyalty and promotional opportunities in return. Don’t just settle for cheaper beans – aim for a comprehensive partnership that helps your venue thrive in all areas of modern business.
Check the other useful blog posts on the Foodie Coaches website…
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