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    The Dilemma of Discounting    

Why So Late Discounting? 

We are usually pretty certain about what's the right thing to do as we are a pretty ethical bunch, but discounts have strangely been a flash point in our office.
It was agreed that in order to encourage people to switch their packaging to green earth positive packaging , we were going to have to price our products as low as we could go and still make a profit, we was that this would encourage people to make the change.

It worked but only partially, as it meant that everyone paid the same price which our smaller customers were happy with but larger customers weren't so happy.
This led to us being asked ( quite often) "what's the encouragement for me buying in bulk",  so we had to re-look at our pricing and decide what approach suited everyone and we even had the added problem that even without discounts, we have failed to make a profit in three years.

So we were faced with a dilemma, as most of customers ordered only enough to get free delivery which meant we were sending a lot of smaller quantity orders that was increasing our delivery costs and greatly increasing our carbon footprint (something a business based around ethical business practices like us was never comfortable with and something a business that lost money, could ill afford), so overall our smaller customers were happy,  but not our owners, our environmental audit team and our larger customers, so change was needed and inevitable, but the big question was how to keep everyone happy and still remain in business.

So what did we do?

We did away with free delivery on all orders and raised it to a minimum of £200 which had the added benefits.
It's reduced transportation Co2 , it reduced costs per order by an average of 8% which we could use for discounts which increased our orders and transaction values, , so no one lost out and everyone benefited.

Result -  This has allowed us to reduce our Co2 output by 25% , save 8% on delivery charges per order which allowed us to offer a discount and increase transactions which was great for our bottom line.
Everyone wins.

 

So why was it such an office flash point ?

It's hard to convince people in a loss making business to have the faith that giving discounts would make more money , there was times when I wondered if I made the right decision as we needed to turn a profit and our cost cutting had been so effective that companies reps would ring us and say "I can't find you" and we would have to say "it's at the back of a load of miners cottages" as no one expected a business our size to be run from the back of a residential address , but it did save us £26000 per year.  

Result -  We made our first ever profit and it was done without compromising our strong ethical and environmental beliefs , it even turned out to lower our environmental impact as a business.
Everyone wins.

So what about the future?

A business that makes money can continue to remain in business and can continue with its mission to make a difference and we are now making money not a lot but enough to plan the next part of our journey and it's an exciting one.

We don't want to just sell compostable products we want to improve them and make them in the UK and we are pretty close to inventing a new material that will come from British farm stocks, be compostable ( so good for the planet ) , greatly reduce our admittedly small Co2 footprint ( small and about to get tiny).
We even have plans to make a difference on a local, national and international level , we have big plans but as mentioned we did need to operate on tight margins and keep spend to an absolute minimum, one of our Directors has never received a wage so we can save his wages and reinvest them back in the business.

We have some huge plans and if they all work , we planning on helping the world to go #goplasticfree 

So what are the discounts again?