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Choose Your OWN Price - Avancer 12 Cup Drip Coffee Maker [SOLD OUT]

500

Hi Guys,

We have a special kind of deal available exclusively for Ozbargainers until Midnight Wednesday or as long as stocks last.

Its usually pretty difficult to really know if you are getting value with a special offer because the information you have as a consumer differs to what the retailer knows. So we've decided to run a one of a kind type of promotion. Instead of setting an arbitrary markup on our products we are going to let YOU choose the price. If you feel it is fair you can choose to pay NOTHING for this item and we WILL accept it!

Delivery charges will apply to all orders and take into account shipping and handling. The cost of delivery will be $11.20 to Victoria as an example.

To guide you to make your decision we will provide information regarding the actual cost to get these products from the factory to us and the expenses we incur when you buy something from us.

  • Product: 12 Cup Drip Coffee Maker
  • Retail Price: $27.99
  • Available Qty: 50 (limit 1 per customer)

  • Product Cost: $8.67 —> This is how much it costs us to get the item from the factory to our warehouse.

  • Sale Expenses: $1.39 —> This includes the merchant fees we pay to process a transaction and also includes an admin levy of 8% for our general operating expenses (staff, support, rent, etc)
  • Breakeven Price: $10.06

The reason Avancer started was to use a more efficient distribution model to cut the price of goods whilst still keeping a focus on quality. We believe that the industry is always changing and new pricing models such as this are the way of the future.

We would like to expand this promotion to all our products, however to do this we need your support. The simple truth is that we cannot sustain selling products at below cost. If you would like to see this promotion continue please take this into account when choosing your price.

Any questions, let us know!

Cheers,
Avancer Team

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closed Comments

  • add shipping, whatever that may be to your own area.

  • $18 for delivery.

  • +1 vote

    Delivery charges depend on your postcode, rural areas will obviously cost more than metro…most places should be around $15

  • Like the idea and approach, however the delivery may be significant factor for number of small(er) products, including this one.
    If this was product I'd need I would definitely pay over the breakeven price, given the honest explanation above.

  • Can you say what exactly would be offered next
    - model
    - quantity
    - when it would be offered (or how you would assess when it would be offered)

    based on an average of breakeven + shipping/costs for the current item?

    Would that next item also be a name your price, if you get sufficient sales at breakeven + shipping?


    My apologies if that sounded a bit abrupt, it's just we've had a different business that had a similar idea but because of how it went I'd like to sort out the above information now, for the readers.

    • +11 votes

      I am happy to put any item in our range on this kind of promo…the exact quantity would depend on what we have available but assume around 50 units.

      If the average price we get for the 50 items is $0 though, I wouldn't count on this happening again

  • Can you tell us if the postage price charged is the actual cost incurred to you, or if there's a mark up on that too?

    • $15 is about right for something this size through Aus Post. They might get a slight volume discount, but that's probably offset by the work involved in picking, packing and dispatch.

    • +2 votes

      Our website has a built-in Australia Post calculator so the cost displayed is the actual cost you would get if you typed it into their website. The price also takes into account warehouse fees ($3.50 per item) which is what we pay for dispatch and storage.

  • The problem I see/have with these deals is the postage. You say it costs you ~10, and RRP is ~28. So I say okay I'll pay ~20, now with shipping to my location is bumps it to ~31.

    So I'm paying $3 more than if I just walked into a store and brought, I assume, common product.

    For me it would need to be a few dollars in total price, before I'd even be tempted for such a common/random object. Which would mean I'd have to pay you ~15 and less for the unit.

    Great deal for those that can live with, supposedly, ripping you off. Best of luck, with the business model.

  • +15 votes

    I don't need one, but it would be cool to see an offer on a decent coffee grinder.

  • even if i pay their break even cost, it would cost me 18.30 on shipping and 10.06 for the item

    that gives me a grand "savings" of negative 37 cents…

  • If you're interested in some feedback, it's a nuisance when online shops force you to create an account to calculate shipping. At least you had the guest option, but it was still nearly as much typing as creating an account, just to find out the shipping cost ($11.20 Melbourne suburbs).

    I hope you do this again in the future as I'm I'm ready to leave store bought espresso coffee yet, despite drip being significantly cheaper.

    • +1 vote

      Thanks for the feedback, I happen to agree 100% about creating an account…I'll see what I can do to further simplify the checkout process but all you need to do to calculate shipping is add the item to the cart and put in your postcode and it should be sufficient

      • -6 votes

        hhhhmmmm, we are lazy. it takes effort to enter details and create account to find out that -sigh, postage is too much.

        if you provided postage to the big cities and rural centres -eg melbourne $X, Bendigo $X, etc in a list then it would speed up decision making for buyers.

        otherwise too much work.

        • Only issue with this is that postage is calculated by postcode and depends on the exact combo of items you have in the checkout so it would be a long list!

          One possibility we have moving forward is to just include postage in the unit price and offer free delivery

        • @altomic Can you name even one website that does that??? I don't think so…

    • It's already pretty simple as the rep pointed out and you don't need to create an account to get a shipping quote…

      Rep: I reckon you've already got a pretty good system in place, no need to change. Have you considered using couriers? My company does a fair bit of shipping and we've found it's cheaper to use couriers than Austpost when delivering around the country.

      • Yeh we are looking into couriers, issue with most couriers is that they charge a pretty high minimum cost which makes them more expensive than Auspost in most cases

  • +6 votes

    I think the concept is a good one- but you are marketing the wrong thing!!

    If I want a 12 cheapie drip coffee maker its not going to be something that I order by post for starters.

    The cost of postage is just too high a % of the value of the item. In this case more than 100%

    now if it was something like movie tickets bought in bulk for example so you could negotiate a corporate rate… and you onsold them.

    that I would by.. and I would pay what you paid + postage + a % to reflect how much its saving me

    Or something small with cheap postage, maybe?

    • +2 votes

      Any products in our range that you would like to see on this promo?

      • i agree with wildesy below
        set the break even as the minimum price
        list items that people actually want and are to a value where the postage is probably more than the item itself. i.e. $50 or higher

        i love buying stuff at cost price. happy to pay that :)

  • It's an interesting idea, and I think the majority of people will appreciate the upfront honesty and reciprocate the gesture, but I'd be surprised if it wasn't exploited.

    I think it'd be more likely to be a worthwhile (/sustainable) idea if you guys set the minimum price as your break even, combined it with the absolute lowest shipping price possible and then saw how people responded. That would ensure at the very least you were still breaking even so you could then offer any item on your site knowing you at least weren't going to lose money. I think you'd see most people would be willing to contribute an amount of top of that break even as well to show their appreciation/secure the future of the deal.

    I mean, personally if I know an item goes for say $100, it costs ~$40 for you to break even, I'd have no problem paying $10-20 on top because I know I'm still getting the item a lot cheaper than I would've be able to without such a bargain in place (although a lot does depend on how truthful/accurate the RRP is).

    I agree with everything Rumbaar said as well though, the shipping price certainly adds a complication to something like this. Have you guys thoughts about offering an option to pick up the product or is that not possible?

    • +2 votes

      Thanks for your comments…I did consider putting the minimum as the breakeven but for this first promo I decided to see exactly how people would react and what our average price will be. Once the promo is over we'll go through the data and see if we can do it again or if we need to make changes.

      I've also had a chat to our warehouse and pick up may be an option for Melbourne customers…Seeing if I can put that in now…stay tuned

  •  

    You can get something like this from BIGW for $25 and you don't need to wait.

    • Actually, I walked past one in Coles yesterday for $17ish…as you say, no waiting! ;)

      [edit] However, in fairness that was an 8 cup unit!

  • Interesting marketing strategy…transparency + the honesty system. To be honest, I kinda like it, I hope it works out for you guys; and possibly OzB'ers too! :)

  • From merchants perspective, I agree with above comments that min. price should cover postage, ie real cost. Also agree that when postage is such a high % of costs its difficult to be competitive. Otherwise, can't blame a punter with little dough taking advantage imho.

  • What about offering some of the kitchen accessories that already have free shipping? I think they would get a better reception if you weren't paying so much of the cost for shipping.

  • this coffee machine only costs them $8.67! all these years retailers have been ripping people off! no wonder online sales have gone through the roof
    @avancersales, i agree, just list your minimum cost + small profit, when it comes to buying online we all factor in postage/handling costs in the total amount just like on ebay, i think most of these will go for under your cost, and postage for me is $14.80, have you guys considered eparcel? has tracking and is cheaper

    • this coffee machine only costs them $8.67! all these years retailers have been ripping people off!

      The AUD was close to 50c US not that long ago…

      • Yep true, but production costs, COL & prices overall have risen in China (where these kinda things are usually made) too, so it kinda balances out! Morpheu's right…somewhere in the supply chain somebody's been drinking more than their fair share of the coffee in the past! :p

        That's why Gerry Harvey's been having his little dummy spit…the rest of the 'global villagers' are onto his scam! ;)

        • +1 vote

          It's all because of the outdated distribution model used by big brands. The product basically has to pass through so many different intermediaries that when each person takes their cut the final price is significantly higher than it should be.

          Our distribution model is much simpler than this: Factory —> Us —> You
          We're actually working on simplifying this even further, you might hear more about it in the next few months!

        • How about Factory —> You ???

        • That's what we're aiming to do, there are inherent complexities in that though which need to be ironed out before it can happen.

        • Not really feasible jv, purchasing the volume necessary to buy direct from a manufacturer (often tens of thousands) is simply not realistic for an end user! ;)

          FWIW, I almost bought 10k units of an item recently that I only wanted a couple of…was gonna invest in the rest & resell them on ebay as a home business coz the saving was SIGNIFICANT; like $200 retail item @ USD$12; but I piked out in the end! ;)

        • StewBalls, since you "piked" out, would you share for interest what item it was? It has me intrigued. Maybe I'll get a whole bunch and give you a few at cost ;-)

        • Actually, since I posted this a mate who's a fellow OzB lurker has offered to go me halves in the capital (which was the big risk for me @ ~$16k AUD in total at the time), so I might just keep my pie-hole shut on any further details, don't wanna jinx it…sorry Tim!

          I'll drop a small hint though, it is a children's product…great market that one, self-perputuating supply of customers & parents are far less stingy when it comes to the little monsters than themselves! :o

  • So theoretically it'll cost $15.40 for delivery and then I choose to pay $0 because I'm a bastard and I can then receive a coffee maker for $15.40 delivered?

    • +1 vote

      Correct

    • The problem is these can be bought in Kmart / BigW for about $20. $17 is mentioned above. Means with $15.40 for delivery, I would be prepared to pay no more than $4.60. Sadly that's only about half your break even rate.

  • im not in the market for a new coffee machine but really admire your approach.

    I hope the people who take you up on your offer dont take the piss and this works out for you and we see other great offers.

  • So if everyone's a bastard you lose $503 :(

    Just out of curiosity, when you say the cost from factory to you is $8.67, is this the cost per single item from factory to you? Or is it the cost that each item works out to be when bought in bulk? (I'm assuming it's the latter, but just wanted to confirm)

    • Pretty much. So far the average paid is $2.50 so the next deal will be structured a bit different with the minimum cost = breakeven price.
      $8.67 is the cost of each item when bought in bulk. Buying them individually from the factory works out to be much higher because they charge sample fees plus international air shipping is expensive.

      • Has anyone bought it for $0 + shipping? Just curious as to how honest/fair people are :)

        • +2 votes

          10 / 20 people have paid $0 or $0.01
          4 / 20 people have paid $1
          2 / 20 people have paid $5
          4 / 20 people have paid over the breakeven price

        • Just curious as to how honest/fair people are :)

          75% so far are clearly not…..
          It's unfortunate, but not unexpected….

      • I am a little shocked at those figures (only 4/20 paid more than the breakeven price). It's a good thing you didn't start off with a more expensive item. Good luck in the future deals.

    • It's funny how honesty from a company tends to change the way we think about them. Here I'd be seen as a bastard if I only paid $0.01 and made the company take a loss - but at the $20 discount at Winemakerschoice (http://www.ozbargain.com.au/node/37845) it was acceptable to force the company into a loss (even though they didn't let it go through).

      I'm not judging, I just think it actually shows that Avancersales is actually onto something by putting honesty as a high priority in a business.

      (I believe the psychology in this is that people are less likely to rip off someone they know, but more likely to rip off a 'big business' that is much more impersonal)

      • I believe the psychology in this is that people are less likely to rip off someone they know

        I believe, and the numbers show….that you are mistaken…

        • Not necessarily. Note "less likely". If this had been a Big W promo, you might have seen 100% of people choose $0. Without a 'big business' running the same promo to compare to, you can't say either way from just this one set of figures.

        • 34 / 42 people paid less than $1
          6 / 42 people paid more than the breakeven price (an average of $12.16)

          obviously small numbers…..but interesting nonetheless

  • @jv, yeah i forgot about the stronger ozzie dollar! either one of 2 things is going on;the stronger dollar has bought down the cost price of imported goods, or the cost price has come down but the retailers have pocketed most of the difference! which one do YOU think is more likely? hint;banks do this all the time, i.e reserve bank lowers interest rate, lending banks don't, they go up, lending banks go up quick smart!

  • looking forward to the coffee grinder, hope its a good one at good price!

    • do you have an example of what you are looking for and how much you would want to pay for it?

      • You didn't ask me, but a conical burr grinder is a must. You could probably import cheap blade grinders and flog them to unsuspecting consumers as plenty of brands do, but a conical burr grinder will grind better, with more uniform particle sizes. You need a high range of adjustability in the grinder to cater for plunger, drip filter and espresso machine. I'd be interested to see what you can actually get a small burr grinder in for.

  • How do you go about factoring GST into the cost of the purchases?

    • we pay GST on importing these items and on selling them.
      The sale price includes GST and in this case the GST paid by us is about the same as the GST collected

      • Strictly speaking, you will receive a refund for GST paid on the import.

        Then you remit to the government the GST that you collect from the customer.

        If someone pays $0, then you will be in a net refund position from a GST perspective.

        There will also be the associated tax deduction for making a loss on these sales, hence any loss can be discounted by about 30% in real world terms.

  • I like the idea… I don't like the shipping.

    $15.40 seems expensive? Are you making money on the shipping and handling - how much does the shipping portion actually cost you? Seeing as we are being transparent and all.

    Ie if I buy one, and then send it back to you, if it's not $15.40 to send it back, i'd be pissed off.

    • see my comments further above for the breakdown of how it works.
      Also remember that our shipping rate includes Handling - We have to account for someones time to pick/pack/label the item and send it out to you. When you go to the post office you don't pay this (unless you are paying yourself for time spent waiting in line)

      • See, I would have expected to see that under the:

        "Sale Expenses: $1.39 —> This includes the merchant fees we pay to
        process a transaction and also includes an admin levy of 8% for our
        general operating expenses (staff, support, rent, etc)"

        But that's just me - how much are your 'handling' charges?

  • $3.50 for storage and pick/pack

  • Are these available for pickup straight away or how soon they can be picked up if not in stock ?

  • Thanks for that and can you please provide the pickup address..

    • It's in Campbellfield. Once you place your order we will process it and send you an invoice and further instructions including the address.

  • Aldi have had similar for sale for $8 in the stores (so no shipping) in the past.

    Its cheaper to buy the whole machine than buy the jug separately.

    However good to see a company trying a different sales tactic, despite it failing (too many greedy people).

  • Sorry to be cynical, but I think your postage costs may be sufficient to cover postage + costs. Kind of reminds me the concept of $0 economic profit = opportunity cost = plenty of accounting profit. (In the long run everyone operates at $0 economic profit, i.e. you get paid your fair compensation, no more, no less.)

  • I'm actually surprised 4 people paid more than the break-even price… Technically, the title of this deal should be "$0 for coffee maker plus postage, pay more if you want to". It's OzBargain, not OzCharity.

    I don't see anybody offering to pay extra when they purchase other bargains.

  • How many are available? At the moment it says 22… I see the OP says 50, but there are 1802 clicks through to the site… ?

  • so what is the price break up and quantities till now..

    • 42 units sold so far at an average cost of $2.11

      34 / 42 people paid less than $1
      2 / 42 people paid between $1 and $10
      6 / 42 people paid more than the breakeven price (an average of $12.16)

      Interestingly out of the 8 people who opted to pickup, none paid more than $1 with an average of $0.26

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