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Paging William Shatner: Restaurants To Let You Name Your Own Price
from the seen-this-before dept
There have been several attempts at selling things using the "name your own price" model, including many failed experiments at Priceline.com alone. Now a company is hoping to try it again, this time for meals at restaurants (via Marginal Revolution). In its own words, the company is hoping customers go for a combination of a normal booking site and online auctions. It sounds like an amusing novelty, but it's doubtful that it'll really go very far. For one thing, if you have to specify the meal your bidding on, what happens when you get to the restaurant and you're in the mood for something else. And restaurants don't have particularly high margins, so whatever slight discount they'll be prepared to offer probably won't be worth it in light of the mental transaction costs of haggling for dinner. So, like similar schemes in the past, it probably won't accomplish much, save for a little bit of extra publicity for the participating restaurants. And it of course exhumes the corpse of yet another bubble-era business model.
Reader Comments
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Mike, do you know all your posts were much shorter in 1999?
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Re:
Mike, do you know all your posts were much shorter in 1999?
Contributed by Joe
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Final Offer
.50 Big Mac... Final offer
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William Shatner?
I read the article and maybe I missed something, what does this have to do with William Shatner?
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Re: William Shatner?
William Shatner is the spokes person for Priceline.com (and has a stake in it.)
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Name your own price so long as...
Problem with Name your Own Price crap is they have a minimum that has to be met. That minimum is set so they can still make a profit, usually whatever the price of the item is normally. Then when you bet something more than that its pure profit for them. That's why priceline's system failed. You bet on a plane ticket slowly raising the bet price until its accepted then discover its the same price listed on every other plane ticket site.
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plane tickets are different
You can always get a better deal even if you just got a great one. You may have to put up with some crap like plane changes in Dayton Ohio, but the incentive is to book empty seats.
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not bad if gift cards
Name your own price on an actual meal...but on gift cards might work. By selling gcs on discount, the restaurant gets publicity ans add'l name rec it may not otherwise get. plus, they likely wouldnt apply to alcohol - which is where restaurants probably make their most money. also, im sure a small percentage go unused (or get penalized for non-use in most states). it seems like a no-lose. the only problem is, what happens when bidding reaches the actual face value???
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Prices
Uh...Prices at restaurants are VERY MUCH a money maker...thing about how much a head of lettuce costs, and then think about how much you pay for a salad, which contains 1/10th of a head of lettuce. Okay, got that? Now, Think about a T-Bone steak... I pay $7.99 per pound on the high side, when was the last time you seen a T-bone for less than $20.00? Okay, Now think about a huge meal with your favorite entree and all the fixings... Are you hungry yet? :o)
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Re: Prices
The price of a meal in a restaurant has little to do with the price of the ingredients. A restaurant is about the highest-overhead business there is. Many years ago, I managed a restaurant, and the rule of thumb at the time was that if you didn't get at least a 3-4x markup on the cost of the ingredients, you were losing money (for a dine-in establishment). If you had a really high-volume store, such as a popular fast-food restaurant in a really good location, you might be able to survive on just a 100% markup. I suspect that hasn't changed much.
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Violins and Accessories
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Re: Prices
Scott - get a clue.
Fucking idiot.
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Anonymous Coward
can't you ban this fuking idiot? I'm sick to death of his idiotic comments.
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Re: Anonymous Coward
Right after you FUCK off and die you twit
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@ Scott.
Sure - actual prices on items compared to a per-plate cost might seem low. However, that doesn't include restaurant operating overhead like staffing costs, liscence costs, food wastage (the remaining 50% of the head of lettuce put into salads that are not ordered but have to be made to meet a theoretical demand) and other associated operating costs.
Having managed kitchens myself (just the kitchen, not the whole restaurant) I know margins tend to be low - that's why the most money is made at very high scale restaurants and by chains who can absorb the minimal margins and get by on volume or over inflated prices.
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Have lunch and pay what you think is fair on the way out.
Sounds like a good idea for a new chain.
You can call it Eat'm and Beat'm.
(end of joke)
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Since when?
Since when have restaurants had small margins on their food. Perhaps fast food restaurants do, but not regular restaurants.
You really think that $10.95 pasta dish at Olive Garden uses more than 5 cents of pasta and 20 cents of sauce? How about that 1.95 all you can drink soda where each glass is 3-8 cents worth of soda?
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This might work for pizza.
I think this would work for the "$5 pizza" model that's common around here. I'll be driving down the road and there's a kid on the curb waving a big sign for a basic pizza at a cheap price. The idea is that if they move enough of these, they don't get stale, and having your pizza cooked to order is less important.
I'd like to see a reverse-auction model, where the pizza comes out of the oven at ten bucks, and gets cheaper as it sits around. If you have several people waiting for a pizza, whoever's willing to pay the highest price wins, and the others wait for the next pie out of the oven.
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Cheapskates?
I'd like to see a film of a guy trying to haggle down the price of the bill, say when he's paying for it on a a first date. Particularly the woman's reaction.
I'd also like to see the vid where a group of ten people go in, assuming the restaurant "automatically" adds gratuity for groups of eight or more, and have one guy argue down the percentage on his bill.... and then ask if they can put it all on separate checks, and oh by the way, please give us all receipts because we're writing this off as a business expense... and have the other nine people each try and haggle down their separate check before the restaurant staff start asking the cook where the sharp knives are kept.
Which... come to think of it, in all seriousness, might be the point. If a really upscale restaurant has a high percentage of fru-fru couples or business clients, and ESPECIALLY if they have a tight margin, they're going to have to -- covertly or not -- add a little "pad" to the top of their bill. Even if the "pad" isn't enough to always cover margin, it could well be that the restaurant's ratio of cheapskates is far lower than the restaurant's ratio of business people who don't care what the cost is because the company's picking up the tab (and that's just more $$ and more points for the employee on their card of choice), or the ratio of idiot guys looking to impress their dates, or just the ratio of people who are too timid to haggle or who just don't haggle well.
But the vids would still be funny, I think.
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