We have been operating online Auctions for since 2011. During that time we have built up a Strong understanding of what is works and what doesn’t. We have a strong set of producers who wish to work with us, and we have a good list of buyers who trust us.
We also have developed a good understanding of how we can facilitate direct trade between buyers and sellers, how the logistics might work and also the pitfalls for both buyer and sellers in coming to an agreement to buy coffee and making sure they receive the quality they bought.
- We display the brochure of the next auction or auctions.
- Typically the brochure will go live 6 weeks before the auction day
- We cup the coffee independently and provide a cupping report for each coffee on the auction platform.
- We only auction coffee scoring 85 and above.
- Buyers register to bid on the auction
- We send out samples to those buyers interested in the each of the coffees.
- The buyers cup the coffee and decide which coffees they would like to buy.
- On the auction day, usually at 10am (London) we will start the auction.
- Each lot will be open for bidding and the highest bidder will win.
- Bids are placed on the basis of an FOB purchase.
- The buyer pays 3.5% commission for each coffee they buy. This covers the cost of running the auction on behalf of the producer.
- Once the commission has been paid, we introduce the buyer to the seller and you agree the contract of sale for each of the coffees you have bought.
- At this point you can discuss the logistical side of the sale.
- We can help, such as providing help with payment and understanding logistics. More details can be found here.
- We can also help with payments and the banking side of things if as a buyer you are nervous of agreeing a sale with a producer for the first time. We want this to succeed as much as you do.
What does it mean for you?
We are aiming to provide a price discovery mechanism for producers so they can understand how the quality improvements they make in their production methods are rewarded.
We are going to make the auctions up with a series of different coffees each time we run them. We think we will run auctions weekly, depending upon the season and the amount of coffee available at any one time. We are not looking to sell whole containers in one go from one producer. As much as this is attractive to a farmer, this is not always something a buyer will want to do at the outset of a relationship. There is a balance to be struck between accessing new and interesting coffee, and building the relationship in a way building trust.
Shipping coffee in a complex business. Consolidation is the key and some countries are set up in better ways than others. Kenya for example consolidates all the time. So out may be, from the buyers perspective coffee can be won through an auction from a range of buyers and shipped in one container in a easy way, once terms have been agreed.