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Pu’erh Budgeting. Buying Psychology, Hoarding & A Calculated Strategy

November 28, 2014

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Due to its reputation as a tea that improves with age, pu’erh and the buying culture surrounding it are different than other teas. This makes sense. People are (rightfully) more comfortable buying larger quantities of pu’erh than dragonwell or green gaoshan. However, it is also a buying culture filled with hoarding and constant procrastination (over drinking the good stuff). Other tea types have a natural timer that regulates purchases. Drink it soon or it will get worst. This urgency and rate will vary tea to tea, but most teas are not stashed away in the same way pu’erh is. This article aims to take a step back and compare pu’erh purchases with both other teas and other consumable beverages.

Note #1: While aged and aging oolongs are becoming a thing, it still doesn’t hold much of a candle to pu’erh.

Yunnan Sourcing's Selection

Pu’erh Shopping. Source: Yunnan Sourcing.

Buying Tea Online is Traumatizing +Two Examples

Buying tea online can be traumatizing. It is fundamentally different from buying a number of other consumables, i.e. coffee at a coffee store or a cocktail at a bar. Much of this psychology has to do with spending a lot of money all at once. Spending $100-500 feels like an awful lot of money. This is further exacerbated in the pu’erh sphere with higher quantities and international shipping costs. Let’s take a look at a couple other consumables and how they are purchased.

Coffee vs. big tea purchases. There are countless people spending $3-5/day on mediocre coffee daily  at Starbucks (or elsewhere) without blinking an eye. Over the course of a year this adds up to $1000-1500. Seeing or spending that much all at once would almost certainly cause the coffee drinker to cringe. Even though the amount a tea drinker may be spending is the same or less it is far less traumatic to spend the money incrementally.

Cocktails vs. special occasion tea. A good quality cocktail after tax/tip will often end up costing $11-15 (more if you are in New York or London). What will $11-15 buy you in the tea world if you were to consume it in one gong-fu session. Assuming ~7g pot size, $11-15 will put you firmly in the realm of very good tea for nearly any tea genre. Think about this rationale when you are buying Lao Banzhang, Aged Pu’erh or a particularly expensive tea/quantity.

Why not buy tea in smaller increments? Alot of people do this and it tends to be a bit more palatable. However, because most pu’erh shops are internationally based and will have significant shipping cost, this will usually end up being less cost-effective in the long run compared with fewer but larger orders. Despite the cringe-inducing $300-600 spent on orders, this is usually the most efficient way to buy tea as the relative cost of shipping goes down considerably as the size of the order increases.

Cost of Commonly Consumed Beverages

Item Cost Cost (+25% Tax/Tip) Weekly Frequency Monthly Cost Yearly Cost
Grande Starbucks Coffee $1.95 $2.44 7 $73.94 $887.25
Grande Starbucks Latte $3.65 $4.56 7 $138.40 $1,660.75
Grande Starbucks Mocha Frap $4.25 $5.31 7 $161.15 $1,933.75
A Nice Cocktail $10.00 $12.50 2 $108.33 $1,300.00

Relatively OK Pu’erh is Not Expensive!

So pu’erh compares well with other beverages that are closer to the social norm. How does it compare with other teas? Really, quite well.

Taiwanese high-mountain oolongs, range from ~$0.40/g on average for Alishan to ~$0.71/g for Da Yu Ling (probably not even real). How about Yancha? Anyone that drinks really good Yancha knows the really good stuff costs an arm and a leg, easily $1+/g.

Spending $0.50/g for a tea seems like alot to spend on pu’erh, and it is. Relatively. The relative cost is much higher. Relative to all the available pu’erh options, $0.50/g will place you firmly into the upper-end of pu’erh options. Why does this seem like so much? Much of this stems from the multitude of cheap options available for the drinker. The bottom-end pu’erh available to the western market is much cheaper (and debatably worst) than the bottom end of the oolong market available. However, comparing pu’erh sample prices with small quantities of other teas can even make Lao Banzhang seem reasonable!

Note #1: Buying a cake instead of a sample can reduce the $/g considerably. Do this calculation. Samples will nearly always have an additional markup. This usually ranges from 10%-300% vs. the actual cake or tuo. It is usually a good idea to look at this when considering a purchase. It can sometimes be prudent to simply purchase the larger quantity. Consider your overall purchasing goals. Are you trying to maximize value or to learn and try different teas?
Note #2: An obvious caveat in this comparison. Oolongs are purchased in small quantities, whereas that is less assumed for pu’erh.

Cross-Tea Price Comparison

Tea Standard Quantity $ $/g Sample Markup
Standard Alishan (from price post) 28.35 $11.29 $0.40 N/A
Standard Da Yu Ling (from price post) 28.35 $20.01 $0.71 N/A
Standard Shui Xian (from price post) 28.35 $7.45 $0.26 N/A
Qi Dan (average priced), Tea Urchin 60 $36.00 $0.60 N/A
2003 Orign Tea Hui Yuan Shui Xian, Very Good 25 $26.00 $1.04 N/A
2013 Dashu Bulang (Cheap Plantation Tea), W2T 357 $12.00 $0.03 N/A
2013 Dashu Bulang Sample, W2T 25 $1.50 $0.06 78.50%
2014 T8653 (Cheap Plantation Tea), CLT 357 $20.00 $0.06 N/A
2014 T8653 Sample, CLT 25 $4.00 $0.16 185.60%
2013 Nanpozhai, YS, better quality 400 $86.00 $0.22 N/A
2013 Nanpozhai Sample, YS 25 $7.75 $0.31 44.19%
2014 Yibang, TU 200 $86.00 $0.43 N/A
2014 Yibang Sample, TU 30 $14.00 $0.47 8.53%
2014 Lao Banzhang, TU 200 $323.00 $1.62 N/A
2014 Lao Banzhang Sample, TU 30 $50.00 $1.67 3.20%
1990s HK Style Raw Pu’erh, W2T 357 $149.50 $0.42 N/A
1990s HK Style Raw Pu’erh, W2T Sample 25 $14.90 $0.60 42.32%
Note: This table was assembled to compare the price of different types of teas, not to make specific statements on the sample markup vendor to vendor.

Overbuying, Hoarding, Space & Storage

TwoDog of White2Tea posted on The Three Tenets of Buying Puer. In the third tenet he quotes MarshalN, specifically a post on buying certain teas in large quantities. This can be sound advice. However, taken out of context the advice of simply buying a ton of tea that you find pleasing at the time can also be a really bad idea. It should be noted that the first two tenets involve understanding both pu’erh as a tea and pu’erh economics and should not be ignored.

One thing that can go wrong is messing up the storage of the tea. You really shouldn’t be buying large quantities of pu’erh haphazardly, assuming it will age well. Without some sort of storage plan to at least maintain (and ideally improve) the quality of the tea, it’s probably better to sample widely or seal up tea. Otherwise, your tea will get worst and possibly ruined. In the west this often means making sure that your tea doesn’t dry out. Hong Kong, Taiwan, and Guangdong are far more hot and humid than nearly every place that western hobbyists store tea. Tea simply getting years under its belt is meaningless. Storage matters. Natural storage for any extended period of time in the desert will be a waste of money and tea. Unless you have the knowledge and the capacity or a plan to store your pu’erh, it is best to forget tenet 3d.

Another temptation when purchasing pu’erh is looking at the bargain bin and stocking up heavily on teas with really low price per quantity. This is tempting because pu’erh has many teas whose price is extremely cheap. There are $10-20/357g beeng or $4/100g tuo. Don’t buy into this relative cost idea too much. Tea bought in this manner frequently result in buying loads of mediocre tea. This also conveniently disregards one of TwoDog’s tenets. In the case of plantation tea, TwoDog asserts that it will always be inexpensive and easy to acquire due to the sheer quantity being produced (he draws the comparison with mass-produced coke, see Tenet 2).

Pu’erh takes up space and the cheap stuff may never end up being that good. Perhaps most importantly, unconsumed pu’erh is a waste of both money and space. Tea isn’t meant to be left hoarded and unconsumed, it should be enjoyed. Even though it might be tempting to wait and sit on tons and tons of cheap pu’erh, storage is never a 100% guarantee and tea should be drank. If you are buying tea at a far faster rate than your consumption, you should consider buying better tea and consume most of it!

Pu'erh Stash

A Simple, Approach, A Case Study

This case study uses some calculations and numbers that I use to determine my own purchasing habits.

For the drinker, assuming you have the capacity to store tea, it’s best to make a couple simple calculations. How much are you spending on tea and how much are you willing to spend?

In this case, I’m going to approximate it to about as much as a daily coffee drinker ($3-5/day) amounting to $100-150 (my budget is ~$150). If you are reading this article and don’t know how much you spend on tea, I’d highly recommend that you pull out the credit bill and a calculator!

Now figure out your rate of consumption in terms of dry leaf. How much tea do you use per session and how many sessions/day do you do?

I usually average about 1-3 sessions/day and will consume anywhere between 4-20g a day. I approximate this at about 10/g on average.

How much tea would you like to age in relation to your consumption?

I’ve decided I’d like to consume ~60% of what I buy. This still leaves plenty to stash away. While one could rationalize buying larger quantities by saying they’ll stop buying later, I find that sort of rationale unlikely for myself.

Crunching these numbers (10g/.6*30), I should be buying about 500 grams/monthly (or 16.6 g/day).

Doing some simple math, this means I should be spending approximately $0.25-0.40/g on average. That kinda, sorta drinkable $4/100g tuo ($0.04/g) and factory pu’erh seems awfully unnecessary. This also means that some teas you may’ve written off as hopelessly expensive, might be worth trying after all!

(If I wanted to consume everything in the order I drank, I should be buying about ~300g of tea, or $0.50/g. This sort of a calculation is applicable for those looking to sample heavily, oolong drinkers or those without the capacity or desire to store tea.)

In the case of most pu’erh drinkers with similar budgets, this likely implies they should either be buying better, more expensive tea or spending less on lower quantities of tea!

Note #1: If you like the cheaper tea the same as more expensive tea by all means go for it! Just be aware that you might be able to afford better!
Note #2: Budgets are usually best spread out over a few months. This allows you to spend larger amounts in a single order to avoid paying unnecessary shipping.

Additional Reading: Aging Pu’erh [Marshaln]



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