Telstra has revealed the addition of almost one million new mobile services in the six months to December 2011, but Sensis revenues plummeted 24 percent in 12 months.
DigitalZoo, an Australian online retailer of consumer and business electronic gear, has come up with a novel pricing strategy: customers specify the mark-up they are willing to pay, from as little as one percent, and the prices of all goods on sale adjust to reflect this.
The new scheme has been launched today, 26 March, and the prices in DigitalZoo's online catalogue for casual visitors reflect a margin of seven percent on cost, according to managing director George Lotis.
However, when users register they specify the margin they are willing to pay then when the log in all prices reflect their chosen markup.
Lotis claims he will be able to survive on a one percent mark-up, but says he believes Australians' penchant for a 'fair go' means that this won't happen. "Australians have a good moral compass and will generally do what is fair and equitable. We understand and appreciate that some consumers cannot afford a higher mark-up and may therefore select the minimum mark-up of one percent. We operate an efficient and effective business and we’ll stay in business even with such slim margins," he said.
Lotis told iTWire that there was a successful precedent for his approach. "There is a restaurant in Melbourne called 'Lentil As Anything'. There are no prices on the menu, and people are invited to pay what they think the food is worth. They have been in business for quite some time and have opened several more outlets."
The Lentil as Anything website presently lists four outlets and describes the organisation as "a non profit Incorporated association, celebrating compassion, individuality and artistic expression." It says its philosophy of 'no set price' is "a social experiment that encourages people to have an internal conversation with their conscience and their own ethics."
In Lotis' case if the outcome of this internal conversation leans too often to the minimum mark-up he reserves the right to set a higher minimum.
David Bass
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