Tea expert explains the price of expensive tea: how much of the cost you pay goes to the producer.
Ever wonder what goes into bringing a package of tea into your hands, and why good tea costs so much? Here, we breakdown of the costs of expensive teas sold by small a specialty tea shops (namely: us!) versus a larger tea company, including how much of the final cost ends up with the tea producer compared to the company that resells it, and what the various steps along the way are.
You might say we're spilling the tea on tea.

Price breakdown for Nannuoshan:
(Example: Huang Zhi Xiang, a Dancong oolong)
Final retail price: € 30.00 for 50 grams
Net price (before VAT): € 28.00
Total cost of tea to NNS: € 12.90
We pay to the producer: € 10.30

Amount that goes to us: € 15.10, 50%
Amount that goes to producer: €10.30, 34%

However, from those € 15 come our operating costs, including: employees, warehouse rent, taxes, shipping costs, sourcing costs, commissions to payment services, website maintenance, and marketing.

Breakdown for large tea company:
Final retail price: € 9,90 for 50 grams
Net price (before VAT): € 9.30
Retailer pays to brand: € 4.80
Brand pays to western wholesaler: € 1.00
Western wholesaler pays to local wholesaler: € 0.80 [estimated]
Local wholesaler pays to producer: € 0,64 [estimated]

Amount that goes to the company: € 4.50 = 45%
Amount that goes to the producer: €0.64 = 7% [estimated]

As you can see, we give a greater portion of the price to the farmer/producer than a larger tea company by avoiding middlemen, while taking a similar proportion for ourselves (although the overheads of running a small business are higher). Though the final cost is higher to our customers, we think it is fair to pass on more to the people who make the tea in the first place, and it enables them (and us) to provide higher quality tea with more direct oversight by us—high quality tea which is proportionately tasty.

For more on tea sourcing, read our blog, check out pictures on our Instagram, or, to get a firsthand, eyewitness perspective:
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