Price, Value, Service
What’s the difference?
Value - Price and Value are an important balancing act. When these are misaligned, brands can lose trust (and customers).
Quality - Price levels tell us something about what to expect in terms of quality (but not always).
Branding/Packaging - When the purveyor thinks something is special, they want to present it in a way that shows, perhaps highlighting purpose/meaning behind the company or product.
Scarcity - The law of supply and demand dictates that when something is rare, it is worth more. It doesn’t necessarily mean that it will be a better product, but it’s often positioned this way. This method works well in our current novelty-seeking and flex/bragging culture, but is easily lost if quality consistently misses expectations.
These are pretty basic and easy to understand, but there’s an additional consideration to be made: Services.
Along with basic good quality, what else are we paying for? In a competitive marketplace with not-big differences between products, companies have to offer more than just “the best coffee.” This can be anything from brand recognition to staff training and support to supplying equipment and consulting. Each company will bring their own strengths, which will need to be weighed according to your specific needs.
Tone and service style will also play into your decisions. If a company offers everything you need at reasonable prices, but every interaction you’ve had with their representatives has been awkward or weirdly confrontational, it may not be a good fit.
Or, if a company is lacking one thing you need (like providing equipment at no upfront cost, for example), but their vibes resonate with you, it may be worth diving in and trying to find a compromise. If the relationship seems to be a good fit, they will want to find a way to work together. They may be able to pass on a nice discount (manufacturers usually offer coffee roasting companies generous discounts), or even finance the machine for a few months. No harm in asking for what you need, so long as you manage expectations fairly.
While we’re on the “free equipment” subject, be sure to read between the lines. We’re all very aware of the fact that nothing is free, so it takes a little digging to find out what you’re paying for exactly. Most coffee companies who provide “free” equipment will inflate the per lb/kg price and lock customers into a contract that’s designed to eventually pay off the equipment in a couple of years. There’s nothing nefarious here: they’re just trying to run a profitable business, making good on investments. Further reading on this concept.
This is where you’ll have to weigh opportunity costs - is the reduction in capital expenditures (equipment) worth the increase in recurring cost (coffee)? Like most things financing, the longer it takes to pay off an asset, the higher the final cost will be. The quality of most vendor-provided equipment will fall into the “good enough” category, meaning that your choices (build quality, functionality, aesthetic) will be very limited, and you could end up with a less-than-stellar machine and inconsistent grinder. Think about your beautifully designed bar and custom ceramics alongside a basic-looking metal and plastic box in a very limited range of colors (low-to-mid grade machine).
Will the equipment hold up well enough to last through the lifetime of the agreement? What’s the annual cost of ownership (in terms of maintenance costs)? Will their service be adequate to keep you in operation should you experience equipment issues (24 hour service, or loaner machines, etc)? Can they offer a service agreement that goes beyond the manufacturer’s one-year warranty?
Other, less-obvious things enter the picture. As the (often problematic) stereotype goes, who takes better care of their homes - owners or renters? Is there a difference in the ways that you treat your own car vs a rental, or a company vehicle? The differences in build quality/longevity between a $5000 espresso machine and $10k one can be huge. The budget machine may give you 6 years of pretty-good performance, while a well-built one can last for decades (with regular maintenance of course) with good resale value.
From another angle: is your fresh produce supplier expected to provide refrigerators, knives, cutting boards, juicers, and blenders? What is your milk supplier providing besides the cartons you order? Somehow, supplying equipment has become a necessary part of the coffee business, but we should also acknowledge that this is an unusual thing to require from suppliers in general. So rather than expecting it from everyone, approaching from a perspective of it being one of many things to consider is more realistic.
Ideally, startup cafes would consider their coffee equipment to be among the most important investments in their business, planning to spend an appropriate amount for the quality and aesthetic they need. Owning equipment will lead to better overall care and a sense of pride in using it, along with a greater sense of responsibility for its care (buying from a reputable service company will often include warranty and periodic maintenance, along with reasonably priced service plans following the warranty period). This also leaves your options open in case your coffee supplier performs poorly after the “honeymoon phase” of the relationship, or if you just want to change things up after some time.