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  • Coffee Equipment $$$

    Having read a few posts where the issue of price of equipment has arisen, and how that relates to both the consumer and retailer, I started to wonder.
    It seems that both the retailer and the consumer have valid arguments to back their points of view. Consumers chase the "best value for money" and retailers chase " sustainable profit margins". Both IMO are acceptable.

    Then I thought about other retail areas where the cost of products is relatively high. For example, I like to Scuba dive. Scuba equipment (here in Oz) is quite pricey, especially with well known, high quality brands. Now, in an effort to boost sales and make their equipment more affordable, some shops offer various payment options that allow the equipment to be purchased and paid off over a set period of time.

    Its not limited to dive shops either is it? Domestic goods retailers also have "interest free" promotions that encourage consumers to have their items now and pay it off over time.

    So...do high-end coffee retailers have any such arrangements? It would seem to me that such a scenario might benefit both consumer and retailer alike in that the retailer is able to move more stock and the consumer is able to enjoy their equipment now. Obviously, economies of scale might be an issue here, with the market perhaps not being large enough to sustain this model, but.... I dont know.

    What do you think?

  • #2
    Re: Coffee Equipment $$$

    As I understand it there are arrangements for those in a business. The issue is that there is some commitment, to a through put / turover of beans and other ancillary goods that the equipment / coffee supplier may have.

    I would love to upgrade, but the equipment that I would like is in the $1.8K – $2.8K (being reasonable) and as there is only my wife and I at home drinking the stuff (we both work), our turnove is not great.

    The rate at which we go through beans is some what unstable, but lets say at least 1Kg every 2 – 3 weeks. I also purchase at least 1 or 2 cups at work or when I am able to access a good shop / barrister. With the fact that I do not use packaged sugar, takeaway cups or vast about of other product, I do not expect that a supplier would see any financial gain or security in offering / locking me into a deal.

    I would like to be able to access an arangement, and would consider it, but again; even from my position I have to see what is in it for me. It is a two way street

    Intrest free is not what it always appears to be, and if teh supplier was to manage the finances themselves, there is significant risk to be managed.

    AM

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    • #3
      Re: Coffee Equipment $$$

      We have extended "unofficial" lay buy payment plans to clients from time to time, but they dont get the goods until all is paid. An account is set up in our system for the client, and a monthly statement is sent out showing the account movements each month just like any regular account client!

      We looked at the "buy now pay later" kind of thing, but what it appears to amount to from the traders point of view, is that we basically pay a finance company to take the risk.....essentially we pay them a "premium" on the items thus sold. Again from the traders point of view this adds another margin on top of the price of the item being sold or if you look at it another way, its another cost to us that lessens the margin we make when selling the item.

      Thinking out aloud, I guess the way to manage this in an acceptable manner would be to advertise maybe 2 or 3 different prices for each item eg

      Price a) = payment by cash or eftpos or direct credit (EFT);
      Price b) = payment by credit card (adding say a 2% credit card fee);
      Price c) = purchase on a "buy now pay later plan" which = credit card price plus the cost to the trader from the finance company.

      I guess I would have no problem offering Price c), if the client were willing to pay the price.....problem is, many are trying to "steal" the item off you at lowest possible price & they are simply going to put the money up front./...ie "buy now pay later" never really comes into it!

      In which case its really up to the client rather than the trader when we are talking private traders (not department stores).

      In my younger days Scuba diving was one of my passions and I always bought well by waiting for best quality used items to come up for sale.  This was how I got around not having enough money to buy the stuff new at will, but I always had some of the best gear available that lasted yonks.  Come to think of it, thats how I got my absolutely best quality hi fi pre and power amps that are still with me to this day.........Of course you always had to be ready to rush off at a moments notice & get to the bargain before someone else did....and that meant you had to have some ready cash available.........hehe.

      Anyone else?

      Regardz,
      FC.

      Comment


      • #4
        Re: Coffee Equipment $$$

        One would imagine that when a retailer agrees to supply interest free through another organisation that association fees or set up fees would at times fall on to the retailer, which would in turn cause prices to inflate for the consumer to carry some of this cost. So I would imagine it would be hard for a small retailer who sells quality and most likely low turnover of stock to carry this extra burden. I could be wrong maybe there is huge mark up that the retailer could afford to offer this in turn to get more sales but would see it being hard for the retailer all the same.

        my uneducated 2 cents worth.

        Brett

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        • #5
          Re: Coffee Equipment $$$

          That really wasnt all that uneducated Brett!

          Look, people with no money dont usually come in to buy the most expensive stuff...... It might be a different story if we did offer payment plans where you get the goods straight up, but I wonder how much extra sales it would truly generate.... perhaps not that many...I dunno?

          Regardz,
          FC.

          Comment


          • #6
            Re: Coffee Equipment $$$

            There are now outlets doing 12months, 18 months even 30 months "interest free ;D"

            But to get that benefit someone has to pay (try walking into a bank and asking for $2000 interest free for 30 months).. :

            The bottom line with these interest free deals is the consumer pays...

            Get a price on a 30 months interest free item... then shop around...

            You will almost certainly find the same item on a "cash and carry" basis FAR cheaper elsewhere..... (quite possibly the original price less 30months interest at ??%)

            Profit margins on low volume items (like "quality" coffee machines) would be too low for the retailer to absorb the cost - the financial institution behind the deal sure isnt going to.....

            So who does that leave to pay - the consumer !!

            Never used a "play now, pay later" scheme- and never will!

            Comment


            • #7
              Re: Coffee Equipment $$$

              Originally posted by Fresh_Coffee link=1158044954/0#4 date=1158048465
              Look, people with no money dont usually come in to buy the most expensive stuff...... It might be a different story if we did offer payment plans where you get the goods straight up, but I wonder how much extra sales it would truly generate.... perhaps not that many...I dunno?

              Regardz,
              FC.
              Id have to disagree slightly there FC. ACA and TT are constantly featuring people who buy the most expensive things, because theyre interest free, and they then cant pay it back because theyve over-committed. The repo man then comes and takes away their stuff, leaving them to cry on TV that theyve been hard done by.
              It may very well generate more sales, but do you want the hassles that would seem to go with it?
              Out of interest, can you say how much the hire purchase firms sting companies for the interest free priviledge?
              Just my rant for the evening :

              Comment


              • #8
                Re: Coffee Equipment $$$

                Yes I take your point. Ive never gone into it because I couldnt be bothered with the extra hassle. Cant remember what the rates were......as I decided carte blanche that "we" didnt want to follow this up.

                There is one point however.......expensive coffee machines at this point dont carry the same kind of "value" in joe consumers mind as the plasma TV.........so my experience here is that we dont really get people enqiuring unless they are actually intending to spend the money right now.....

                Regardz,
                FC.

                Comment


                • #9
                  Re: Coffee Equipment $$$

                  I think there are some valid arguaments here - esp FCs point about value. I suspect a high performance and similarly priced coffee machine only has value insofar as you have a meeting of needs and capacity to afford. With luxury items, one of the drivers for many people is braggability  - the essence of branding. A new $3k flat screen TV has a value that is understood in a wider market place, it is therefore a mark of status, desirability. A $3k espresso machine, for someone who does not have an enduring love of the vagaries of espresso has no equivalent value - a lesser machine that produces a coffee is for most more than adequate.

                  It is also totally subjective - for AngerManagement for instance the useage of 2 people dont justify the expense for a prosumer machine, even though he has enough knowledge to value the concept - it is a case of the want meeting the need, (which is only a matter of time   ). In my case for 2 people we justified the  Minore purchase as a long term investment in a machine that would replicate what I could produce professionally, even for about 6 coffees a day, and obviosuly subconsciously prioritised down other non essential purchases.

                  Given that most prosumer set ups that are featured by sponsors on this site are priced under $5k for a grinder and machine package, for those wanting to buy now pay later, most could use a credit card at a lower rate of interest than a line of credit - the fine print of which is that as soon as the interest free period is over the interest is phenomenal. I suspect most of the sponsors, as retail businesses, would offer credit card facilities through EFTPOS, thus enabling a deferred payment of sort. Happily, the coffee appreciation journey is usually a case of periods of experience followed by upgrading when the equipment does not support the users needs. Equally happily, as is so often expressed here, it is much more important to have a consistent technique, deep understanding of the process and chemistry of roasting, pulling shots and texturing milk, than a bling machine.

                  This goes some way to keeping upgraditis and an impending appearance on ACA at bay.

                  Hmmm - short succint posting....NOT! Perhaps I should have another espresso  ;D

                  Comment


                  • #10
                    Re: Coffee Equipment $$$

                    Yeah, point taken.
                    Ever since the baby bonus started Ive seen plenty of girls patting their pregnant tum tum uttering hello plasma, but Ive never heard one say hello Giotto
                    With the credit card though, you cant get the same level of deferredness (is that a word?) as with the interest free schemes, 55 days v up to 40 months. Apart from a huge interest rate after the interest free period expires, theres also an administrative monthly fee to factor in.
                    IIRC I was stung about $6 per month to keep my account open >

                    Comment


                    • #11
                      Re: Coffee Equipment $$$

                      Originally posted by Lovey link=1158044954/0#9 date=1158055136
                      Yeah, point taken.
                      Ever since the baby bonus started Ive seen plenty of girls patting their pregnant tum tum uttering hello plasma, but Ive never heard one say hello Giotto  
                      Unless of course you just happen to know a lot of women who are into futuristic baby names  ;D

                      Comment


                      • #12
                        Re: Coffee Equipment $$$

                        Ive always believed the "if I cant afford it, I cant buy it yet " rule...The one exception is a house...

                        You buy now, pay later means that you will pay big time....

                        2mcm

                        Comment


                        • #13
                          Re: Coffee Equipment $$$

                          Originally posted by 2muchcoffeeman link=1158044954/0#11 date=1158059751
                          Ive always believed the "if I cant afford it, I cant buy it yet " rule...The one exception is a house...

                          You buy now, pay later means that you will pay big time....

                          2mcm
                          I agree 2mcm, I guess it depends on personal moral guidelines on that one though. I have done the interest free thing before and would chose not to again. The annoying phone calls and junk mail that follow up cancelling the account once it is paid is enough to drive one crazy. But cant really blame people for going down that path. And if you are going to go down that path why not a shiny stainless steel coffee appliance. Would be more stimulating than a plasma wouldnt it?
                          After Loveys quote maybe people will want to have another baby so they can put $4000 toward some new machinery. Maybe the site sponsors will have to throw in a pair of baby booties with every machine sold.  

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                          • #14
                            Re: Coffee Equipment $$$

                            no...no need....but if you wanna purchase a cheap pack of dodgy contraceptives.... :-? ;D 8-)

                            Comment


                            • #15
                              Re: Coffee Equipment $$$

                              Originally posted by 2muchcoffeeman link=1158044954/0#13 date=1158061274
                              no...no need....but if you wanna purchase a cheap pack of dodgy contraceptives.... :-?   ;D 8-)
                              Would you offer those on interest free terms though?

                              Comment

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