Price increase questions

I agree with separating shipping from the price of the tea, in response to this concern: “My only concern is that this will strongly affect the folks who just want to buy one pouch of the current week’s tea. Even if I cut the price to $7.99 and charged the $2.32 in postage that I would have to pay, it would send the cost of one pouch over $10.”

Although in this case it ends up being slightly more, in the long term I think it would encourage people to buy more – for example, Now I can buy multiple pouches for 7.99, know the price of the tea is staying the same, but if I had a solid shipping cost, I wouldn’t be afraid to pay more for more tea. That probably doesn’t make sense at all,

but I feel like shipping prices will never go down really, if they keep going up something will have to change, so maybe thinking farther into the future and seeing what changes you can make that you won’t have to change again in a year – what’s easier for you and the customers in the long run.

As a customer who’s had to start ordering from overseas, I would prefer the cost of US shipping taken out of the tea price. UK customs charges fees on any package over $25 coming into the country from outside the European Union. At $9 per bag, that means I can only order 2 teas at a time without the post office holding my package for ransom. I don’t know how much each bag of tea would cost without US shipping built in, but I thought you might like to know what your international customers have to consider.

So, my latest thought is that perhaps I will just absorb the new price increase and instead ask for a minimum purchase of $10.

I was wondering if such a policy would have a negative impact on anyone?

I’m going to be up-front and say that I no longer shop at 52Teas and have not in about 1.5 years but my $0.02 is to reduce the current price and add on an accurate shipping charge for all orders. Part of my decision to stop buying from Frank was because of the price of the tea – $8.99 is too much for 1.5 ounce of blended tea FOR ME. On top of that I am in Canada and the USPS rates are so high that the tea would be closer to $10 an ounce if I only got one or two.

Where to cut costs in this situation really depends on what market you’re most concerned about. I imagine the bulk of your profits come from the US and you should do what is best for your main audience, but it feels to me as though the international orders take a bit of a hit to help keep the in-country orders with free shipping. That may be costing you some international business but increasing US sales, so you don’t want to risk upsetting the balance too much. Unless you stopped doing international orders.

The bottom line is that you need to make money, and one way or another someone will be unhappy BUT hopefully at the end you will have more happy customers than otherwise. I think as long as you’re up front with your reasons people will appreciate your honesty and hopefully continue to buy your tea.

Maybe have a minimum of $10 for free shipping. This would encourage people to group their orders together more, rather than buy something this week, and something else next week… which would bring your shipping costs down a bit.

If someone wanted an $8.99 tea, they would likely tack on a $2.99 tea to make the free shipping minimum.

To make a flat minimum with no orders under $10 might not be the greatest idea as there may be a few willing to pay for shipping on a $2.99 tea if they just want to try one of your iced tea blends. This probably wouldn’t effect many, but if you start running weekly specials on the iced tea blends like you have the hot tea blends, some won’t want to spend $10 a week to get their hands on the special in case it were to go fast and not be available the next week. Just a thought for future possibilities… I don’t know if you did that last summer or not.

I am all for separating the shipping cost from the tea. I guess I like transparency. The old way definitely discourages buying of multiple pouches. For example, let’s say shipping is about $2 per pouch. If I buy three pouches, does adding 5 ounces more of weight really translate to triple the cost of shipping?

The fact that US patrons get free shipping and I as a Canadian have to pay, really rankles me. Even if it makes sense to your business, and creates more profit from your US customers, I am sure that it turns off many Canadians as well. Perception of fairness is critical.
If you don’t mind alienating a large portion of your potential customer pool, then it makes sense to just keep things the way they are with a minimum purchase of $10.
You have pretty much lost me as a customer for the moment, despite the fact that you occasionally reblend certain teas that I absolutely love. If you started charging US customers part of the shipping, and made things more equal, I’d be much more likely to one day place another order.
Anyhow, I wish you luck.

I know I have it lucky, as I’m in the US and don’t have to pay for shipping. That being said, I would have a problem with a minimum of $10 in ordering. Your business model is centered around the weekly tea, and if I wait until there are 2 teas that I want to buy, then the likelihood that one will be sold out by the time I am ready to order is pretty high.

I consider the price point of your tea to be perfect for me…sure, I could pay less for the same amount of tea somewhere else, but your flavors are what does it for me. I don’t know how you come up with all the flavors, but I did take the opportunity to buy 2 teas at one time during your re-blend weekend at the beginning of the month.

I don’t buy tea in any sort of large quantity, so even the size of your tea pouches is fine with me. I just kind of wish that it was easier to get the stuff I love, because I hesitated to drink my Lemon Meringue Chai (until I got the email about the re-blend) because I didn’t think I’d be able to get more.

I’ve developed the habit of making one or two fairly large orders ($50-$70) per year, and i tend to purchase those from companies that offer free shipping with a minimum of $50-$60.

The shipping costs, frankly, are the reason I developed this habit, and it’s worked for me. Also, as i’m not spending a few dollars here and a few there through the year, I can keep a lid on my tea budget, and not overspend.

Hope this is helpful in some way

Gene

Okay, I’m late to the ballgame, but here’s my 2 cents anyway. :P

I feel like this is a harder decision because of your business model of releasing one new blend every week, which is almost always a limited edition and not available in the future. I’ve missed out on some really cool blends in the past because sometimes they sell out in less than 24 hours. So, I feel a lot of pressure to buy a tea I want THE SECOND I read your weekly newsletter. I don’t have the luxury of waiting for a couple blends to come out that I’m interested in purchasing because chances are, I’ve only got that one shot to get my hands on it. Therefore, I really appreciate the free shipping. It definitely helps justify the cost to me when I’m impulse buying like that (usually with very little thought to how much money I can responsibly spend on tea that given month).

But would my having to pay for shipping really deter me from buying your tea? Probably not. I think the final total matters a lot more than the breakdown. I have been disappointed in the past when I’ve spent $8.99 on 1 ounce of tea. As others have said, this seems pretty steep. If I get 2 ounces for $8.99, that’s a much more justifiable/reasonable purchase. Sometimes I’m not sure why you sell such large quantity differences for the same price (despite the obvious reason that some leaves are larger than others, so you’re basically trying to fit as much tea as you can into one pouch). Perhaps adding some transparency here will help with sales. When you use a more expensive base and charge us $14.99 for it, I don’t mind because I KNOW it’s a more expensive/higher quality base. Your transparency closes the sale.

It’s clearly not your fault that the U.S. Postal Service has decided to charge more. And it makes sense that the customer would have to pay for this increase. At the same time, I wonder if there’s a way to lower your overhead to absorb the cost (a win-win for everyone). USPS offers flat rate shipping. Maybe you can use that to your advantage more often? If you can’t afford to offer free shipping on Tea of the Week plans, then maybe cut that program so that you can use flat rate shipping boxes for the Tea of the Month shipments.

It’s really nice that you’ve absorbed the price increase to date. But it makes me feel bad that your business is taking a hit. If USPS rates went up 25 cents, then I see no problem with you raising the price by 25 cents (or half that if you want to be nice and absorb some of the cost). It’s perfectly reasonable. How can anyone fault you for that? But taking this opportunity to raise the price by $1 (as suggested earlier) seems greedy and not genuine. I vote for transparency.