Membership Dues

When I became a Certified Fair Trade™ coffee roaster things were different, there was an easy online way of reporting how many pounds of FTO beans I had bought from my supplier and I was required to pay about 10¢ per -- and most importantly, membership was free.

Now the reporting method involves filling out a spreadsheet and emailing it to them, which is a bit more confusing. C'est la vie, I can adjust. What I don't like is the sudden annual fee to simply be a member of the club, the dues are $700 per year, and that's on top of the 10¢ per pound fee. Last year my per pound fee was over $1000.

So these days I find myself in a dilemma, I can't really afford to pay $700 a year to belong to a club right now. I am required to put a Certified Fair Trade™ logo on any bag of CFT coffee that goes out my door, they supply them for a limited time, then it's up to me to incorporate it into my own labels, which they have to approve. I can get stickers, posters, door signs, etc. from them for free which is great.

What it all boils down to is marketing and product recognition, if you see the little black logo you know instantly that it is a Certified Fair Trade™ product. And whereas that is an important consideration I know that I could still label my coffee as "Fair Trade," note the omission of the word "Certified." Would that be enough? Is a single word worth $58.33 per month?

It's nickles and dimes and that's pretty much all we have around here. If money weren't tight, it wouldn't be an issue.


Jen said…
I'd still buy your coffee regardless....

Maybe you can start charging us dues for the Muggsy fan club to offset your own costs. ;)
ThatsRich said…
The real questions are:
1) Does it matter to your current customers?
2) Does it matter to any prospective customers?

Speaking as one of the first group, I can say it wouldn't matter to me if you bought your beans on the black market and roasted them using carcasses of dead muskrats. (OK, maybe it would bug me a little.) But I'd still buy, brew and drink your beans.

Clearly, my business isn't sufficient enough to sustain you.

But, I'll bet a pretty small number of your current customers make up about 80% of your revenues. (The 80/20 rule implies that 20% of your customer base drives 80% of your business.)

I'd make a list and call them and ask: Do they care? Do they derive any special benefit from that "special" word? If they say "Yes", ask "Why?"

In this process, you may also get an answer to the second question. Because you'll probably find out that the customers who care about "certified" are more like the customers you want to add - or not.

Then the $700 becomes an expense toward growing your business and it's a "marketing" expense, not a "production" expense.

I realize it's all the same bucket, ultimately, but if you think about it this way, you can more easily determine if you're getting your money's worth.

I'll bet you could have answers to your question in one afternoon.

Just my $0.02.
MKL said…
I agree with ThatsRich - I don't believe most people will care. But if they do, then you know that and can adjust for it. I'm also assuming that is a business cost that would be a deduction on your taxes...?
Gretchen said…
And then there's this: Market Research has shown, over and over again, that customers are very poor at predicting even their own behaviour.
In other words, just because a customers say (and really believes!) that this or that factor is important to them, their actual purchasing behaviour nearly always belies their words.
That's what makes marketing such a wild and interesting world.
I've always treated my public service job as if it were a small business, and have had great success using principles I've learned (various ways, I'll tell you some day, if you're interested) about customer behaviour. I've been blown away again and again by the seemingly irrational way they (we, really) make our buying decisions!
No help from me, really, except maybe to say you should look for a way to see how they actually behave on this issue, rather than relying on what they say they'll do.
I say Ken and I will continue to buy your coffee regardless...if you can believe that.
Nataraj Hauser said…
You might also consider labeling your coffee "Fair Trade" as you indicate, and also include (on your invoice to larger customers, and in-house to walk-in customers) that you buy your beans from the same place as always, but have chosen not to pass on the marketing cost of the word "Certified". I'd still buy your coffee. I might not if you were a large business trying to convince me of the same thing - I'd be less likely to believe it. Good luck!

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