I am a huge proponent of consumer generated online marketplaces. As a life long collector of comics, footwear, vintage
memorabilia, and all things dope, online marketplaces are the premier
destination to curate collections. I am referring primarily to what I have
experience with, which includes eBay, Facebook buying/selling groups, and
designated forums. Here, sellers can post their items for sale on the
marketplace to an audience of potentially interested customers. The entire
transaction exists online and after a sale, the seller merely ships the item or
arranges an in person meet up with the purchaser. Often, the seller lists the
item for a set price and may accept reasonable offers.
However, an alternative selling
style in these scenarios is a raffle. Here, the seller will sell a set amount
of raffle spots for a specific ticket price. For example, if I were to normally
sell a product priced at $400 I could alternatively sell 20 raffle spots at $20
each. This not only allows you to collect the full amount that you were looking
to get for your product (preventing customers from making “low-ball” offers),
but also gives the opportunity for a customer to get a high-valued product for
a fraction of its price. This form of selling often comes under fire for being
unfair or rigged in the winner selection process, although the most successful
raffles that I have been associated with utilize a third party selector to
choose the winner and avoid this issue. Raffles also can be seen as a form of
gambling, which it essentially is, although there are always fixed odds. If the
raffle you are partaking in has 15 spots, you know for a fact that you have a
6.6% chance of winning per ticket you purchase.
I find this to be a great style in
selling higher priced and collectible items, but can be translated over
big-ticket items featured at retail stores as well. With raffles, the customer
can get wrapped into the allure of “winning” a product for a fraction of its
cost without ever actually receiving any product. You can conceivably earn
revenue from an entire audience of customers and never actually give them any
products. One might raise the question “if customer’s keep losing, won’t they
become upset with the store and stop purchasing there?”. This is a valid
question, and I would rebuttal it by saying that not every product is meant to
be raffled in a store. I envision a scenario where I can walk into Best Buy and
buy products as I normally would. Then as I walk to the back to look at the
unbelievable 60”+ 4K HDTVs there is a sign that they are holding a raffle for
one of these beauties with 40 spots priced at $25. Here, Best Buy can earn
revenue and gain inexpensive customer information on people who may not even
purchased a product to begin with. This creates a low acquisition cost for
customer information, which can many times be a leading line item for a
company’s assets. In addition, this raffle idea would increase the total price
per transaction for the participating customers and can help employees on the
sales floor meet higher goals. As a consumer, it adds a level of excitement to
shopping, the same thrill you get with gambling and betting, and can result in
customers returning to the store more often than they historically had been
before.
This model is not designed for
selling every product in your store. It is, however, a strong marketing
opportunity for a store that does not require much capital and can generate a
heightened level of brand equity and value to the customer. While this post may
not be about as taboo of a subject matter of the rest, this could be a new
facet of retail selling that exists primarily on the secondary selling market.
Bridging the gap between secondary marketplaces and the primary supply chain is
not only exciting, but a potentially very profitable avenue to explore.
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