Customer Question: My family grows tea in Zhushan, with an annual output of about 1,200 kg. We used to wholesale everything to tea merchants at a wholesale price of around NT$1,000 per 600 g. After deducting harvesting wages and fertilizer costs, the income split among the three of us at home is really not much. Recently, we’ve been thinking about opening a tea shop in the city to sell directly (using our existing storefront). How much capital is needed to open a tea shop, and how much would it cost to stock tea from other tea regions?
Liao Chang-Xing Tea: Hello! We also started out as tea producers, and we’d love to share some insights with you. Actually, tea farmers opening their own tea shops already have a huge cost advantage over others. First of all, you have your own source of supply, and since it’s self-produced, your costs are definitely lower and the quality is much easier to control. Otherwise, just trying to source good ShanLinXi tea would cost tens of thousands in inventory per season! Plus, since you have your own storefront, you save on rent and interior decoration costs. You could say you’re already winning at the starting line!
In the beginning, you can focus on selling your family’s tea and teas from neighboring farms, and you don’t necessarily have to sell teas from other regions right away. By making ShanLinXi tea your main offering—covering areas like Yangwan, LongFengXia, Fanzitian, Sancengping, and the mid-to-low altitude areas of Zhushan—the market for these teas is already substantial.
If you want to stock everything at once, assuming a wholesale batch of 18 kg per tea region, the average wholesale price for Lishan is around NT$2,200, Dayuling is around NT$5,000, and Alishan is around NT$1,400. This means you would need to prepare about NT$300,000 per season. For a small shop, NT$300,000 is quite a heavy burden. We recommend not doing this at the start. You should wait until your own tea business stabilizes before bringing in Alishan, Lishan, and Dayuling teas. Alternatively, you can partner with nearby tea merchants in the beginning and source teas from them when your customers need them. As long as there’s a reasonable profit margin, I’m sure fellow merchants will be more than happy to help!