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Yes I know and it is that claim I'm address, as I said, add up the costs for just the (additional) ingredients and they will exceed .08.
As I said before you're speaking as if the drinks magically materialize, but they don't, someone has to make them and this is actually the largest cost component and its not fixed (its bracketed). The time it takes to process an order for a cup of drip coffee is much less than it does to process an order for one of their specialty drinks. Hence, its the difference in labor costs between the two drinks that largely explain the price differential.
the labor is fixed for the most part. they pay hourly for whatever ... the line may move a little slower if premium drinks are ordered but there is no additional hourly cost as they pay these folks the same no matter what.
whether they are unloading a truck,putting inventory away or serving customers it may not matter much hourly.we have the same 2 people working at the one near us no matter what.
the labor is fixed for the most part. they pay hourly for whatever ... the line may move a little slower if premium drinks are ordered but there is no additional hourly cost as they pay these folks the same no matter what.
The labor is not fixed, its tiered. As your order volume goes up you'll need to add employees, since you can't hire 1/4 a person, etc there are discrete jumps. That is, once N employees have reached their maximum throughput you'll need to have N + 1 employees.
The line is not going to move just a little slower, its going to move a lot slower. It takes maybe 20~30 seconds to pour a cup of drip coffee, on the other hand it takes a few minutes to create a premium drink. Hence the labor costs per unit are much higher for the premium drink.
Quote:
Originally Posted by mathjak107
.we have the same 2 people working at the one near us no matter what.
No, they don't have the same 2 people working "no matter what". They have those 2 people working because that is what it takes to process the stores order volume. Starbucks, like any business, adjusts their staff in relation to peak hours, peak seasons, etc. Labor is not fixed....no idea where you got that idea.
its fixed in the sense that no matter what anyone orders that day the staff is the staff. they may sell only regular coffee that day or they may have 1/2 a dozen premium drinks or whatever.. that hourly rate for who ever is on staff that day doesnt change from one drink to the other.
if you figure the difference in labor costs for the guy to make a premuim drink when he gets min wage and can do god knows how many an hour the result is a miniscule amount of labor and material in that premium drink over the normal one .
i can see what the exec meant when he said how little the ingrediant costs are between the drinks and i have no reason to doubt him. if you doubt it dont believe it what can i say.
Last edited by mathjak107; 05-18-2011 at 02:32 PM..
The perfect wait to put on pounds is one grande vanilla bean frappucino per day: about $3.50 from Starbucks, or approximately $105 / month, or approximately $1260 / year.
We have 7 kids, only 2 left at home but we both work from home in separate offices. Few vacations-everything we like to do is pretty much home based. We are tired of traveling as DH travels a great deal for work.
No entertaining except family, no drinking. Good home grown food with about once every 2 weeks going out to dinner.
We are very much home bodies and decided to make our home our primary expenditure. When the last 2 are gone I'm sure we will downsize.
Thanks to everybody who answered about the coffee. Something about coffee makes me sick. I get nauseated going down the coffee aisle in the grocery store if anybody is grinding beans.
Coffee sends me to the toilet immediately. I wouldn't even eat coffee cake until I was in my 30's cause I thought it had coffee in it.
DH says he used to drink coffee as a young man but realized what caffeine was doing to him and stopped. We drink decaf tea now. I wonder how some folks can drink coffee all day and still function. I would jump out the window with that much caffeine in me.
i used to think caffeine didn't affect me. Then I started drinking coffee when I got my first "real" job. omg, lol. My coworkers would just laugh and say, "you had coffee this morning didn't you". I talked a mile a minute, walked a mile minute, typed a mile a minute, and then crashed a few hrs later, lol. Now I can say your body does get used to that after a while, so diminishing affects over time, but now I stick to one (usually only drink 1/2) cup of instant coffee every morning when I get to work. It's not very good, but it gives me a bit of a kick, & it broke me from my $1.80 coffee habit every morning. Now I probably spend 10 cents or thereabouts.
Oh, and I rarely drink alcohol. Maybe 1-2 a month when I'm out w/friends.
its fixed in the sense that no matter what anyone orders that day the staff is the staff.
Yes, I know what you're thinking, but its not right. You're ignoring that the fact that the number of staff is determined by the average number of orders + the time to process on order.
I'm right there with you! Starbucks coffee is about 3x too strong, not to mention the high price! I only want coffee in the winter, and prefer to have a cup at home. I'd rather feed my Roth IRA than Starbucks cash drawer.
What do you do once you fill your ROTH IRA? ROTH IRA only has a $5000 limit. It can't possibly take up all your excess cash.
What do you do once you fill your ROTH IRA? ROTH IRA only has a $5000 limit. It can't possibly take up all your excess cash.
Huh? Actually my limit is $6000 a year as I am 53. I fund it to the max allowed. I also have online savings accounts for emergency fund. My point was meant to be slightly sarcastic...about the cost of coffee at a place like that.
Huh? Actually my limit is $6000 a year as I am 53. I fund it to the max allowed. I also have online savings accounts for emergency fund. My point was meant to be slightly sarcastic...about the cost of coffee at a place like that.
Don't you have to have a a pretty modest income to contribute to a Roth in the first place? I never got that, its after-tax dollars, why an income restriction?
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