The success of Seven Cups fine tea over the last couple of decades for the large part can be attributed to “direct sourcing.” It is one of our core values. For us, it gives us the ability to focus on quality. For the tea maker, there is direct exposure to the market. For the customer, there is value and the assurance that they are getting what they are paying for.
There exist only two choices a company like ours can make in sourcing tea: buying from a middleman and buying directly from a tea maker. The latter is the exception to the rule for tea merchants. For time, money, and efficiency, buying direct is a poor choice. There are just a handful of companies that make that choice. The difference it makes to the tea makers and the consumers, the beginning and the end of the supply chain, constitutes profound advantages impossible to attain from middlemen.
The more middlemen involved, the worst deal for the consumer. Reducing the number of people in the middle can be difficult in a market as large and fragmented as the Chinese tea industry. Consider also that there are hundreds of thousands of teamakers. The supply chain looks more like a crocheted tablecloth than a chain.
A complex supply chain if often disadvantageous to tea makers, too. Tea makers without direct access to the market must wait to get paid, sometimes as much as a year. The middlemen don’t pay up front, but only after they manage to sell the tea.
All along that supply chain, if price is the biggest concern of the buyers, buying from middlemen makes sense. Just having to go to one or maybe two sources is cheaper and less time consuming. The buyer may be more concerned with other questions like “can I sell it at this price?” and “will I make my margins?”
On both sides of the equation, neither tea maker nor a middle-man wholesaler will discuss high-quality teas. There is no need for a wholesaler when it comes to the high-end.
The reason for this is two fold: firstly, all quality tea is expensive and secondly, it will still always be sold. The competition for it is fierce. The better the skill of the tea maker the better the price she will get for her tea. There are no deals to be found on the high end, and buyers like us, still come back year after year.
Sourcing high-end teas means accepting this reality.
When approaching a new supplier, we never mention price. We talk about quality. We only talk about price after we have made our selection. We also do the research to find out the going price before we begin our negotiation. Once a deal is made, we pay our vendors promptly.
We believe in the compelling nature of quality tea. At least it is compelling to me, and, statistically, I can’t be alone. The better the quality, the more confidence we have a tea will sell. We set our margins a large fraction below the industry average, which still made our tea the most expensive in the country when we started our business. Even then our retail prices were less than the retail prices of the same tea in China. It caused some pain at the time, but here we are 21 years later, and still growing. Not a lot but steady. It takes a long time of consistently delivering to build trust.
The magic really comes when it’s time to sell tea sourced in this way. Customers have legitimate questions that must be answered in detail. Buying directly is the only way to ensure transparency, and the only means to authentication. Otherwise, the consumer has no way to know what is in their cup, or if they are receiving what they paid for, and if the price represents the real value. A standard for direct sourcing and the transparency that comes along with it, is present in specialty coffee. No such standard exists in the tea industry.
When you read our product pages you will find information that could only come from the tea maker. It is that information that helps us to authenticate the tea. It is rare to find that supporting information. That is because companies often have this information to offer. Simple as that.
Some are even challenged to get the name of the tea correct. How many Long Jing have you come across that don’t even resemble the real thing? Direct sourcing helps ensure that we do.
There is magic in the tea too. It speaks for itself in the mouth. There is no need to develop a palette to recognize the special quality, even if you are a newcomer. It’s not hard to understand why tea holds the title of the oldest consumer product on the planet. When its good, the appeal is instant and natural.
Direct sourcing isn’t just about finding a tea and paying a fair price for it, that tea must also be exported and imported, requiring a knowledge of local and international logistics, laws and regulations.
Of course, you can put tea in a suitcase and bring it back, and there are those that do. That includes us. We go with suitcases full of gifts and fill them up with tea coming back. Every little bit helps.
Or you can send the tea via the Chinese Postal Service, which could take a long time, and run the risk of, well, the Chinese Post. Using the Chinese Post as a business is not legal when either exporting from China, or importing into the US, and your tea could be subject to confiscation in both countries.
Still there are a growing handful of American and Canadian tea businesses that are managing the feat. We hope there are more to come. Competition builds markets, and we welcome a strong market for quality tea in the world outside of China.
To sell those teas legally in the US, you must be registered with FDA, as do all your suppliers in China, and they, before qualifying for the FDA approval, must be listed as a known and legitimate company by Dun and Bradstreet. Tough to do if you are buying from a Chinese middleman.
Buying direct also takes the profitability out of the middleman’s hand and puts in where it should be — the skilled hands of the teamaker. Value to the customer clearly exists and can be proved.
It is not controversial to say China makes the best tea, and the largest variety of those teas, but the above summation gives you some reasoning to the reality that the best teas are still hard to find outside of China. There is an even harder part, from my point of view, and it is cultural. This cultural component is relationship management.
Not only do you have to have a strong relationship with the tea maker and their families and key employees, but also the village, local, and provincial governments, the logistics companies, and the holders of export licenses. It’s work that’s affecting me keenly at the moment.
There is an empty space in our house because my wife, Zhuping is in China buying tea. I got a WeChat message from her a few minutes ago letting me know that she is in Shifeng Village in the mountains around Hangzhou with the Weng family.
Our son Julian’s birthday was the 26th of March, and it used to be that she would not leave for China until after his birthday. The first tea, for the most part, had not been harvest by then, but with climate change, those plucking days have moved up the calendar.
She hasn’t been able to go to China herself since 2018. Andrew McNeill, our general manager went in her place in 2019, but when Covid hit, it shut down travel down altogether.
Our target date for offering new tea used to the second week in April. We were a little late in 2022 because of the lockdown in Shanghai and Guangzhou. While the supply chain wasn’t moving for almost all the tea industry, our supply chain moved for us because our business is personal.
The tea makers out in the countryside are our friends, and in case of the Weng family, and many others are multi-generational.
Doing business in China centers around relationships, and all relationships need to be nurtured. In our case it is 39 tea makers, in nine different provinces. That’s covers a little less than half the total number of provinces in China. Last year we supplied 173 different teas to our customers. We are always adding new producers to the list. All those teas were unflavored, unique teas. A good portion were rare to find in the Chinese market, let alone North America.
Zhuping’s trip this year is to visit of those tea makers in person. It’s time consuming and expensive, but it must be done to maintain our standards.
It’s as fun for her as it would be for anyone visiting old friends and family. It will take her about three months.
It’s exciting for me and the rest of the staff because the spring tea season is like Christmas that lasts for months. Every shipment, and there are many, we get to open packages , smell the fresh tea, and taste the contents. So far it’s been a great year. You can follow Zhuping’s travel on social media.
For long time readers of my blog, I have not been away, but rather working on a book. Yeah, I have been working on it a long time. Don’t even think of the question of “when will it be done?” Certainly not soon.
Nicole Martin Wilson, of the venerable blog “Tea for Me,” Recently wrote a blog asking the question, “Where have all the tea bloggers gone?”
Don’t count me out, Nicole. Expect more regular blogs from me in the future.