The Price of a Good Deal is Rock Bottom!
Panni: “Mom, what are you doing, this cannot feel good.” Dora: “Oh it feels better than dealing with App Discount Stores, it is also about equally useful…”
Well it happened, I lost my cool. Yup, your mindful, loving yoga teacher just went apeshit on a poor third party Daily Deal Merchant via phone. I realized halfway through the conversation that I had the unfortunate gentlemen for lunch, so I slowed down, but his insistence that he is there for my good, just made me so mad that I had to finish the conversation with asking for his manager. Yup, you can take the girl out of Eastern Europe but not Eastern Europe out of the girl. I am direct, I am confrontational, and I am quite determined in business, especially when I am dealing with large companies that think they can do as they wish with small businesses.
I am a force to reckon with, I apologized to the poor merchant support person, but I needed him to understand my side of the business.
So what set off the volcano of Dora? Ha, this morning I received an automatic email from the Discount Dealer on encrypted legal language to agree to the “updated terms.” Upon reading, I concluded that I had no freaking clue what I was reading. Since I never ever sign anything that I do not understand, I picked up the phone. I do wonder how many store managers and owners do just simply click the “agree” button…
Once I got through the arsenal of transfers through automatic phone messages, I reached a live person, yes the poor gentleman that I had for lunch… He proceeded to explain to me that the terms would discount the already discounted Deal to “drive exposure and revenue on the market.” In other words, they are trying to put the deal on sale (from which I would, of course, get less percentage of income) but get this, I would have no say on when they put a deal on a sale or by how much. Furthermore, if I don’t agree to the new terms, they would push my visibility down on their platform because they are trying to create preference for deal on deal customers.
Starting to see why I lost it? Our offer is already over 70% off the price. Which is OK because it is for NEW customers only. I would go bankrupt in less than 3 months if I were offering these prices to repeat customers. I am willing to take the cut in order to drive new customers to the business.
Upon hearing these new terms, I simply said: “I am violently against this idea, this will cram small businesses even more. I am so sick and tired or App manufacturers bleeding revenues for brick and mortar businesses. I am sick and tired that these app manufacturers empower big businesses and push small individually owned businesses further down in exposure because they cannot keep up with the discount game. How do I decline this offer?”
I was livid. Honestly, I am breaking a sweat from anger just writing this!
Oh oh, but that did not take the cake! The pinnacle of the discussion was when I asked if we could increase the price a little bit since I have 5-star reviews and over 350 people reviewing my business. Could we bring attention to my business not by cutting prices, but by highlighting quality?
Guess what? The answer was no!!! Yeah, you heard it right. No, quality does not matter, but if you can sell $1500 / month on the platform then we can increase the prices. To which I answered “Sir, that will never happen because I cap the sell of tickets at 50 customers/months in order to keep balance in revenue and quality of experience. $1500/ months would flood the business and quality would suffer. He said, well increase the cap, if you can sell over 10 times your current rate, we can talk about raising the cost of the deal. And yes, this was the point of no return for Dora… Was not pretty, I am not proud, I even apologized, but seriously?
At the end, responsibility goes to all of us.
Are we addicted to Cheap Deals? Are we the consumers creating a marketplace that drives manufacturing overseas and small businesses out? I, unfortunately, have to say, yes, by wanting cheaper and cheaper goods and services, we are creating our own downfall.
I don’t know what the solution is. I do know that as a business owner all I can do is decline terms that do not serve me and hope that enough business owners will do the same. App manufacturers have one goal, that is to sell volume since they make their cut based on pure numbers. These are precisely opposite goals from a brick and mortar business. Ideally, we would be helping each other grow. But there is no mutual goal, if the bottom line of cheap deals in app stores cannot meet the need of small business to thrive. If the bottom line is race to the bottom, that is exactly what we will get. We will hit the bottom…
If you are interested further in how to shop responsibly in an app heavy worlds, read my previous article.