Thursday, February 08, 2007

How Much Is That Cup of Coffee Worth?

The Terra Bite cafe and deli in Kirkland, Washington, recently opened with an interesting business plan. No prices! They allow customers to decide how much, if anything, their coffee or sandwich is worth. Kind of an honor or free will donation system.

It's too soon to tell if their business model will work, but I do know that a similar system worked for the Boy Scouts at our church. They used to sell donuts after Mass as a fundraiser. 50 cents a donut was their price. A few years ago one of the leaders decided to remove the price and just leave out a basket for donations and give away the donuts. He told me they took in substantially more with the donation system than they ever did with the fixed price model. Of course, a charity fundraiser is a completely different type of enterprise than a for-profit business.

What do you think? How much is your morning java worth to you, and would you pay, or just snag some free coffee? I wonder if something like this would work on eBay; start all your auctions at a penny?

Hat Tip: Clicked
Daddy Yak Auctions
; ; ;

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