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Tuesday, June 02, 2015 8:48:31 PM
I'll take higher margins over higher sales any day
However I am not convinced taking this route is less expensive and strongly disagree that it is 1/3 of the cost. How do you come up with that? High traffic means premium rent. Then you have staff and all kinds of other bills, insurance etc to keep the lights on.
Cracking that nut every month with just a few niche SKU's would be a tough racket in high rolling Hollywood, Vegas,etc....and quite frankly sounds like a joke.
I could see maybe a kiosk in a mall if all they want is to demo, but this plan being hatched really does sound like a way to fleece sh's when they come up short to pay for it all. Why re-invent the wheel? Costco has the customers!
IF it is true that there are better margins this way, is this limited exposure going to trump that of the immense traffic and the convenience of adding to your cart since you were there anyway of a Costco? Highly doubtful. Customer acquisition costs go down with volume so in this case I suspect Costco is ultimately the lower customer acquisition cost with far less work and $ spent for Nate's.
To set up shop and make it a destination just to buy pancakes is ludicrous no one will make time for that on a regular basis.
Also to say none of the cost matters because 1PM will bear it is extremely short sighted and a wash as I can assure you however they choose to bring to market the cost's involved will come out of every single can sold before there is any talk of 'profits.'
The way this looks now and after dragging their heels for soooo many months, is this is Plan B because the more desirable Plan A is not working out for reasons we may never know.
Bottom line is Nate got greedy and played hard to get and now he's been kicked to the curb IMO Spin doctors here ...there never was a solid plan they roll with the punches..painful to watch.
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