When our regulars visit us, one of the most frequently asked questions is “How’s business?”. Well, business hasn’t been good and the main reason is we don’t have many repair jobs for the Bezzera as they usually don’t have much things to fail.
The thing about selling the espresso machines is the profit doesn’t really come much from selling the machine. It comes from recurring maintenance and repairs. If we factor in the cost of running the experimental room plus the overhead specifically for the machine, together with the storage charges, we are practically running heavy losses selling these Italian espresso machines. Things were better when we carried other brands. Since going full Bezzera, all we have are overstock of spares that have sat idling for years.
Profits are more regular from those E61 espresso machines as they have a lot of gears in the grouphead wearing out and gaskets rupturing. Many would expect the E61 to be more reliable machines, but our numbers somehow paint a very different picture. These machines can be very time-consuming for repairs as they can be really dirty inside, so we kind of dislike it when customers bring them for service.
What’s worse is we emphasise a lot on water softening using these little Bezzera softener cartridges. This is something which vendors usually don’t wish to reveal too much as it is negativity which can deter a prospective customer from buying the machine. Also, what’s so bad with customers killing their machine with their own water and reward us with extensive and expensive repair jobs right? If the machine fails due to their own water being bad, the blame lies on the user or environment, not us. Not uncommon to see some online gurus or vendors advocate on cleaning the machine with acid aka descaling regularly. Which is in our opinion futile for this genre of machines, and usually does more damage than solving anything. It’s definitely better advice to prevent cancer than going for chemotherapy regularly.
With our crystal clear presentation in the Choose the right espresso machine article. We spelt it literally to you that the Bezzera’s BZ thermal efficient grouphead lines are better engineered in many ways. Being faster in starting up, cleaner, less maintenance, less daily cleaning, and smaller footprint. These are the practical things users look out for. Maintenance is cheaper as you can see on our price shown here. So for the vast majority who really do look and think, will gladly pick up a BZ. I own a BZ machine myself and I’m getting ready to give my daughter one too. Unfortunate for us, these BZ machines don’t require much repairs, especially the BZ16 or those with PID, they are undying monsters. So that means that repair jobs required for them are generally lesser and there goes our revenue.
We also made a very poor decision to no longer carry double boilers which cut our profit and competitiveness. Profit margins for double boiler are much higher as they command a higher retail price. As illustrated in this article comparing heat exchangers versus double boilers. As far as we can see in real-life scenarios, a vast majority of the users don’t really enjoy much practical benefit from double boilers. There are some users that might benefit, but it’s probably 95%, not you. The changes in taste you can make by adjusting your grinder has far greater effects than adjusting your machine. Even in taste tests, not many professionals can tell the difference with a few degrees up or down. It does benefit us by selling you a more expensive machine and charging you more for repairs when they return. They also do return more frequently simply because double boilers have much more parts to go wrong and fail.
People often recollect that appliances they owned a long time ago, seem to last much longer than those seen today. That’s because those vintage version 1.0 appliances only have a few essential functions with much lesser components to fail. It is never clear if those advertised benefits in more complicated modern machines can possibly help you positively. What we are sure of is the long start-up time, and higher cost of owning or maintaining, and higher failure rates, will definitely affect the consumer. So not having these double boilers or complicated machines in our store is another bad decision from our company that shaved off so many lucrative repair jobs that we could possibly have.
Another thing about our declining revenue comes from the sales of beans. Sales of beans are soaring but if you notice, most of our coffees are still at pre covid 19 prices. In fact, most of the coffee we are selling as of today in August 2022, are the same prices we offered 5 years ago. As you should know by now, inflation is real and if you don’t know yet, the average cost of coffee beans in the world has doubled. You can fact-check with market data or the wall street journal to know if we are telling the truth. Since our partners in Italy are not cutting corners to control the price, we have to take their stock at real-world prices. We are basically earning almost nothing doing charity since the start of covid 19.
The even worse news is, we openly tell you the secret that our best seller is the Arcaffe Margo, which is ridiculously cheap for something imported all the way from Italy. Produced by some masterclass Forbes recommended roasters. The quality is not the best in our collection but is still better than many roasters. It is a blend designed for cafes in Italy, a commercial-grade, a real classic and classics are always well-received. Produced by one of the most esteemed coffee brand in Milan that has been specifically featured by Forbes. People or companies are buying Margo BY THE CARTONS. And again, our company management team has done a terrible job because we are practically running losses selling at those prices.
We do not know what lies in the future. We probably going to open a cafe or venture from a supply chain to some new businesses, still within the coffee industry. We need a steady stream of more money to keep this fruitless e commerce project afloat. Or maybe, we need a more witty management team with many methods to make the “best use” of our customers. Since we are rather free and with almost no machines to repair, we probably start blogging over meaningless things happening in the experimental room soon, so stay tuned.