I hear this often from new cafe owners:
“I’m going to keep my coffee price low to win customers. Once I build up the business, I’ll raise it.”
It sounds logical. Generous, even. But in reality, this mindset can quietly hold your business back. Pricing low from day one isn’t a clever strategy. It’s a costly one.
Let’s talk about why.
Price is a signal
When a customer sees a $4.50 flat white, they make a snap judgment. They don’t just think cheap. They think less. Less care, less quality, less effort.
Price shapes perception. Every time.
Even if you’re pouring delicious specialty beans and silky milk, the price sends the first message. People naturally associate higher prices with better products. A low price often says the opposite, even when it’s not true.
So when you underprice, you're not offering value. You're casting doubt.
Read The rising price of delicious coffee (and why it’s worth it)
Busy doesn’t mean profitable
Plenty of cafes are full and still struggling.
I’ve seen operators run themselves into the ground, pouring hundreds of coffees a day, chasing volume with tight margins. Staff are exhausted, the owner is stressed, and the business still isn’t making money.
More customers only help if you’re making sustainable margin on each cup. If your pricing is off, then being busy just means you're losing faster.
Would you rather sell 100 coffees at $4.50, or 70 at $5.80? Fewer cups. More margin. More breathing space. More time to deliver a great experience.
Pricing is not about being the cheapest. It’s about being sustainable.
You can't raise prices later without pain
The idea is to start low and lift prices later. The problem is, that rarely works.
Once you anchor customers to a cheap price, they expect it. Even a small increase can feel like a big shift. You’ll hear the comments. You’ll see the online reviews. And you may lose the very loyalty you were trying to build.
Even large brands get backlash when prices go up. For an independent cafe, it hits harder.
It's smarter to set a price that reflects your true value from day one. Then make small, periodic adjustments over time. That way your customers stay with you, and your business stays healthy.
Read 10 things cafes should be doing right now.
Coffee is not a loss leader
Here’s a critical fact. In most cafes, coffee and beverages account for 50 to 65 percent of total sales. That makes them the foundation of your revenue.
So using coffee as a loss leader, a break-even item, or an “in the door” sweetener is the wrong move. You are discounting the very thing that keeps your business alive.
Coffee isn’t a giveaway. It’s the product your whole cafe is built on. Your price tells people what you believe it’s worth. It tells them what kind of experience and value you aim to deliver.
When you underprice it, you’re not just hurting your margin. You’re telling your customers, your team, and yourself that it doesn’t matter. That mindset compounds over time and erodes your brand.
Offer value, not discounts
Promotions are smart. But permanent discounts are a trap.
Instead of locking in a low price, run a short opening offer. Add a free cookie. Introduce a locals card. Create a buzz without cutting the heart out of your margin. Use marketing, use social media, and attract customers through levers other than price.
At Pablo & Rusty’s, we often help partners find ways to attract new customers without devaluing their product. The key is to reward curiosity, not rewrite expectations.
Price is the foundation. Offers are just the welcome mat.
Read A fresh look at cafe loyalty cards.
Know your costs. Respect your worth.
It’s not cheap to do coffee well. Delicious specialty beans, proper training, fair wages, quality equipment, tasty milk, great fitout and vibe. It all adds up.
If you charge too little, you either absorb the loss or start cutting corners. That’s when quality slips. That’s when staff get tired. That’s when the experience suffers.
We believe a small flat white should start at $5.50 and be heading towards $6. That’s what it takes to run a quality operation today.
You're not just selling coffee. You're selling care, craft, and connection. People are willing to pay for that. But only if you believe in it first.
Read Global coffee prices: Why Australian cafes and consumers need a fresh perspective
Choose your space in the market
Your price positions your cafe. It says who you are.
Are you aiming to be fast and average or premium and delicious? There’s no wrong answer but you can’t be both.
If you want to be known for quality, you need to price like you mean it. If you want to build loyalty, base it on service and experience, not a low price.
A $5.80 flat white with care, conversation and consistency is better value than a $4.50 one with nothing behind it.
Read Cafes, we all have a choice to make about prices.
Play the long game
The goal isn’t to open strong. It’s to stay open, long term.
Start with pricing that reflects your true value. Don’t chase volume at the cost of viability. Attract the kind of customers who care about quality, not just price.
They’ll stick with you. They’ll spread the word. They’ll help build your future.
Charge what your experience and delicious coffee is worth. Trust your offering. Be proud of your price.
Because what you charge says everything about what you believe.
