Pros and cons of buying Bulk Organic Coffee.
You certainly do not need to buy bulk Organic Coffee for your home. But if you are running an organic café or another organic coffee shop or restaurant, then you cannot help but buy bulk organic coffee. It is a general idea that buying something in bulk comes cheaper when compared to buying in retail and that is true for organic coffee too; but that does certainly not mean that you order things in tons just to save a few bucks in retail. You need to have some idea of material management and employ some brain to work things out correctly. How? Here you are!
• The Mathematics of buying bulk Organic Coffee: When it comes to making profits from your organic café, you must consider saving those extras you pay on buying organic coffee in retail. You can save them by buying your organic coffee in bulk. But this does not mean that you stack your godowns with tons of organic coffee, just to let it age for years there and loose all its flavour and taste or get spoiled by fungus. No! You do not want that! To order the right quantity of bulk Organic Coffee, you first need to work out your café’s weekly and monthly consumption of organic coffee and your prospects of growth over the next month. Keep in mind that coffee sales do not remain the same in all seasons, all times and all places. It is up in winters, cold places, higher altitudes and festive seasons and down in summers and rainy seasons, hot and humid places and boring months. So, plan your order for bulk organic coffee accordingly. Ordering too much at a time will cost you space, maintenance and preservation charges and labour. Then, the coffee will loose its aroma and taste and may also catch some moisture or fungus. This will adversely affect the quality of coffee you cater and ultimately reduce your profits by cutting your sales down. That means, you are ultimately at a loss by ordering bulk organic coffee. So, what quantity should you order?
• Economic Order Quantity: Have you ever heard the abbreviation EOQ or Economic Order Quantity? It is mostly used by people who are involved in material management and particularly in procurement of material. This means the quantity, which when ordered in bulk, lets you have the maximum possible quantity shipped to you at the minimum shipping charges for that range (shipping charges vary for different ranges of shipped quantity); helps in making maximum utilization of the storage space available with you; costs you the minimum maintenance charges for that range of quantity and yet is just right for consumption for the proposed period leaving a little in stock until the next lot arrives. You can also order a big quantity schedule its delivery in small lots periodically, so that you need not age the coffee with you and get fresh lots delivered to you each time, without going into the hassle of finding a new vendor and place a purchase order each time. There is a mathematical formula for Economic Order Quantity, given as under;
EOQ = {2(Annual Usage in Units)*(Order cost)/(Annual Carrying Cost per Unit)}1/2
Q* = {2C*D/H}1/2
Where,
• Q = Order Quantity
• Q * = Economic Order Quantity
• D = Annual Usage in Units
• P = Cost per Unit
• C = Order Cost (Fixed Cost per Order)
• H = Annual Carrying Cost per Unit (Cost of refrigeration, rent of storage space, cost of preservation etc.)
Arriving at the result – Deduction of Formula: The above formula can be deduced as follows;
Total Cost = P*D + C*D/Q + H*Q/2,
Differentiating the whole equation and equating it to zero,
• Buy it Whole: When you want to bulk organic coffee, consider buying whole beans rather than ground coffee. The reasons are obvious. The whole coffee beans have longer shelf life than ground coffee; you can see for yourself the quality (varietals, roast, size etc.) of the beans; the flavours and taste are retained longer in them and each time you grind them, brew and cater to your customers, they will feel the freshness. Then there is one more advantage of buying whole beans. It is almost impossible adulterate the whole beans with anything else. So, you get what you pay for.
• Buy Certified Organic Coffee: Whether it is bulk organic coffee or retail, always buy certified organic coffee. Only a certificate from a recognized agency can ensure that the coffee is really organic. Do not settle for anything less than that.
• Buying Options: When you want bulk organic coffee at cheapest, the best deal will be to buy it straight from the producers or farmers (if you are that big dealer and you know some producers whose coffee is certified). You can also get it from the wholesalers, but then they have their own commission. Consider buying bulk packages from big shops or organic coffee dealers if you do not want to travel far and wide in search of producers or wholesalers. Finally, there is the internet. You can see a whole range of organic coffee there; in different packs, different flavours, different roasts and different qualities and with different certifications and different profitable offers. Some offer free shipping while some free quantities against bulk purchases. You can also choose the right company or producer on internet without moving from your place, at the comfort of your home. This option is best for them who do not live in a coffee-producing nation.
• Finally: Buying bulk organic coffee, in other terms, means you are supporting a noble cause in bulk. You are indirectly ensuring good health of your customers and your environment in bulk.
This article was contributed by Aparup Mukherjee
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