Keeping Costs Low
Luke (the founder) explains the decisions made to keep costs low and your prices fair.
Okay so as a technologically-inclined person, I saw an opportunity with this business to not only make great coffee, but also great technology. Now, how exactly does that have to do with cost? I'll explain in a moment.
So in putting this business together, I went in understanding that I wanted to do a lot of it on my own. I programmed this website by hand, creating product management features, API integrations with Square, making it all look beautiful, and creating a tool for everything. That is, until I fell into a trap.
See, many people don't think about the costs associated with packaging an item. I mean, it's just some paper/plastic, so that basically costs nothing, right? WRONG! It adds up so quickly. I mean, yeah, the bags are like $0.60 each and that's not the main issue I ran into. The main issue was branding.
So as I was making my packaging decisions, at some point it came up that I'd have to put branding on my products. That either looked like creating custom bags or slapping on a custom label to make it all look pretty. I mean, they're just labels, right? How expensive could that be? Oh my goodness, it's expensive, very expensive.
With the printers I was looking at (and I looked at a lot of them), I quickly realized that having custom labels on every bag would rocket the price of packaging to $2, $3, or even a whopping $4 a bag. All for what was essentially just printed paper with some sticky stuff on the back. That was utterly ridiculous. I wasn't about to pass that price on to you, my customer. So, I did some playing around with things.
First, instead of doing one label for the coffee information and another with my brand name on it, I thought "okay, well maybe I could just make one big sticker. Perhaps that would get the price down?" And guess what? No, it did not. If I remember correctly, the price actually went up. So off to figuring another solution out.
I tried everything. Every possible combination of whatever it could be to make this branding issue work out in my favor. Nothing was working. But then, I had a wonderful idea. Why not make the labels myself?
Now, it's important to note: there are some drawbacks to this. Namely, the only viable way to print labels at my scale at a reasonable price would be to print them in black and white. Since thermal paper doesn't require ink, it's great, but it just can't print in color. But I just decided to tease the idea. I mean, could black and white really be that bad? Was color really worth jacking up my customer's prices $3 per bag? For me, that made it an easy decision.
Then came the final idea that sealed this into existence: create a custom label-printing solution through my staff portal. So, I got to work programming it. What came out is something I'm truly proud of: labels that were dirt cheap, but also not horrible looking. And the added bonus: I could start printing lot numbers, roast dates, or just about any bit of dynamic information I wanted onto the label. It was pretty elegant.
And I think the whole lesson here is a really big one: don't fall into the trap of having an idea of perfection when it really just has a deeper cost. The cost was making prices higher for my most valued asset: my customers. All in the name of pretty colors? I don't think that's worth it, especially when the pretty colors actually ended up not being so valuable after all. The black and white design is simple, elegant, and it looks more akin to what you'd expect from a local roastery.
But what I think is cool in all of this is that it shows that you can really do anything yourself when it comes to technology. I mean, sure, there are some minor exceptions like having Square handle payments. But all-in-all, you can make your own systems to do just about anything. Heck, I made a custom system just for making these lab notes. Point is: it's totally worth investing the time doing something that'll save you money. In this case, it worked out to a packaging cost of less than $1, which is outstanding. I turned the biggest cost in my packaging into the smallest cost simply by reframing it into a technology problem. I think that's pretty cool. I hope you do too.
Thanks for reading,
Luke
So in putting this business together, I went in understanding that I wanted to do a lot of it on my own. I programmed this website by hand, creating product management features, API integrations with Square, making it all look beautiful, and creating a tool for everything. That is, until I fell into a trap.
See, many people don't think about the costs associated with packaging an item. I mean, it's just some paper/plastic, so that basically costs nothing, right? WRONG! It adds up so quickly. I mean, yeah, the bags are like $0.60 each and that's not the main issue I ran into. The main issue was branding.
So as I was making my packaging decisions, at some point it came up that I'd have to put branding on my products. That either looked like creating custom bags or slapping on a custom label to make it all look pretty. I mean, they're just labels, right? How expensive could that be? Oh my goodness, it's expensive, very expensive.
With the printers I was looking at (and I looked at a lot of them), I quickly realized that having custom labels on every bag would rocket the price of packaging to $2, $3, or even a whopping $4 a bag. All for what was essentially just printed paper with some sticky stuff on the back. That was utterly ridiculous. I wasn't about to pass that price on to you, my customer. So, I did some playing around with things.
First, instead of doing one label for the coffee information and another with my brand name on it, I thought "okay, well maybe I could just make one big sticker. Perhaps that would get the price down?" And guess what? No, it did not. If I remember correctly, the price actually went up. So off to figuring another solution out.
I tried everything. Every possible combination of whatever it could be to make this branding issue work out in my favor. Nothing was working. But then, I had a wonderful idea. Why not make the labels myself?
Now, it's important to note: there are some drawbacks to this. Namely, the only viable way to print labels at my scale at a reasonable price would be to print them in black and white. Since thermal paper doesn't require ink, it's great, but it just can't print in color. But I just decided to tease the idea. I mean, could black and white really be that bad? Was color really worth jacking up my customer's prices $3 per bag? For me, that made it an easy decision.
Then came the final idea that sealed this into existence: create a custom label-printing solution through my staff portal. So, I got to work programming it. What came out is something I'm truly proud of: labels that were dirt cheap, but also not horrible looking. And the added bonus: I could start printing lot numbers, roast dates, or just about any bit of dynamic information I wanted onto the label. It was pretty elegant.
And I think the whole lesson here is a really big one: don't fall into the trap of having an idea of perfection when it really just has a deeper cost. The cost was making prices higher for my most valued asset: my customers. All in the name of pretty colors? I don't think that's worth it, especially when the pretty colors actually ended up not being so valuable after all. The black and white design is simple, elegant, and it looks more akin to what you'd expect from a local roastery.
But what I think is cool in all of this is that it shows that you can really do anything yourself when it comes to technology. I mean, sure, there are some minor exceptions like having Square handle payments. But all-in-all, you can make your own systems to do just about anything. Heck, I made a custom system just for making these lab notes. Point is: it's totally worth investing the time doing something that'll save you money. In this case, it worked out to a packaging cost of less than $1, which is outstanding. I turned the biggest cost in my packaging into the smallest cost simply by reframing it into a technology problem. I think that's pretty cool. I hope you do too.
Thanks for reading,
Luke