Cutting Out the Middleman (And is it Worth It?)

As westerners we are in a land far from the production of our beloved Yunnanese pu’erh and from the huge tea markets of China. This seemingly locks us into a constant struggle to eliminate as many middlemen and meddling hands as possible between us and our teas. The western market for pu’erh is far smaller and physically further from the source, giving east Asian vendors little incentive to accommodate us. It’s no surprise that there is a western premium that most of us pay to get our teas. However, unlike oolong or green teas, pu’erh is also sold with very commonly label. For mass-marketed teas like Dayi or Xiaguan it is very easy to find the Chinese prices for the tea using Donghe or Taobao. It is also possible for the willing and resourceful to buy directly from the Chinese market (via Taobao). This article examines this and several of the different tea types and approximates the markups.

Yunnan Sourcing Cakes

Yunnan Sourcing Cakes.

How do Vendors Provide Value?

This is an important question, that everyone should be asking constantly. There are many ways in which a vendor can “creates value” for its consumers. Depending on your situation, some are far more important than others. Is your vendor a curator of teas, like TwoDog over White2Tea? Are they really close to the source, like Yunnan Sourcing (lower costs, but longer/more expensive shipping)? Do they have great knowledge or long-rooted connections and have access to teas that can’t be produced elsewhere (Wistaria, Best Tea House, Bana Tea)? Is your vendor producing the tea themselves? Are they paying for seasonal flights to China? Marketing costs? A fancy storefront? These are all factors built into the pricing of the tea. It’s also important to consider where else you might be able to find the same tea (or something similar. Many of these questions will have an impact on the tea itself, but many do not. (further, essential reading: Marshaln post)

Note #1: For pu’erh, buying from a stateside vendor will usually come with a higher pricetag (this varies) but perhaps a lower shipping cost. In the case of tea that can be purchased directly from China, it is usually most cost-effective to place fewer, but larger orders.
Note #2: For those concerned with getting good value, I would be very wary of any free shipping. They are understandably appealing for the simplicity of the purchase. However, the shipping is simply built into the item cost (and a way to psychologically incent you to buy). Upon closer inspection, you’ll likely find that the markup for vendors that offer “free shipping” is consistently higher than other operations with shipping costs (often egregiously). It also scales poorly with larger purchases/multiple items.
Note #3: An alternative to Taobao for the brave is the Taiwanese forum T4U. Just be prepared for a bank transfer.

Tea Urchin Recommendations

Tea Urchin Cakes. Source: Tea Urchin.

Tea Types Breakdown

For many teas, these costs will breakdown and the markup will significantly vary.

Vendor Exclusives/Productions

If a vendor has their own productions, it can make a compelling reason to buy from certain vendors. Since the same tea is not really available anywhere else, there aren’t any obvious middlemen involved. Consider the vendor’s experience, connections and how close to the source they are. Where are they based? Are they spending alot of time in Yunnan early in the season (a good sign) or are they showing up late in the season and buying leftovers (a bad sign). Although the western options are more limited, this is one of the few places where it is possible to cut out many of the middlemen despite being a western consumer.

Reference Point: Look up the price of maocha from that particular area. This can also be a way to eliminate obvious fakes (if the tea is marketed far below market value).

Note #1: This is perhaps the biggest reasons why I buy from vendors.
Note #2: Many western vendors haven’t really been producing for many years so if young pu’erh or gushu isn’t your thing, then perhaps there isn’t as large an incentive to buy.

Young Plantation Tea (both raw & ripe)

Includes big factories like Menghai/Xiaguan as well as other moderate-large sized factories. These teas will usually be bought by western facing vendors in China and then resold to the consumer. It is very possible to buy these sorts of recipes from Taobao. The advantage to buying from Taobao is obvious. Even in the case of western vendors with relatively small markups, there will often be a markup of 100% the item cost! This markup can reach more egregious prices the more hands that get involved. If you are tonging up some young factory tea, then Taobao can be a cost-effective way to go.

Reference Points: Donghe Tea (for Dayi), Taobao + Babelcarp.
Perils of Cutting the Middleman: Fake tea!!! In the case of Dayi, fake tea is all-around. Quality varies. Some are OK, some are surprisingly OK, but most are varying degrees of bad. The advantage of choosing a reputable vendor is that they should know the legit sources vs. the not so legit (although this is not always the case). If you choose to use Taobao, make sure you read reviews and generally know the system. Even then, it’s definitely not 100% fool-proof. Many vendors may also source locally from smaller factories or productions which are not guaranteed to be available for purchase on Taobao.

Note #1: Most ripe falls into this category.

Big Factory Pu'erh

Branded Big Factory Pu’erh. Source: White2Tea.

Other Brand Tea (Young Pu’erh)

Smaller labels that aren’t necessarily directly western facing, i.e. the Xizihao and Hailanghaos of the pu’erh world. Many of these eastern tea producers will be loosely or closely connected with a western vendor and have their tea sold through that outlet. This is similar to buying a vendor exclusive with one additional middleman between you and your tea. Markups will vary here. Oftentimes, these connections and sourcing are done in-person and locally, making buying from the western vendor the only option..

Reference Point: Taobao (maybe).
Perils of Cutting the Middleman: Tea may not be available. Some fakes.

Note: One advantage to using Taobao here is it dramatically expands the amount of options to buy.

Semi-Aged/Aged Teas

Here’s where things get a little tricky. For vendors this is priced similarly to younger plantation tea, and teas will be marked up in a similar fashion. Some vendors will find these cakes in person and others on Taobao. So why not just buy the tea straight from Taobao?

Well.. In addition to fake tea, storage throws in another layer of confusion. Sometimes you’ll be able to find find the exact same tea and storage the vendor offers on Taobao. Other times it might be the same tea but have totally different storage. This issue becomes more important the older the tea gets.

There’s also the case of white label teas. These can be difficult to track down straight from the source. Here the value the vendor provides is the curation and sorting through the riff-raff.

Reference Points: Donghe Tea (Dayi).
Perils of Cutting the Middleman: Strong likelihood you’re getting a different batch of tea that has undergone different storage.

Note: Once teas reach a certain age on Taobao (search for 90s cakes), there are just so many contributing factors to the tea quality that most basically become White Label cake. Especially true for off-brands, disreputable sellers and rolex-fake, underpriced tea.

Yiwu Sessions

Tea Sessions.

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10 Responses to Cutting Out the Middleman (And is it Worth It?)

  1. Cwyn says:

    Seems like we have a middleman all throughout, unless buying directly from the factory or farmer.

    • James says:

      Hi Cwyn,

      Thanks for the comment. This is true. By my estimations, it is more about reducing middlemen and the distance between us and the tea, rather than eliminating the middleman completely.

      Cheers,
      -James

  2. gerry says:

    Here are what i consider my most trusted “middlemen” of tea in no particular order: 2Dog at White 2 Tea, Scott and his Yunnan Sourcing, Tea Urchin, Crimson Lotus and then there are my tea consorts or mentors if you will, that while not official “middle men” I have come to trust and benefit from their tea insight, those being the likes of Hobbes and his blog, Tea DB, and my local tea gurus at Ma-cha tea company in Madison.
    Yes maybe i am missing out by relying on these “middlemen” so to speak, maybe i am missing a bargain or the excitement of the hunt for that one tea that is my version of the elusive “White Whale” or that one tea that is like tea nirvana on my tongue.
    For now none of my aforementioned “middlemen of tea” have yet to steer me wrong, in fact i seem to barely scrape the surface when it comes to all the good stuff these “middlemen” come up with, there is way more than enough to keep me occupied and satisfied with a trusted product, complexity, diverse taste experiences, and overall a mighty dandy fine product. Am I missing bargains by using the vendors middlemen mentioned above? I do not think so I feel each sells at a very fair price, a price i choose willingly to pay for them to provide me with my elixir of life, my drug of choice. Now if the tea gurus middlemen mentioned above start to charge me for their tea advice then maybe i will have to look into cutting out middlemen and when they do start charging for their advice that will be a very dark day in the tea galaxy.

    • James says:

      Hi gerry,

      Thanks for the detailed comment! Those are some fine vendors, many of which I also buy from regularly. You also bring up some good points as to the thrills of tea hunting.

      Here’s a few additional thoughts/musings:
      I guess my main point wasn’t to suggest we should be all buy from Taobao or whatever, just to give a few more points as towards picking a vendor and their teas.

      The same vendor will be at different parts of the food chain pending the actual tea they are selling (i.e. they are more middlemen when they source factory tea vs. their own productions). After browsing Taobao alot for the past few months, I’ve realized that this part (and markup) really varies.

      Cheers,
      -James

      • gerry says:

        Sorry sometimes silence should be golden, to much free time over the weekend caused me to go on a tea rant, way to much said there on my part. I did fully appreciate the article as i do all the insight you and Denny do both video and written, thanks

  3. Kritiker says:

    I think you’ve done a great job of analysing the pluses and minuses of dealing with vendors versus buying on Taobao, and your point about storage conditions being an issue for older teas is especially relevant. However, in my experience uncertainty about storage can work both ways. For instance, I once bought a sample of a 2005 puer from a western-facing vendor that had hardly aged at all and must have been stored in near-vacuum conditions. The same tea acquired later from Taobao had been dry-stored more conventionally and was much more enjoyable.

    In the end, once you factor in the generally higher shipping costs, the inability to ask questions, and the absence in most cases of samples to help minimise outlays on duds, buying from Taobao overall probably hasn’t saved me money. But I keep on using Taobao because it gives me access to a much wider range of teas than are otherwise available, backing up one of the comments you made.

    • James says:

      Hi Kritiker,

      Thanks for the comment. I agree in all respects. Using a good western-facing middleman helps smooth out the whole experience quite alot. Buying from Taobao is far from a great customer experience. It’d be a pretty poor way to start buying pu’erh.

      I think the arguments about cutting them out, once we start talking about less-specialized vendors or those even further from the source. When it comes to questions of storage, there are definitely a fair number of western vendors that don’t really know what they’re doing but if we’re talking about the more reputable ones, I think the storage is a more known quantity.

      Cheers,
      -James

  4. Carolyn says:

    I have to say, using a middleman is the way I choose to go. I find someone like Linda Louie at Bana Tea Company, or Stephane at Tea Masters, get a lot of samples, and choose what I like. I have found that different vendors will sell similar style teas. I think maybe I am lazy and not willing to do the research to buy from a Chinese Ebay site. I am willing to pay more to have people with more access and expertise than me sort through the mediocre and bad tea, and find the good ones.

    I can see the fun in hunting through Taobao and finding something really great. I just think in the end I would end up paying more with all the “duds” just to find a few treasures.

    • James says:

      Hi Carolyn,

      Thanks for the comment. Those are some fine vendors :). For someone who babbles on alot about Taobao and middlemen, I really do spend most of my tea budget on western-facing vendors.

      Cheers,
      -James

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