A $12/kg farm-gate price versus a $16/kg importer offer looks like a simple comparison. It isn't. Between the farm and your warehouse there's transport, export, financing, storage, insurance, documentation, currency risk and import duties. The real question isn't who has the lowest price, but what the total sourcing cost is, and what you get in exchange for paying it.
Imagine you find a spectacular Colombian coffee.
The producer tells you: “12 dollars per kilo.”
You talk to an importer and they offer you an apparently similar coffee for: 16 dollars per kilo.
The conclusion seems obvious: “If I buy directly from the producer, I save 4 dollars per kilo.” Correct?
Not necessarily.
Because those 12 dollars are not necessarily the real cost of having the coffee at your roastery. And those 16 dollars from the importer are not simply “the price of the coffee” either.
Between a Colombian farm and your warehouse there is transport, export, financing, storage, insurance, documentation, currency risk, import duties… And someone has to pay for all of that.
The real question is not “Who has the lowest price?”. It is: “What is the total sourcing cost, and what do I get in exchange for paying it?”
What is the total sourcing cost, and what do I get in exchange for paying it?
Let's simplify. You have two main routes.
Route A — Direct trade: Producer → Exporter → Importer/Buyer → Roaster. In some cases, the buyer can participate directly in negotiations with the producer and hire export and import services.
Route B — Buying from an importer: Producer/Exporter → Importer → Roaster. The importer buys, finances, imports, stores, and later sells the coffee.
At first glance, the direct route looks cheaper. But the second has something the first doesn't always offer: infrastructure. And that infrastructure has a cost.
This is probably the most important concept in this entire article.
A producer can offer you a price at origin. But you are not buying coffee to admire it on a Colombian farm. You want to receive it in Madrid, London, Miami, Tokyo, Bogotá, or wherever your operation is.
Therefore, you must calculate the landed cost. That is: “How much does each kilo really cost me once it's available for use?”
How much does each kilo really cost me once it's available for use?
Imagine you buy directly from a Colombian producer. The initial price could be $12/kg. But now the tally begins.
1. Coffee at origin: $12/kg.
2. Processing and export preparation: may include milling, grading, selection, packaging and storage.
3. Internal transport: the coffee has to be moved from the farm or collection center to the point of export.
4. Documentation: exporting involves paperwork and documentation.
5. Exporter services: if the producer doesn't export directly, you need a company to manage the operation.
6. International transport: ocean, air or land, depending on the market and the type of coffee.
7. Insurance: especially relevant for higher-value shipments.
8. Import: depending on the country, this includes duties, taxes, customs clearance, inspections and fees.
9. Storage: the coffee doesn't magically disappear once it reaches the port. It needs to reach a warehouse.
10. Financing: and here comes a cost that many comparisons forget. Money also has a cost.
Money also has a cost.
Suppose an importer offers you $16/kg. Are they making $4/kg? Maybe. But you can't know that just by comparing prices.
That margin may be covering the coffee purchase, tied-up capital, transport, import, storage, insurance, financing, inventory risk, quality control, losses, logistics management, operating structure and commercial risk.
The importer isn't just selling coffee. They are selling access to an already built supply chain.
They are selling access to an already built supply chain.
Here comes one of the most underrated costs of direct sourcing: your own time.
Suppose you're a roaster. You can choose between two options.
Option A: spend hours searching for producers, requesting samples, coordinating shipments, comparing lots, negotiating, managing documents, talking to exporters, coordinating transport, solving problems, tracking the cargo and managing the import.
Option B: contact an importer who already has the coffee in stock, cup it, buy it and receive it.
The price difference can be considerable. But so is the difference in work.
On unit price, often yes. But that doesn't necessarily mean it's more expensive for your business.
Because you have to compare price vs. total cost vs. risk vs. time vs. tied-up capital vs. flexibility.
An importer may have a higher price but significantly reduce operational complexity.
Here the equation changes completely. Buying directly can make much more sense when you have sufficient volume.
Imagine two roasters. Roaster A buys 50 kg. Roaster B buys 5,000 kg.
The fixed costs of export, documentation, transport and management are distributed very differently. For the first, buying directly can be hard to justify. For the second, it can become a very interesting strategy.
That's why volume is one of the most important variables in direct sourcing.
Volume is one of the most important variables in direct sourcing.
Here we have the opposite case. An extraordinary coffee can exist in very small quantities, for example 30 kg. It can have enormous sensory value.
But spreading all the logistics costs over just 30 kg can make the cost per kilo skyrocket.
That's why, for micro-lots and nano-lots, a specialized importer can add considerable value.
Now imagine something no buyer wants to experience. You buy 500 kg directly. The coffee arrives. And you discover it doesn't taste like the sample.
What do you do? If you bought directly, you'll probably have to handle the claim, documentation, inspection, logistics, negotiation and possible return or compensation yourself.
An experienced importer may have established processes for managing these problems. That has value, and it should be part of the economic analysis.
It doesn't taste like the sample.
There's another fundamental difference. When you buy directly, you may have to pay before the coffee reaches your warehouse. That means tied-up capital.
Meanwhile, the coffee is in transit, you've already paid, you haven't sold it yet, and there's logistics risk.
An importer can absorb part of that financial cycle. For a small roaster, this can matter more than getting a slightly lower price.
Here direct trade has a very interesting potential advantage. When you establish a direct relationship with the producer you can get more detailed information about the farm, plot, variety, process, harvest, agricultural practices, processing and volume.
You can also build a long-term relationship. That can become a commercial advantage.
But careful: buying directly doesn't automatically guarantee greater traceability. There are direct operations with little transparency. And there are importers that offer extraordinarily detailed traceability. Traceability must be verified.
Buying directly doesn't automatically guarantee greater traceability.
This question comes up a lot: “How much is the importer making?” The professional answer is: we don't know until we understand their costs.
Gross margin isn't net profit. An importer may buy a coffee for $12 and sell it for $16. That doesn't mean they make $4. Between those two numbers there can be numerous costs.
That's why, if you want to seriously analyze an offer, you need to compare: purchase price → logistics costs → financial costs → operating costs → margin → final price.
We don't know until we understand their costs.
Let's imagine a purely illustrative example.
Direct trade — estimated cost breakdown:
This point deserves its own section. Because there's a romantic idea of direct trade: Producer → Roaster.
But in real international operations there can still be exporters, agents, logistics operators, importers, warehouses, insurers and customs brokers.
The question isn't eliminating actors on principle. The question is knowing what function each one performs and how much it costs.
An intermediary who simply adds margin without providing value can be questionable. An intermediary who finances, stores, verifies, imports, consolidates, manages risk and connects markets is providing a real service.
What function each one performs and how much it costs.
Direct trade can make a lot of sense when:
You have sufficient volume to spread fixed costs.
You're looking for exclusivity and want to build a direct relationship with a farm.
You need deep traceability and want to actively participate in the chain.
You have operational capacity, or partners who can handle export and import.
You want to develop long-term relationships, especially with strategic producers.
It can be more efficient when you buy small volumes, especially micro-lots.
You need flexibility: buying 30, 60 or 120 kg can be simpler.
You want coffee available immediately, without waiting through the entire import cycle.
You don't have a logistics structure: the importer already has one.
You want to reduce risk, especially in international operations.
You're just starting out and don't yet have enough volume to justify your own supply chain.
And it's probably the most interesting one. You don't necessarily have to choose between “direct” or “importer”. You can build a hybrid model.
For example: Roaster → Specialized sourcing → Producer → Exporter → Importer.
The buyer maintains a relationship and access to the producer. But uses specialists to execute the complex parts of the operation.
This can allow for greater traceability, access to micro-lots, better relationships, reduced risk and logistics efficiency. The key is that each actor has a clear function.
Before deciding between direct and importer, calculate the total acquisition cost: coffee + preparation + export + transport + insurance + import + storage + financing + management + losses/risk.
And then, the cost per usable kg, because not all the coffee purchased ends up being sellable coffee.
And finally, the operating cost: how many hours of your team's time do you need to invest? This last variable tends to disappear from spreadsheets. But it exists.
You shouldn't ask only “What price am I buying at?”. You should ask: “What is my total cost per kilo landed in operation, with what level of risk, and what value do I get?”
That's the real sourcing analysis. Because a cheap coffee can end up being expensive. And an apparently expensive coffee can end up being an extraordinarily efficient purchase.
Buying directly from Colombian producers can be an excellent strategy. Buying from an importer can be too. There is no universal answer.
It depends on: volume + origin + quality + availability + logistics + capital + risk + the buyer's structure.
The mistake is comparing just two numbers: $12/kg versus $16/kg. That's not a cost comparison. It's a price comparison.
The real comparison begins when you ask: “How much does it really cost me to get this coffee into my warehouse and turn it into a profitable operation?”
Because in green coffee, the purchase price is only the first chapter. The real cost is written throughout the entire supply chain.
What is my total cost per kilo landed in operation, with what level of risk, and what value do I get?
At Originallies Coffees we help you identify coffees, producers and buying opportunities, connecting buyers' needs with the right supply and structuring the sourcing process.
Start your sourcing.
Not necessarily. The farm-gate price doesn't include transport, export, insurance, import, storage or financing. Once you add up all those costs, the final landed price can come close to, or even exceed, what an importer charges — and their price already includes infrastructure and risk management.
Landed cost is the real cost of each kilo once it's available for use in your operation, not the price agreed at origin. It includes the coffee, preparation, internal and international transport, insurance, import, storage and financing. It's the only figure that lets you compare direct trade and importer offers fairly.
Volume is one of the most decisive variables. The fixed costs of export, documentation and logistics are distributed very differently between 50 kg and 5,000 kg, so buying direct tends to become more profitable as purchased volume increases.
Not automatically. There are direct operations with little transparency, and at the same time, importers that offer extraordinarily detailed traceability. Traceability needs to be verified case by case, not assumed based on the type of channel.
Working with an importer tends to be more efficient when you buy small volumes or micro-lots, need flexibility and immediate availability, don't have your own logistics structure, or want to reduce risk and tied-up capital, especially when you're just starting out.