This is why our pu-erh tea cakes sell out so fast

So, this is my last batch of the night, and I have 10 kilos of leaves. This is the upper limit of what I can process in my wok. I could have divided it into two smaller woks, but 5 kilos per wok, in my opinion, is not enough if I want to accomplish the steaming to give our typical processing style. So, I prefer to make it in one wok. It's just more tiring because you have to lift more leaves and lift them even more because you want to leave more steam off. Now, the topic of this session is why do our teas sell out so fast? If you've bought some samples of our teas in the past, you might have been disappointed to see that after tasting the samples, the tea cakes were not available for sale. We're well aware of this problem, and I think this is actually limiting the sales on the website. This has been a problem for maybe two years now. I would explain this problem mainly by a cash flow issue. You see, for the past four years, basically since I started this YouTube channel, we've seen an exponential growth in the number of customers on our website. We have about, on average, I would say, 80% more customers, more orders every year. And the orders tend to be bigger and bigger as we have more, I would say, enthusiastic and supportive customers who apparently like our tea since they buy a lot of it. And another factor is that the price of tea increases every year, I would say, by an average of 10%. And this is quite different each year. Like, in 2020, it didn't increase, probably because of the virus crisis. And in 2021, it looks like it's going to be 20% more expensive than it was last year. And this puts a lot of stress on our finances. Because, sure, every year we make a profit, we make more money, we have more disposable capital. But we also need to make more and more tea. So, for example, at the start, we used to sell a lot of tea wholesale, our Jinmai tea wholesale. And now we've had to stop this business model, almost, with our own teas, with our Jinmai teas, because we're quite at full capacity, like all of our tea made in Jinmai is pressed into cakes to our brand. And they tend to sell out within a year or two. So, for example, in 2018, we pressed a lot of cakes to our brand. And at that time, we didn't have that many customers as we have now. So, we've been able to store this tea, of course, at the expense of our cash flow, because a lot of capital was invested in these leaves. And we can see that now this tea is almost sold out. And if we look at our 2020 tea, because of the coronavirus crisis, we had no Chinese visitors in Jinmai. Therefore, we didn't sell a lot of tea wholesale. So, we pressed most of it into our cakes. And right now, we only have a couple of dozen cakes remaining. They are still available on Farmer Leaf, but they will probably sell out this year. And so, it's very hard for us to store tea and sell aged tea. Basically, we have very few teas of our past productions, mainly because they sell. And we prefer to get the cash back in order to satisfy the demand for more tea. Now, every year, we visit new mountains. We meet new farmers who make great work. For example, last year, we went to Mongkou area. That allowed me to make a lot of contacts in Mongkou. And I'd be very happy if I could offer these teas to our customers. Lately, we've been to Kailao mountain, where we found Mr. Huang with his Wulong tea. And these are also excellent teas that I'd like to be able to feature every year. But since we have more and more orders, and we want to offer a wider range of tea, we have a never-ending need for cash in order to buy this tea. Now, the problem, especially with the good tea, is that they don't remain for a long time in the hands of the tea farmers. Good tea sells well. This is true in Jingmai, and this is true in all the famous mountains which are easily accessible by buyers, which means all of Xishuangbanna, Menghai area, Yiwu. So, if you want to wait to get those teas, you can be sure you won't get as good a tea as if you had booked it. And in order to book tea, you have to pay part of the money in advance, and usually you pay the other part of the money when you receive the tea. Then you have to press the cake and sell them. And only then you get the cash back, and you're able to buy more tea or invest the money in other purposes. And so our problem was that we just couldn't... Well, every year, since we have more customers, we tend to press more tea from each mountain, and we press more mountains. So we're always in need of more cash. It's incredibly expensive actually to both make tea in Jingmai, and of course it's still the priority for us, and to then have enough cash at the end of our season in Jingmai to buy tea from other mountains. By the way, I can see that my camera battery is low now, and so it might cut at any moment, but I guess this is more of a podcast form, so as soon as I have the microphone operating, I guess this video will still have some value somehow. So for example, new video recording material would be one of the things I could invest cash in. It's not too high on our priority list. I prefer to still dedicate that money to making more tea. And so now we're... Well, my problem is how do we get more cash? How do we get more cash flow? So you could loan money from the bank, and we've done that to some way, but I don't want to go too far into that, because I can see the damage and the harm it can do to many tea businesses here, where the typical tea business will have lots of debts, and lots of tea in store, and not so many customers relative to the capital invested in tea. Another solution could be to do pre-sales. So for example, you want a cake of La Manoeuvre. It's very expensive material. You could buy it in advance at a discount, and then it would be shipped, you would receive it months after having paid. And this is something that's done in many areas actually in the big cities, where a lot of the tea is actually booked in advance. This is also something I'm not too keen on doing, because I still want to have a last say about the material. For example, what if you book a cake of La Manoeuvre, and I found out that the tea we get is not up to our standards? That will be a problem, I think. So in order to keep that last say on the quality of the material, I don't really want to have our customers pay in advance. And that's also why I don't do the subscription boxes, like where you get a monthly order of tea, because then I would be forced to get new teas every month. And there are times when I just don't have any very interesting tea to offer, and in this case I prefer to refrain myself from adding more tea. Now, what you've noticed is that in the last years, we've had new teas coming more and more often on Farmerleaf. I think there will be an upper limit to the amount of tea that we offer. I don't want to be a supermarket. I want to be able to keep the control on our source material, keep knowing the farmers, knowing each area. So I guess when we'll reach about 50 products at any time, that will probably be a reasonable amount of products. There's also maybe a balance to strike, because you have people who are still beginners and don't really know what they want, and sometimes having too much choice could be a deterrent to buying tea. Although this issue could be solved by offering sample packs, for example. On the other hand, some, I would say, expert tea drinkers would like to have a higher diversity. Maybe they know the taste of each area and are curious on exploring a wider range. So I think there's a balance to strike also on that side. Not having too many products so as not to confuse the beginners, and yet satisfying the expert drinkers in their thirst for more exploration. What I think I'm going to do this year, because we're finding out that we're going to run out of cash, we won't have enough cash, I think, right now to buy all the tea that I'd like to buy, that will be mainly from Mongkou and Monghai area, and also, of course, from Ao Naman, because I know you really like that tea. So I think what I'm going to do is that I'm going to run a discount on the website. I'm going to send some fresh Mao Cha that we've made in Chiang Mai so far, so that you can, every year, have a taste of fresh Mao Cha. And I will put a discount on our Chiang Mai cakes from last year, maybe to motivate some buyers. Actually, I think these are quite worth aging, and we don't have a lot of stocks, so you can't expect us to sell them as aged tea in the future, or if we do, that will be in really low quantity. So I hope that with this discount, we'll have more orders, and we will have enough cash to buy all the teas we want to buy during this harvest. This will be a more expensive harvest than last year, unfortunately. This is just due to the state of the market, and I would say still the rising demand. This is also due to a low yield. It seems that the yields are lower and lower every year. We don't know when it's going to end. It could be due to the pretty dry climate that we've had in the past years, actually. I think the last good harvest was probably in 2018, 2017 as well. We had a high yield, and then 2019, 2020, and this harvest, we had very low yield. So it's actually good news for quality, because you know that the quality of tea is quite linked to the yield. When the tea buds grow slower and in fewer numbers, they tend to pack more punch, and this is what we get in these teas. So yeah, we were having pretty good quality, I would say very good quality this year, and I'm looking forward to tasting them in their cake form, but I can tell you that in their fresh Malta form, they are very satisfying to drink. So I will keep doing that chatting. It seems that my battery held up until the end of what I wanted to say. So I'm going to leave you here, and I hope you're having good tea at home, and I hope that you will maybe take advantage of this coming discount in order for us to have enough cash to buy all the good tea that we want to offer you during this current harvest. Thank you for watching, and goodbye.