An Insider’s Secret for Finding Affordable Tea

It’s been a while since I last posted, but I’ve known what I was going to post for weeks.  (I’ve been getting ready for the experimental Online Tea Tasting–if it works out well, keep an eye on the “Tea Geek Events” section at http://www.teageek.net/store/ ).

With the economy seeming to get worse every week, most people are looking for ways to economize.  But with tea there’s a “secret” I’ve learned during my years in the tea business that will no doubt seem very counter-intuitive.  However, I want to share it with you so that you can make better choices when buying tea.

You’re usually better off buying more expensive tea.

Here’s why:  Every tea business I’ve been involved with (including a wholesaler and two retailers, plus Tea Geek) does the same thing when it comes to marking up tea.  They have a selection of teas that are affordable and make up a healthy percentage of what people buy; they also have a selection of higher-end teas that meet with a good deal of resistance on the part of customers.  (Customers like inexpensive tea.)

However, generally speaking, it’s the higher-end teas that have the lowest markup.  That means that a higher percentage of your spending goes to good tea and not to the decor of the shop or the landlord or into the pockets of the owners.  (Not that you shouldn’t support tea shop owners–you should.  They still make money even on the expensive ones; if they don’t, they’re not very good at running a business.)

Here’s an example:  Say you’re interested in two teas.   The first tea costs $2.50 per ounce, while the second tea costs $5.00 per ounce.   You might naturally think that the $2.50 is a better deal–and it is, if you don’t consider what you actually get for that money.

Based on what I’ve seen in the industry, I might guess that the ounce of $2.50 tea cost the shop $0.50 or $0.75.  Some teas are even marked up 700-800%…meaning your ounce of tea might really be only $0.30 worth of tea to the wholesaler the shop bought it from.

On the other hand, the $5.00 ounce of tea may be marked up less than 100%.  You might get it for only an 80% markup.  This ounce of tea might be worth $2.75 to the wholesaler.

Now compare those.  By paying twice as much for an ounce of tea ($5.00 compared to $2.50), you’re really getting nine times the tea–not in weight, but in value ($2.75 vs. $0.30).

Granted, this is a hypothetical example and any specific situation is certain to be different in some aspect.  But the general rule seems to apply–more expensive teas have lower markup, and thus are a better buy when you consider what you get for your money.

(I should also note that I’m assuming you’re getting bulk loose tea.  Fancy packaging usually costs more than the tea it’s in, so assume an even higher markup if the tea is in some kind of exotic-looking box with high production values, or is in tea bags, etc.  It’s all stuff that encourages people to buy, but you don’t end up drinking the box–you drink the tea.)

Tea is an affordable luxury, and buying bulk loose high-end tea is usually a better proposition than cheaper tea, or expensive tea that’s been packaged.