…are you buying coffee?
…or are you buying into one of the most ingenious marketing schemes of all time?
The first thing I do everyday is get my coffee started. I am a huge fan. I love the way it smells, tastes and makes me feel. I can literally accomplish anything after my first glass.
Stopping at Tim Horton’s (I live in Canada lol) or Starbucks when I ventured out to tackle my day was the highlight of my morning.
We all know that these coffees are over priced, but we pay it anyways. Its convenient they taste good, and posting a picture of your Starbucks cup with your name spelled horribly wrong always gets a lot of likes. (I got “Arin” a lot)
When I was setting out on my journey to get serious about retirement savings and to become debt free. More on that here. I started looking at things I didn’t need to buy anymore. My “Fancy” coffee habit had to go.
I was spending about 6.75 a day on coffee. Plus tip. So lets say 7.25. That’s approximately 2537.50/year.
In a five year span I spent 12,687.50 dollars on COFFEE! We are all a little guilty of ignoring how much money we really spend on things we like. So it was easy to push to the back of my mind.
Breaking down the real amount of money I had been spending on coffee really was an eye opener for me. So, I changed my habit.
I bought a Keurig and a giant box of McDonald’s coffee pods. I like the coffee and I am also a fan of the fact that they aren’t entirely made of plastic, so it helps the environment. These are affordable and quality coffee pods. I save myself approximately 2237.50 a year this way, over a five-year period this will save me 11187.50. Which is money I can spend in SO many other better places.
I got to thinking, how are so many people convinced that buying a 7 dollar coffee is a good idea? Well the answer is clear, its marketing.
Here are some cost breakdown for cost for Starbucks to serve you a 7 dollar coffee.
Cost of Coffee: 16¢. They markup the coffee by 3780%
Of course, there is overhead, paying staff and other expenses such as milk and lids.
I guess this really breaks down them selling you a service. So, how valuable is it to you for someone to serve coffee to you? Is it 3780% ?