Regional Pricing


#1

I’ve had a lot of discussion on here about the pricing of Soylent. I’ve argued that Soylent is too expensive (I’m from Wisconsin) while many have argued that it’s not (and they are mainly from California it seems). I have very little doubt that our difference in opinion comes from regional value of money. I propose that Soylent should switch over to regional pricing so that the Californians can continue to get the pricing they are already happy with, while Soylent can also bring in the more central part of the USA.

To give you an idea of what I’m talking about, here are the values (per $100) in each state (data from April 24, 2014): http://taxfoundation.org/blog/real-value-100-each-state

You have to think a bit backwards. The higher the value is, the cheaper the product should be. As I stated, I live in Wisconsin. The value per $100 is $107.64 (meaning if you spend $100 in Wisconsin, you actually get $107.64 worth of product). California’s worth is $88.57. The difference here is $19.07. This means that if something (such as Soylent) costs a Californian and Wisconsinite the same amount, the Wisconsinite is effectively paying 19.07% more. (That is pretty gigantic if you ask me.)

Right now, if a Californian and Wisconsinite both subscribe to go on Soylent for 112 meals (28 bags) per month, it costs $280/mo. ($340 for a single purchase). That’s $3,360/year ($4,080/year with single purchases each month). When we adjust this to see how much more the Wisconsinite is paying than the Californian, the difference comes to about $53.94 more for the Wisconsinite per mo. with the subscription, which is about $640.75 more per year for the Wisconsinite. That 28 bag purchase for a month’s supply as a single purchase comes to about $64.84 more for the Wisconsinite.

I want to point out that I did not pick the highest and lowest. I picked where I lived compared to where most people seem to be on the forums. If we want to pick the highest and lowest, Washington DC comes in at $84.60 while Mississippi comes in at $115.74. The difference here is 31.14%. This means that someone from Mississippi is paying around $87.19/mo. more than someone from Washington DC for that 28 bag shipment of powdered Soylent, which comes to a total of $1,046.34 per year. Soylent needs regional pricing badly.

EDIT: Any word on if this is possible? @Conor


#2

I’m sure they’ll implement that as soon as all their costs vary by where the product is eventually delivered.


#3

Your tone seems sarcastic (but maybe I’m misreading it). I would like to point out how many companies vary their pricing by region. In fact, if you look at the value map I posted, it is basically the entire central part of the US that is above $100 (remember $100 is the national average) while the East and West coasts are generally below $100. Ignoring this giant region is a big mistake, because there is plenty of money to be made in the Central part of the USA without having to deal with the hassles of going out of the country. Also, taking in more customers would help stabilize the companies, help produce the product in masses, and that will drop prices for everybody while maintaining profit for Rosa Labs (and what usually happens is the price doesn’t go down as much as the company makes savings, so the real profit of selling to the central part of the USA comes from that dropped cost). (Also, Rosa Labs could choose to operate in a cheaper part of the country. That would give great savings.)

While your point that the product doesn’t vary by geography (a point that isn’t even true but we’ll go with it) may sound good, but wasting potential profits is bad for business.


#4

Outside of shipping costs, show me one national website that varies product cost by delivery location. Just one. Any one.


#5

Shipping costs are what I was thinking of when I said your point wasn’t completely accurate. :wink: Now my turn to demand something: Show me that your “delivery location cost differential” objection is relevant. My argument is that lowering prices on regions where products are cheaper will bring in profits for Rosa Labs directly and will indirectly create profit by lowering costs from bringing in more customers, even though they will be making less profit from the customers in the central part of the USA over the customers from the East or West coasts.


#6

USA is a “region” in the world. Be happy you have access to Soylent right now.

There are lots of other regions around the world that want access to Soylent too.


#7

lol… So says the guy in Wisconsin.


#8

This is a really interesting idea.

Have you got examples of companies that do?


#9

Sure. Most food chains do. Go to a national food chain’s website and try to order online. It will ask you for your location before it will allow you to start putting food in the cart.

We can use Pizza Hut as an example: https://order.pizzahut.com/site/menu/pizza. In the one near me, a Meat Lovers carryout is $15.00 starting for a Large Pan pizza. Change to a location in San Diego and the starting price for the same thing is $15.99. It’s extremely common to have regional pricing for food.

[quote=“8O8, post:6, topic:23261, full:true”]
USA is a “region” in the world. Be happy you have access to Soylent right now.

There are lots of other regions around the world that want access to Soylent too.[/quote]
Your point actually only adds to mine. The more Soylent goes worldwide, the more necessary it will be to have regional pricing. Should those in Europe, those in Canada, those in the USA, those in Australia, those in China, Southeast Asia, South America, Africa, Central America, and wherever else Soylent spreads to, all pay the same price? No, they shouldn’t. There needs to be many different prices for the different regions around the world, and the USA alone is made up of many regions. (Remember that the USA is really big. If you cut off Russia, Europe would fit inside of the central part of the USA.)


#10

That’s a local product with local supplies, local labor, etc. Find a national one. Like Apple. Do you see the iPhone being priced differently based on where it is delivered?


#11

Gotcha. I was thinking along similar lines about the price of a pint here in the UK. Northerners coming to London and ordering a beer in a pub frequently wince when the barman asks for the money.

One thing that springs to mind is that pubs in the UK, and fast food chains in America, do presumably have different costs for the wages of the staff preparing/serving the food/drink in different locales, and for rent of the local branch.

Soylent presumably doesn’t have these differing locale costs, at least within the USA.

(I’m not saying that’s the full story, but I think it’s relevant.)


#12

iPhones aren’t food. Also, many national chains don’t use local supplies.


#13

Which chains? Which national chain uses no local supplies, no local labor, and prices their product based on delivery location?


#14

I didn’t state that national chains don’t use local labor. You love to misrepresent what I say. It’s pretty clear that any brick-and-mortar chain is going to use local labor. You are basically asking for the impossible. There are many chains that don’t use local supplies, though. McDonalds is one that would get supplies from out-of-state. Anyways, if you don’t mind I’d rather the company speak for themselves on if regional pricing is possible rather than have you try to speak for them (which you often do), unless you represent the company and then you should say so and I’ll listen.


#15

I think that’s his point…

Look, it’s not a terrible idea honestly. BUT the major costs of making Soylent are fixed right now based on the factories where it’s made and the fixed shipping costs. For regional pricing RL would have to create Soylent “factories” in each region to take advantage of the labor costs in those regions.

That said, I don’t know where Soylent is made… it’s entirely possible it’s already made in the cheapest possible region in which case prices would only go up if they moved to such a model.


#16

I’m just pointing out why you’re the one asking for the impossible. National chains don’t do regional pricing. Why? Because their costs aren’t regional.


#17

Could this be used to make a greater profit? Yes, people in areas were the purchasing power of the dollar is lower would be willing to pay more for Soylent.

On the other hand as people have pointed out this sort of pricing scheme is highly unusual for shipped goods. Its common for local goods to do this because labor, land, ect are all more expensive in areas were the purchasing power is lower. But delivered goods only tend to vary in cost due to shipping costs.

It doesn’t matter if its food or not If I was to purchase non perishable food items online to be delivered to my house(Walmart, amazon, ect) the price wouldn’t change based on the location (Other than shipping cost). I cant think of a single place that uses such a system for delivered goods.

There are potential downsides as well. Because people aren’t used to such a system If it was to be implemented people would probably think Rosa Labs are being greedy by taking advantage of the fact that different people are willing to pay different prices. Such a perception could negatively impact sales.

Whats next? Pricing by income level?


#18

@Syke, if I understand correctly, RL would be trading a little per/unit profit for increased sales is select areas. So RL would be doing a lot of math to figure out what balance is ideal in each region.

This seems like a neat idea that could actually be pretty helpful, but I have a few concerns. People would be having their package(s) shipped to a low-cost region and then driving out a bit to pick it up for cheap, or re-selling it on ebay to the high-cost regions, just like people used to do with bulk orders.


#19

If this was such a profitable idea, don’t you think you’d see at least 1 company doing it???


#20

The price of a product is derived from its sum costs multiplied by whatever markup. Companies don’t go around charging people arbitrarily different amounts because that seems unfair to customers. If it were a good business practice, successful businesses would be doing it.