When selling coffee, one of the first things roasters ask is: “How much will it cost?” Usually, they're looking for more than just your FOB (Free on Board) price. They want the full price they'll pay once your coffee reaches their warehouse. In other words, the landed price.
As a coffee producer selling through Algrano, you’re used to selling FOB, typically not seeing what else the roaster is paying for. But you can also create landed price offers for roasters when you know what they’re looking for. This can lead to better price discussions and even help you be more competitive.
From FOB to landed or spot: understanding what’s what
A landed price, also called a spot price, is what roasters typically receive from importers. It's the final cost of coffee delivered directly to a warehouse in the roaster’s home country. This price covers all costs beyond FOB, such as shipping, importing, and financing.
Depending on where your roaster is located, landed prices are quoted under different incoterms:
- Europe: FCA (Free Carrier)
- USA and Canada: FOT (Free on Truck)
These two incoterms differ slightly in details but essentially mean that roasters take ownership and pay after the coffee is loaded onto their truck at the destination warehouse.
What’s included in the landed price
You might ask: "If Algrano handles the importing, why do I need to know these details?"
Fair point. Algrano does handle it, but knowing these costs gives you a real market advantage. Roasters rely on landed prices to decide if your coffee fits their budget, because the FOB alone doesn’t give them the full picture.
Here's what a landed price includes:
Landed price = FOB + Freight & import + Financing + Currency hedging + Quality insurance + Importer margin
These costs vary:
- FOB price affects quality insurance, cargo insurance and financing.
- Volume impacts freight, import, financing, and currency hedging.
- Destination country affects currency hedging.
- Roaster's usage rate influences financing costs.
Here's a typical example of the breakdown for a full container:
And here's how volume can affect the landed price. This is an example of three different prices for the same coffee:
Five reasons why landed prices help you sell
Experienced roasters often have a sense of the importer charges beyond FOB, but they always seek fresh quotes when sourcing new coffees. These quotes from importers can either facilitate your sales or become obstacles, so it’s important to know what they are.
For less experienced roasters who usually buy spot, the landed price is often the only number they truly understand.
Knowing your landed price lets you:
- Speak their language: Convert roasters used to spot pricing by clearly presenting costs in terms they already know.
- Compare importers easily: See who provides more competitive shipping and importing services.
- Speed up deals: Pre-empt roasters' logistics questions, saving them time and showing your professionalism.
- Build trust: Demonstrate reliability and your capacity to deliver coffee.
- Get market insight: Understand how logistics and financing costs change according to country, order volume and roaster size.
Where to find landed prices on Algrano
Currently, Algrano gives you two ways to create offers:
Public offers tab: Public FOB offers, listed on the marketplace, or hidden, shareable only by link. Available only for Verified Sellers.
Private offers tab: Private landed price offers using FCA for Europe or FOT for North America. Available for both Registered and Verified Sellers.
While the processes are similar, there are some key differences:
- Landed prices vary depending on each roaster’s location and the exact volume they contract. Therefore, creating landed price offers requires precise details.
- FOB offers can list larger volumes, allowing roasters to select the exact quantity they need at checkout.
Here's a simple guide to choosing between FOB and landed offers:
How Algrano makes landed prices simple
We’re working on making landed prices even simpler for producers. Soon, FOB and landed price offers will be unified into a streamlined, easy-to-use process.
Our goal is to simplify sales by increasing cost transparency and giving you tools to negotiate. If you have any questions or need tailored quotes beyond what’s on the platform, reach us at support@algrano.com.
Using landed quotes for benchmarking
Traditionally, producers price coffee based on the futures market, differentials, and occasionally resources like the Specialty Coffee Transaction Guide. Producers with more market experience also benchmark directly against importers' spot offer lists.
Importers regularly circulate these lists, detailing coffees, quality, and landed prices. Roasters trust these figures as relatively stable, with additional warehousing and transport costs determined by release schedules.
You can benchmark effectively by:
- Checking importer lists online (some require registration).
- Asking roasters with whom you have relationships for recent lists.
For example, if importers list similar coffees at USD 4.80/lb landed, and your estimated landed price on Algrano is USD 3.87/lb (FOB USD 3.17/lb), your price is highly competitive. You can use higher quotes as an advantage when negotiating, and even choose to increase the FOB.
If your landed price is above the spot price of comparable coffees, consider adjusting your FOB down slightly. If it's below, you may safely increase your FOB to improve your margins.
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