Live data from Hacker News

The cup-of-coffee pricing fallacy

blog.gingerlime.com

81–90 of 102 posts

Re: The cup-of-coffee pricing fallacy

#81
post #47

Earlier quoted context omitted.

> First, the price for a plain old cup of coffee at Starbucks differs from region to region, but it usually normalizes at around $1.80 (taxes included). Refills are $0.52. That sounds really cheap, or what's a 'plain old cup of coffee' - does Starbucks sell filter coffee over there?

Starbucks sells filter coffee in the UK.

Not very nice filter coffee though. A hack for money saving brits is to get a reusable cup and then it's 49p from Pret.

Re: The cup-of-coffee pricing fallacy

#82

Earlier quoted context omitted.

A cost of doing business is one of the most essential expenses there is.

If an owner of the business cannot afford or won't frivolously spend $5/day on a coffee, he or she won't spend money on a SaaS feature that he or she can get for free. Even if he would, to get $500/mo the SaaS would need to find one hundred of such owners. If SaaS is to price its service at $100/mo, then people for whom extra $5.00/day is a big deal won't be looking at this service at all, won't be contacting the own…

[deleted]

Re: The cup-of-coffee pricing fallacy

#83
post #40
post #18

Earlier quoted context omitted.

Right, but then you don't really have a coffee shop anymore. I disagree with the posters above who say there's a 90% markup on the coffee. What you're buying at Starbucks isn't a coffee, but a coffee plus the right to sit at a table and use the wifi for an hour or two. And as OP points out, at the moment, this is pay-per-use: when I need a place to sit down for a bit, whether in my own city or some other city, or whe…

Out here Starbucks has been building/opening a ton of new places lately, some of which are replacing old ones. The new ones are strictly outdoor seating.

How does that work in winter?

Re: The cup-of-coffee pricing fallacy

#84

The "cup of coffee" analogy always struck me as though it was asking, "Hey, wouldn't you be willing to pay twice as much for your coffee as you do now?" And, well, no. It also misses the mark for anyone who says, "I'm not paying $100 a month for coffee, that's rediculous, I'll make my own. Now for those who actually do buy their coffee daily, it still assumes Also,it still asdumes a sort of laziness in personal budge…

I'm pretty sure there was an article on here just recently about how people who spend money even on dumb things don't do it because they don't budget, but because it provides other particulars of happiness. It stated that human life is complicated and min maxing life financially differs from person to person. So while they may spend $200 on coffee, but may also bike to work daily. Or they just flat out enjoy it and trade money for that enjoyment.

However, the Lionshare of consumers are not rationalizing their purchases like people such as myself often do (I know that comes off as incredibly pretentious, I'm just using myself as an example). I've gotten worse with my money (or better) intentionally so as not to be too cheap and give off the feeling that I'm tight. Normally I'd be that way, but people dislike those kinds of people...like a lot.

Overall just think of it as people paying a tax for something to further continue. It's a tax you don't have to pay, but can freely do so if you choose.

Re: The cup-of-coffee pricing fallacy

#85

This article frames the cup-of-coffee pricing comparison as: "$100/mo is less than a cup of coffee every day". But I most frequently see the comparison as: "$5/mo means giving up just a cup of coffee once a month". In this formulation, I think it's a pretty reasonable comparison, since a prospective user doesn't have to sacrifice much (just a semi-luxury item, one day a month) in order to use your service. The author…

$5 is far above the price of a cup of plain coffee in 100.0% of the world, rounding to the nearest 0.1%.

I agree though that the 0.001% ultra elitists who are destroying the world like to brag that they routinely spend this amount on one cup of plain coffee. When the revolution comes, these people will be the first against the wall and no one that is human will shed a tear at their loss.

Re: The cup-of-coffee pricing fallacy

#86
One more thing: things seems cheaper when priced over smaller intervals. For some reason, 50 cents per day sounds cheaper than $15 per month which sounds cheaper than $180 per year.

I don't know why. It's a bit like how everything ends in .99. even when you know it's being used on you, it still works.

Re: The cup-of-coffee pricing fallacy

#87
post #37

I drink a pot of coffee a day, which works out to around $.03 per cup. Pretty cheap for that vice. I know that Starbucks tastes better than my drip machine, but I don't really care. Coffee is coffee to me, java junkie that I am.

Just get an espresso machine (the real ones, no capsules) and a bean grinder. Coffee from freshly-ground beans tastes way better than Starbucks, is still $.03 per cup and takes only a few seconds to make with an electric grinder. Moka pots work too and are cheaper (though espresso machines are real cheap at least here in Europe) but the coffee isn't as creamy and it takes a few minutes to boil (even though it needs n…

Interesting. I get 28 oz of fair trade organic beans from Trader Joes for $15. I then make one-off 12oz "big mug" espressos using a full packed tin of 0.25oz of ground coffee, which seems is 13.4 cents of very high quality beans. Cost of water is 0. Cost of electricity, less than 1 cent.

The most important thing I found was not to use municipal water. Bean quality is far less important than water quality. Great beans and city water is undrinkable. Lousy beans and good water is tolerable in a pinch.

Re: The cup-of-coffee pricing fallacy

#88

The "cup of coffee" analogy always struck me as though it was asking, "Hey, wouldn't you be willing to pay twice as much for your coffee as you do now?" And, well, no. It also misses the mark for anyone who says, "I'm not paying $100 a month for coffee, that's rediculous, I'll make my own. Now for those who actually do buy their coffee daily, it still assumes Also,it still asdumes a sort of laziness in personal budge…

I'm pretty sure there was an article on here just recently about how people who spend money even on dumb things don't do it because they don't budget, but because it provides other particulars of happiness. It stated that human life is complicated and min maxing life financially differs from person to person. So while they may spend $200 on coffee, but may also bike to work daily. Or they just flat out enjoy it and t…

You can spend lots of money on dumb things and still budget. But a person who diligently budgets their money will not spend money on dumb things at the expense of debt, lack of proper long term financial planning, etc. Dumb things can fit into a careful budget.

Re: The cup-of-coffee pricing fallacy

#89
post #52
post #47

Earlier quoted context omitted.

> First, the price for a plain old cup of coffee at Starbucks differs from region to region, but it usually normalizes at around $1.80 (taxes included). Refills are $0.52. That sounds really cheap, or what's a 'plain old cup of coffee' - does Starbucks sell filter coffee over there?

Yeah, around me you can get simple drip coffee from Starbucks for about 1/2 to 1/3 the cost of an espresso based drink. Last I was there, I think the biggest drip cup they offered was around $2.30 and the smallest was about $1.50. It's been about 3 years since I actually got a drip coffee from Starbucks so the prices might be slightly higher now.

The crazy part, speaking from So-Cal, is that daily black coffee drinkers at Starbucks can even save a few cents on top of that if they buy one of the monthly refillable tumblers. I think you only get one free refill per day but I've been to a lot of places that don't care enough to refuse me another refill so mileage may vary.

Re: The cup-of-coffee pricing fallacy

#90
post #56

I found it hilarious when a LA based startup compared their pricing structure to a 'nice meal' (50-100$) Not only did it insult my definition of a 'nice meal', but also made me not want to give them any more money for 'nice meals'. A nice meal is 700 calories from healthy sources. An extravagant meal is the price they quote. Similarly $5 is not the price of a coffee... It's about 30p.

I've never spent more than $35 on a meal in my life, and I like to think I've had some mighty good ones!

Even in big cities I have trouble spending more than this on a single meal. If I'm covering a date or sharing a bottle with the table that changes obviously, but unless you're going to a suit and tie or otherwise haute kind of place then $50 is absurd.
Post reply on HN