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Distributor cancelled an order and we need to move 30k bags of coffee [updated]

modest.coffee

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Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#321

Post by HiroshiSan »

dwightgunning wrote: post #315

> This coffee is still good. It was roasted in June and July 2022 with a one year best buy date. Still good but hardly fresh for a specialty. Anyway. There’s a 6x number in here that somebody (or somebodies) completely missed… Seems like what they thought was a fair-to-good deal was actually a such a terrible deal that, given their incorrect definition of a unit, the numbers in their model lined up. That might be som…

> Still good but hardly fresh for a specialty.

Was going to say this, I work at a specialty coffee shop and anything over 2-3 weeks is unusable.

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#322

Post by Freestyler_3 »

0110101001 wrote: post #239
Freestyler_3 wrote: post #216

Earlier quoted context omitted.

I don't understand either. They sell for 50% off right now for 42 a case, meaning normal price was 84. 84 × 6000 = 504 000 This doesn't add up with the 250k they were hoping for and the 50% off. Or am I wrong? (too bad they only have decaf yet, wouldn't have minded to try.)

Assumigly, they're offering I'm the coffee for 50% retail price. Sounds like that would put everything in line with standard grocery store markups. https://bellwethercoffee.com/blog/how-to-start-selling-whole... .

ah so that makes sense

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#323

Post by iJohnDoe »

loeg wrote: post #240
Freestyler_3 wrote: post #216

Earlier quoted context omitted.

I don't understand either. They sell for 50% off right now for 42 a case, meaning normal price was 84. 84 × 6000 = 504 000 This doesn't add up with the 250k they were hoping for and the 50% off. Or am I wrong? (too bad they only have decaf yet, wouldn't have minded to try.)

Wholesale is usually 50% or less of retail price.

Any retailer hopes to make 30%. 50% would be pretty incredible.

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#324

Post by brianwawok »

iJohnDoe wrote: post #323
loeg wrote: post #240

Earlier quoted context omitted.

Wholesale is usually 50% or less of retail price.

Any retailer hopes to make 30%. 50% would be pretty incredible.

Go get a product put in a big box and let me know what % margin you are keeping

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#325

Post by reverend_gonzo »

cortesoft wrote: post #299
deathanatos wrote: post #255

Earlier quoted context omitted.

The person's point, I think, is that even if you incorrectly believe a "unit" to be a bag of coffee, and you're purchasing 6k units (bags) for $250k, you're then, in your mind, being charged $41/bag of coffee. That price is far too high, higher than retail: i.e., you'd be selling at a loss, or at a price point that the market wouldn't take. So if you believe a "unit" is a bag of coffee, you're not making that purchas…

Because they didn't know the total was going to be $250k until they learned it was for 6000 cases.

The point is at some did they not discuss “we will sell you a unit for $x?”

If not, why not?

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#326

Post by LadyCailin »

lisper wrote: post #251
phphphphp wrote: post #238

Earlier quoted context omitted.

the units weren’t purchased, though, it was an order. If we take them at their word that they worked with a broker, then there’s numerous ways this could have happened. For example, the broker could have said “they’ll pay you $x per bag and they need 6,000 units” which would explain the discrepancy. After all, the order was for “units” but what’s ultimately being sold is bags — so there is some translation happening…

> the broker could have said “they’ll pay you $x per bag and they need 6,000 units” That's possible, but unlikely. The whole concept of "bags" just doesn't enter into it in a wholesale transaction. But even if this did happen, they could have avoided the problem by clarifying: "So that's a total of $X, right?" Also, at some point this deal should have been put in writing, at which point, again any ambiguity should ha…

The fault only extends as far as the amount of coffee they had to produce, but not the money. Had the distributors worked like the broker promised (they didn’t) then while the intense 3 shifts a day grind would have had to happen, the money issue wouldn’t be a problem, as they would have then sold it all to the distributor. So yeah, they fucked up, but not quarter million fucked up. That’s on the distributor and/or broker.

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#327

Post by nikanj »

cortesoft wrote: post #298
lisper wrote: post #284

Earlier quoted context omitted.

> You are making the assumption that there's some formal deal for $250k total. No, I'm not. I'm not assuming anything. Here is what they wrote: "In April 2022, a representative from this distributor reached out to us to see if we would be interested in participating in an online specialty coffee program for a major nationwide retailer. The opening order would be approximately 6,000 “units”." At this point there are o…

You are assuming they knew the $250k amount at that point. When they made the deal for 6000 units, they didn't know the total was going to be $250k. They didn't know the total was $250k until they learned it was for 6000 cases later.

They must have had at least some discussion on price per unit. Maybe not about the total, but how was this not caught when they sent the first invoice? At six bags per case, either they sent 1/6 of the ordered amount of coffee, or they got paid 1/6 of the expected money.

This smells like a slimy growth hacking strategy.

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#328

Post by corgi609 »

Ancalagon wrote: post #192
lisper wrote: post #174

Others have pointed this out, but no one has actually done the math yet, so... 6000 "units" for $250,000 is $41/unit. At wholesale. For a product that retails for $16/bag. It is just inconceivable that no one noticed this discrepancy. This is not a "grift" by the distributor, this is an elementary and obvious fuckup by the producer. In fact, it's so elementary and obvious that it would not surprise me a bit if this w…

Something something high quality, ethically-sourced coffee? (I don’t actually know the details of those descriptions. Playing devils advocate it sounded to me like they were trying to run a very ethical, environmentally friendly, health-focused business from the start, which is expensive as far as I can tell in the US, so maybe those prices made sense.)

Hello! If you read the whole story you will understand the numbers and the situation. It is all explained and you should read the whole story from beginning to end.

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#329

Post by adastra22 »

fbdab103 wrote: post #289
theptip wrote: post #256

Earlier quoted context omitted.

I agree it's weird, but I don't think it's up for debate on interpretation, they quite clearly state it: > The food broker laughed and said “I wondered why you’ve been so upset and concerned. When they said ‘units’, that was cases. They’re right on target so far.” You can imagine how we felt in that moment, realizing that the person we hired to make this a smooth transition and to guide us and to tell us the things w…

Is it possible the original contract was something like $x/kg as a sort of open-ended contract with at least 6,000 units to be shipped?

Almost certainly. They way it was explained, the distributor wasn’t sure what size order they were going to have. They were told just to prepare for 6,000 “units.”
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