The common wisdom around pu’erh prices is that they rise over time. This is of course true if we zoom out far enough. If you were to take snapchats of most pu’erh production every few years, the trend would be quite obvious even with a downturn or two (i.e. 2007/2008). Not everything rises equally though. One interesting point of a consideration as a consumer is when and why vendors tend to adjust price. Thanks to Matt for the idea.
Typical Price Bumps Happen Around Chinese New Year/Spring Harvest
This is the most common time for pu’erh to rise in price and when eastern facing vendors make their yearly adjustments. In this time of year, vendors may also get an early idea of what next year’s material will cost which can inform decisions of how much to raise their tea still in stock. For instance, if a vendor sold a 2018 Wangong for around $0.25/g, and found out that the maocha prices from the same farmer will cause a new production (a 2019 Wangong) to cost $0.35/g, they may choose to raise the 2018 to over $0.35/g.
On the western vendor front, this is also the time where we see the most common price adjustments. W2T sometimes emails and announces they’ll be adjusting prices and gives a few hints as to what’s rising. But this isn’t necessarily the norm.. Most vendors just raise them. Yunnan Sourcing raises their prices by around 15-20% per year on average, typically around March. I have virtually no sympathy for the annual yearly whine from people have been drinking for a few years over YS raising their prices, as if it’s an unexpected affront. Scott’s prices are very predictable. Plan ahead!
I think this regular price adjustment is most common in vendors selling freshly pressed young tea each year. The prolific, more active vendors like Yunnan Sourcing and W2T are pretty likely to raise their prices annually, whereas more part-timers that aren’t full time tea vendors may or may not follow through on a price bump every year.
- I’ve also seen Yunnan Sourcing adjust their autumn tea right before autumn, basically the mirror of spring price hikes and spring harvest.
- Trying to predict the exact ups and downs of big factories (see Dayi) special productions is a headache. Generally most tea prices go up over time, but there’s a greater deal of volatility there, different from most other non-Dayi tea productions sold.
The Selection After 4-5 Years is Sparser & More Expensive
I took a subset of the data of pu’erh prices at conception, and added their current prices as of (5/31/2019), comparing them to their original price. The teas chosen were 2014-2015. I wanted to pick from a couple years where a reasonable amount of vendors were making tea, but also give it enough time for them to adjust prices. If vendors are choosing to adjust their prices yearly, this gives them 4-5 adjustments for this data subset.
2014 & 2015 Spring Products by Western Vendors
| # Products 2014 | # Products Still Available 2014 | Price Rise 2014 Harvest | # Products 2015 | # Products Still Available 2015 | Price Rise 2015 Harvest | |
| White2Tea | 6 | 0 | – | 9 | 3 | 33.80% |
| Crimson Lotus Tea | 10 | 0 | – | 4 | 0 | – |
| Tea Urchin | 11 | 9 | 1.12% | 8 | 8 | 10.34% |
| Yunnan Sourcing | 16 | 16 | 118.34% | 16 | 16 | 73.94% |
| Chawangshop | 4 | 3 | 58.78% | 4 | 2 | 83.44% |
Many vendors productions sell out. We don’t really know what Crimson Lotus would do if they still had stock four years later. Yunnan Sourcing prices (who produces several levels of quantity more) have unsurprisingly risen the most. But again… In a 100% predictable fashion. We know that they raise their prices by around 15-20% per year. 15% prices rises across 4 years ends up being ~75%-110% price increase. Put across 5 years it is ~100-150%. And this is exactly what the data reflects, for essentially every single tea. The other vendor price adjustments have been more variable, anywhere between nothing to 80%.
- The less-active but still selling tea vendors may offer some of the better deals for tea that is a few years old because they aren’t raising the prices as regularly. I think Tea Urchin and Hou de Asian fit this category, and even Yangqing Hao to a different but still relevant extent.
- One related point I’ve made many times is the price of tea at conception has also risen a ton. So even though pu’erh prices tend to rise over time, if that rise is slow enough compared to maocha prices rising they can still be better to buy than young tea.
Restocking & “Blogger Effect”
When a vendor sells out of a tea that is not their own and restocks it, sometimes the source’s price has changed. The vendor will then have to choose whether or not to buy the tea at the higher price. This can explain why that 2005 Changtai that originally cost $30 now costs $75. If the tea is selling well and the vendor needs to buy another jian at a higher price, it only makes sense that it costs more for the consumer too. This can also have the unfortunate effect of creating fairly rapid price hikes. If a tea is hot at the source it can rise by a lot more than just 15-20% in a year.
One effect that has been argued in the teasphere, is the blogger effect. The idea is quite simple.. A blogger reviews a tea and then the price rises immediately, due to a (greedy) vendor sensing more demand. I’m skeptical of this. I think bloggers have an overall small effect on teas selling out and most of this can be explained by just the vendor needing to restock. In my opinion it is closer to correlation rather than an actual causal relationship. A popular tea is more likely to be reviewed, but also more likely to be restocked independent of a review. There is the caveat that when someone does give a rave review that sells a ton of tea (see below), restocks become necessary increasing the likelihood of a price bump. This effect is a little different from the purported blogger effect, which under the definitions I’ve seen requires the vendor raise the tea price before they’ve sold a significant amount.
When is the Best Time to Buy?
I’m not sure that there is a hard rule, but given the patterns above you can probably figure out intuitively based off your own situation. If you know what you want from Yunnan Sourcing, getting it in the first year before any price hikes is optimal. It’s also a decent idea to duck in an order before the Chinese New Year and the corresponding price hikes if you plan to buy anyways. You won’t be able to order vendor’s new tea, but that’s the tradeoff you’re forced to make. November is also a good time. The biggest sale for many of the western facing vendors is Black Friday and/or Cyber Monday in November. The biggest Chinese sale (taobao) is singles day (11/11) also in November.
12 responses to “When do Pu’erh Vendor’s Raise their Prices?”
James,
Thanks for presenting the data on this! I initially asked you to put out this data because it gives greater context to your posts about the rising price of puerh and offers a tool for the buyer to buy smarter.
Buy less, buy better… puerh buyers in the west already know this line but also…
Buy Smarter, Buy better…
More specificity I wanted this data out there because your last post on this topic
https://teadb.org/2011-2018-puerh-prices/
https://youtu.be/s8jybkXf88E
had Scott of Yunnan Sourcing state that everyone knows that white2tea and Tea Urchin mark their puerh up higher than Yunnan Sourcing and Chawangshop. I don’t really disagree with all of that statement in principle but there is no way for us, as a consumer, to actually measure that.
One the other hand, this data does show what I and many long time puerh drinkers already know, that although places like Yunnan Sourcing and Chawangshop offer a pretty good offer on newly released puerh but then rise their prices much higher year after year.
It really just speaks to two different business models of selling puerh. The first of Yunnan Sourcing and Chawangshop is a more traditional model where the vendors press more puerh than they can possibly sell and warehouse their puerh at a cost. This is the traditional or historical model of selling puerh that they used to do for many many decades and is kind of the model of those who warehouse lots of factory puerh. The trick for the smart customers is to sample when they are released and buy in volume at that time for later.
On the other hand, white2tea and Tea Urchin use a more modern puerh business model based on attempting to sell most of their stock up front without wearhousing as much over time which can cost lots of money as Scott rightly points out. For these vendors it is actually smarter for the customers to buy their older stock which hasn’t been marked up as much from the initial price at time of release. This is how I have guided my puerh purchases over the last year or so after tapping out some of that cheap Lincang before it went up in price.
Buy Smarter, Buy Better…
Peace
Thanks for the comment and idea Matt. I started with your original comment and my article ended up being fairly different from what I originally intended too. Hopefully it is still useful for some people!
Your buying strategy makes sense. While I’ve stopped buying young raw pu’erh, I still buy some ripes and I’m always looking at teas Scott has made in the last couple years.
white2tea warehouses in Guangdong, and has tea stored other places as well. Some small companies like EoT and Adventure warehouse some tea in Malaysia for the climate there and historically because tea turns out well. Chawangshop is actually a tea house/shop. I don’t think many sellers store in their homes, at least not entirely.
Houde’s owners sold out of a large walk in closet for much of their time…
Omg, how many times did this guy mention that it was his idea behind this blog post that James has written…
Sorry if I came off as an ass. Couldn’t have done anywhere as good of job as James did in this article so didn’t even attempt it. Thanks again James.
Peace
No need to apologize Matt. I didn’t find it inappropriate or too much.
Just for the record.
2014 we had 37 productions, 33 remain.
2015 we had 34 productions, 30 remain.
We raise prices on spring pressings around March 15. Autumn pressings around September 15th. For the ripes, if they were pressed in the first half of the year then we increase the price on March 15 (of the following year), and if pressed in the second half of the year on September 15 (also the following year).
Price increases have to do with current year prices, cost of warehousing (our warehouse rents in Kunming have gone up about 450% in the last 8 years), and of course also reflect our need for an ROI. It should be mentioned that we also bear some serious risk in warehousing. In 2014 we lost about 45,000 USD of pu-erh due to an upstairs neighbor’s broken water pipe. Insurance is not really an option in China for pu-erh, so we assume all the risk ourselves. I still have anxiety attacks on holidays and weekends that we’ll suffer an even more devastating loss (theft, fire, water damage) than we did in 2014.
It’s good advice for people to purchase and hold the teas when they come out. Most of our productions are quite small (Ripe 60kg-300kg, or Raw 10kg-180kg average being around 60kg), so they will sell out and the prices will go higher as the only stocks remain in the hands of private collectors.
Thanks for the comments and insight Scott. Those price raises make sense and I don’t really understand those that get surprised by it every year.
I also just wanted to leave a quick clarification to explain the number discrepancy. The dataset (which is linked in the article for those interested) I’ve been using is just spring raw teas, rather than all products.
Ah ok… I figure it was just spring teas, since it’s pretty much half the total number for the year. I’m going to be shocked when I tally up the number of unique productions for 2019. Finally found an outlet for my hyperactive collector brain in pu-erh. I wanted to correct the my statement about cost of warehousing. It should be about 320% in the last 8 years (not 450%).
James,
There is also another time when vendors raise prices that you have not mentioned.
Some vendors raise their prices on some puerh when their stock is almost sold out and it cannot be restocked from suppliers. I think Yunnan Sourcing does this sometimes, I’m not sure about other vendors.
To me this price raise also makes sense because lots of people have likely purchased the cake and what supply is left is of more value. It’s basically an increase based on supply and demand.
This is the type of price increase that I have moaned about in the past. But when you purchase and it sells out you don’t seem to feel as bad about the increase all of a sudden and are just grateful for what you have…. hahaha
Peace
I don’t do that anymore as it created such an outcry, although in Yunnan this is an accepted practice.