Difference between us and Discounters or LowCost - Costumers ask, we answer
COSTUMERS ASK, WE ANSWER
QUESTION: How do you explain that, being the official representatives of Luposan / Markus-Mühle and Luponatural, you sell certain products a bit more expensively than some international companies and Onlineshops-Discounter-LowCost sites?
First, I'd like to clarify the word "DISCOUNTER" - Discount:
This word is very popular and is used to identify "discount establishments." This word refers to businesses, supermarkets, stores, online-shops or commercial organizations specialized in selling all kinds of products at very low prices. Discount stores are characterized by trimming or saving all possible expenditures on staff, facilities, services, packaging, transportation, decoration, etc. in order to reduce costs and, thus, to achieve lower and more competitive market prices. In the case of physical Discounter-LowCost stores, the furnishings, decor and staff are minimal, and combine refrigerated displays with industrial shelves. In Onlineshop-Discounters, shipments are made in plastic bags or simple cardboard boxes and using economical shippers. Very large online retail business with Onlineshops have very small staffs, do not offer sales or advice by phone, require card payment only, etc. In general, it is impossible to contact leaders or owners of these large Discounters; sometimes their identity is unknown, and it is all very impersonal.
Back to your question: "How do you explain that, being the official representative, you sell certain products more expensively than some Onlineshops-Discounters...etc.”
I, Conrado Grandville, executive director of Luposan and Markus-Mühle and Luponatural in Spain, will answer this question as honestly as possible, explaining the reality behind these differences. I have tried to be brief, but to give a detailed and thorough response on the subject, I've had to write much more than I expected.
Logically, you, like me, are looking for the lowest price for a certain product or brand.
Our desire is generally to save in whatever way we can. This is legitimate and normal. Today, the internet offers us the possibility to find comparative prices or buy the same product in the Netherlands, Luxembourg, Germany, China, etc., for example, much more economically than in our country of residence. The internet has no borders. We can even buy a product in a country that has a lower VAT surcharge than our country of origin and take advantage of these savings. For example, a product sent from Germany has 7% VAT, while Portugal has a 23% VAT charge; this makes a huge difference in the final price of a product. The European Union is now considering how to regulate this situation, which gives rise to unfair and unregulated competition.
I experienced an example of this when I was looking online for a hard disk and the first thing I did was go to the website of the manufacturer thinking it would be cheaper, with the surprise that in an international online shop, the same hard disk cost €15 less! I could not understand the reason for this difference from the manufacturer. Naturally, I thought what everyone immediately thinks: "The manufacturer is deceiving people and whatever happens, happens, making a profit at the expense of fools..." But the reality is that often the discounters or normal shops make offers or give price breaks for many reasons: Their warehouses are full and the products are not leaving; the products are about to expire; they launch a product at low cost for use as a "hook" or publicity; to compete and win new clients and/or sell other products at the same time, or they lower the price of one product and increase another to offset the discount, etc. Logically, for the €15 difference, I preferred to buy it directly from the manufacturer for the warranty and peace of mind it offers me, especially in the event of breakage, defect, expiration, future claims, etc.
Often in my life, I have experienced what seems cheap becoming expensive... not to mention the many times I bought clothes online that were too small or large, or a product that was not the same as it was in the photo, etc. Then I had to request a return or exchange, repackage it, and take it to the post office, wasting time... now, my tendency is to buy something that I can see, touch, and taste even though it costs me a couple of euros more, so I end up winning!
A few years ago we did a market study and audit to see what strategies we should apply in Luposan-Spain to be able to offer even lower prices than the most powerful Discounter or LowCost internet site.
The response to this study was that we would have to make enormous changes in our company; that is, completely change our philosophy. In other words... "we should stop being who we are, and change the way we think and act." The result of the study by economists was that it would be possible to lower prices but by cutting and reducing all our services, such as personalized customer advice and, above all, radically changing all the protection, care and handling of our products, taking into account that we live in an area of high heat and humidity.
The simulation of this commercial study advised us to take the following steps and make the decisions to 'break' the market with our prices and make the most powerful discounter tremble!
1 - If we bring all the products produced by the company Markus-Mühle from Germany in a canvas-topped truck, even if it is 42°C and the truck makes its mandatory stops of 6 or 8 hours under the sun on the motorway, submitting the food to "shipping fever," without concern for loss of quality or denaturing and possible rancidity of food, etc. we would be able to save approx. €2500 per month.
We always carry all merchandise from the factory in Germany to our central warehouse of Spain only in trucks, refrigerated at a constant 18°C - 24°C.
2 - If we send the food and supplements in simple cardboard boxes, we would save approx. 2300 euros per month.
We ship all of our products in special protective white boxes, recyclable and approved for food use.
3 - If we sent all products with less expensive courier services that do not deliver in 24 hours, with a service that leaves something to be desired, with limited and impersonal claim policies, we would save €4000-5000 per month!
We entrust all our shipments only to courier services and carriers such as MRW, UPS... which are distinguished by their efficiency, quality, service and delivery within approx. 24 hours instead of "wandering" the food around in the vans for 4-5 days. If you order today before 5:30 p.m., it is likely that you receive your order the next day anywhere in Spain! In the event of incidents, these companies act quickly and very seriously.
4 - If we lay off half of the staff dedicated to giving personal attention to the customer (Call-Center) and they could only buy the food via the internet, without advice or personal help, we would save about €12,000 per month.
We attach great importance to human contact, so we don’t save on staff or telephone counselling with the purchase. This is our strength! "We are delighted to deal directly with the customer."
5 - If we give up our service team that immediately solves complaints and incidents, we could save 5,000 Euros per month.
We believe that complaints and incidents are a very sensitive and delicate issue for customers, so we feel obligated to have people who are dedicated exclusively to solving each case immediately and personally.
6 - If we did not offer our team more workshops, we could save €2000.
We want our work team to be well-trained on the topics of the world of the dog. It is essential to have a team that knows our products thoroughly and can offer suitable and specialized advice about our food and accessories.
7 - If we removed all forms of payment and demanded payment by credit card in order not to complicate our lives, we could reduce administrative staff hours.
For the customers’ convenience and service, we accept various forms of payment: cash on delivery, card, bank transfer, direct debit, etc.
8 - If we had all merchandise and logistics in an external warehouse, where orders are repaired without our quality control, without "pampering" and protecting the merchandise, that could save us approx. €18,000 per month.
We have our own temperature-controlled warehouse in Spain, and give great importance to direct contact with our merchandise. We care about controlling the temperature and relative humidity (50% Max. HR); in addition, loading and unloading is done under our supervision and control, as well as the preparation of shipments. We like to have everything under control and protect the quality of the products!
9 - If we do not place air conditioning and dehumidifiers in the rooms where we have Snacks, we could save €2,000.
For us, it is a priority for these sensitive products to maintain their freshness and be kept free of pests, fungi, acidity, etc.; therefore, we keep them at a relative humidity of 45% to 50% max.
10 - If we did not ask the parent company to produce the food 2-3 days before pick-up in Germany, we could hire more economical transportation companies to pick it up whenever it is convenient for them.
We are very pleased to have our German mother company, which produces animal feed such as the Natural-Extra and all the others 2-3 days before the refrigerated truck picks them up to bring them to Spain. We receive the merchandise "just out the oven" and try to send it as well-protected and as quickly as possible to our customers in Spain! We give great importance to and feel responsible for the freshness and shelf life of our products because they are very sensitive.
11 - If we hire students, persons subsidized by the State, non-specialist or poorly paid people, regardless of whether or not they love animals, we could save more money on salaries.
We are looking for specialized people for each Department. All of our employees are people who are concerned with and love nature and animals. They are people who reject animal abuse, abandonment or bloodthirsty spectacles using animals. If they don't have these minimum requirements, they have no place in our company, even if they are the best workers in the world. When you talk on the phone with any one of us, you will be served by someone who can understand you very well, because we are pet lovers before food sellers.
12 - If we sent orders from other European countries where VAT and customs charges are lower, the final price would also be a little cheaper.
We receive all Luposan, Markus-Mühle and Natural-Extra from Germany in refrigerated trucks and then, from our central warehouse in Spain, we ship all domestic orders with fast high-quality carriers. Our food is not suitable for making long trips without adequate protection and even less from other countries, especially during the 6-7 months of heat. Food sent from Holland, Luxembourg, Germany, etc... is not sent directly in the same transport that carries it into Belgium to your home. Passes through many carriers, sleeps in some vans, etc. In fact, we cannot ship our food to the American continent since it does not meet the characteristics to support that journey and offer the guarantee of freshness and real expiration. To be able to send it there, we would have to include chemical preservatives or extrude it; i.e. it would not be "original" Markus-Mühle / Luposan!
13 - If we stop producing measuring cups, catalogues, prospectuses, and food samples, we could also save a few thousand euros.
We send measuring cups for manufacturing for our clients, and have explanatory catalogs printed, along with prospectuses and labels, and we send food samples to our clients can have their pets try before they buy!
With these and other guidelines, and hundreds of small and large details, this concluded the trade study performed in order to "drop" our prices and not have any competitors!
In conclusion: To lower PVP prices, we must reduce, diminish, limit, crop, save, economize on EVERYTHING, but as you can see, that means reducing quality of everything and in everything. Nobody does miracles, and for a company/ online shop to compete with the best price, it has no choice but to cut expenses that give that “added quality" in the protection and health of the product and customer. It is the only way to be able to offer super competitive low prices. Don’t be fooled; nothing is free. Luckily, this was just a SIMULATION!! I, Conrad, cannot think or act that way; it is against my principles and business ethics!! For me, this fleeting life has other values much more important than doing business pure and simple! For me, doing something with transparency and that gives me satisfaction and peace of mind has great value.
An old saying goes, "Cheaper, in the long run, is expensive.” In addition, as often happens, what is cheap ends up having a “high price” that will be paid over time.
If we put into practice the conclusion that this commercial study gave us, we could probably offer the lowest market price of all our products, below those of the most powerful Internet Discounter, but... we would reduce not only the price but EVERYTHING; that is, service, handling, human contact and the quality and freshness of the products. We want our pets to receive food in the best possible conditions, with all its freshness, vitamins, proteins and without the fat becoming rancid. And with the natural aroma of the raw material and the real expiration date. How did it ship the same day it was made in Germany?!!
I Conrad, confess that I could not do this, that my conscience would not be happy even if business and the "Business World" call me stupid or others consider this a false story to help us sell better. What does it serve me to win all the market, have the best prices and sell more than everyone if the way I do that does not give me inner peace? I would say to myself, "Conrad, you are not giving your best in exchange for making more money..." I would feel in my soul as if we were deceiving people, who, in good faith and with trust, buy a product for their beloved pets... I ask myself: Would I need to do this? For what? To win the market, sell like crazy to end up without a private life and with stress leading to future illnesses? True happiness is not dependent on or associated with commercial success.
Life is short; I will not take 50 euro or even millions to the grave! What is worth losing the sense and reality of life, deep happiness and inner peace? In exchange for what? This is worth much more than all the millions in the world, in addition to doing something in the best way, with passion and giving the best of myself, which is what fills the soul with happiness and makes me feel useful!
A personal conclusion that I apply (and desire) in my company:
I do not want to and cannot be a "Cheap" Discounter/LowCost although this position may cause me to lose many customers and profits. Our prices will probably always be higher because of the investment we make in caring for, protecting and pampering the quality of our products and customers. If our prices on some products actually cost a couple of euros more than in any online shop discount, you know why, not because we earn more, but because we have many extra expenses to give the best care to the merchandise, the best service to you and the freshest food your pet!. In reality, if you analyze not what is seen at first sight, but what is behind it, we are the most economical!!
I am sure that you are not going to believe it, but a Discounter, though it has prices lower than ours, has a higher profit margin because of having fewer expenses. We earn less because we invest more, but we feel happiness and inner peace in giving a service commensurate with the quality and care that our products deserve!
I cannot, nor do want to be "Discounter" and to break the market with my prices, selling quality and restricted service, because being a Discounter means an unscrupulous attempt to "conquer and kill" the small and medium dealer. The Discounter mentality does not apply the words of a very humanitarian old saying: "Live and let live.” It is the supreme selfishness and indifference of a human heart, moved to the world of business without scruples of any kind. To me, it is the dehumanization of business.
My inner peace, knowing that I am doing very well and working with my heart, is worth more than all the power and money in the world. I want to offer a service commensurate with the quality of the product I offer. If I can offer a quality 8, I don't want to give a quality 5!! And when I get to my house and lay my head on the pillow, I feel peace and joy by spending a day giving the best of myself that I can and so I sleep in total serenity and inner peace.
I think that we should not be "stingy" in giving the best of ourselves. In addition, what use is it to produce a product with the category and high quality ingredients of ours and then abuse them, subject them to a journey from Germany in non-refrigerated trucks, etc... losing quality and real expiration time?? For what?
Incidentally, I can assure you that the internet Discounter online-shops / low cost sites, in many cases, act as our allies. People look for something inexpensive, but when they have to deal with "other" problems such as complaints, changes, return of merchandise or money, or they need personal advice and they have bad experiences, they turn to us in the end or go to other companies like ours. Many people must go through the "cheap experience" to see the difference that what is cheap has its shortcomings, and, by paying a couple of euros more, they get a full and healthy service with which the Discounter cannot compete, especially when there are problems or they are looking for quick solutions to their complaints.
I conclude with a few words of Jesus in the Gospel of Mark 8:36. When I first read them, they deeply marked my life and my relationship with trade and money: "What good is it for someone to gain the whole world, yet forfeit their soul?"
We are of course not an NGO, and our philosophy includes earning money, but... not at the cost of saving on the quality of the product, or personal service to the customer by doing marketing tricks! It is not our goal and it makes no sense to me!
ADDITIONAL INFORMATION ABOUT ONLINE SALES
THE BIG DIFFERENCE BETWEEN THE DISCOUNTER / LOWCOST AND INDIVIDUALIZED AND PERSONAL SERVICE.
INFORMATION TO “OPEN YOUR EYES”
It is one thing to sell Internet appliances, shoes, necklaces, etc. and something very different to sell natural food for dogs without chemical preservatives or antioxidants and extrusion.
And precisely in the different treatment, packaging, transport, storage and handling of goods is where the difference in price lies.
We do NOT treat an electronic product, a muzzle, a manger, a cage, etc. in the same way as we treat a natural food without preservatives and a short shelf life for our pets.
This is one of the main differences between the Onlineshops-Discounter and a quality service that focuses on the product and the customer, e.g., that invests in handling, preservation and transport, thus maintaining the quality and freshness of our food and supplements until they arrive at our client’s door.
Two different basic forms of work:
Discounter: Has a philosophy focused on financial profit, pure and simple. Each product is one "number" among the thousands in their stocks. The customer is also one more number in the database, who you should convince to buy something.
Us: Has the philosophy of maintaining, caring for, treating and serving a product according to its quality features without compromising frontline profit. The economic benefit is the "consequence of personal and responsive customer service." The customer is our friend who, through "word of mouth" becomes "our partner."
The Discounter sales philosophy:
As I said before, the philosophy of the Discounter is to save and cut back on everything they can in order to "reduce" prices the most. (Save on staff, packaging, handling, transport companies, customer service, storage, packing, etc.), reducing the quality and freshness of the products and the service in general. Therefore, they tend to hire economic carriers that do not ship in 24 hours, and they leave the food "wandering" 3-5 days in their vans under the scorching sun at 70 - 80 ° C inside the vehicle; they hire students, volunteers, interns, etc... They cannot invest in extraordinary care or added values for the handling of products or personalized service because these additional "extras" entail a surcharge on the PVP.
Less expensive but allowing more profit.
I am sure that you are not going to believe it, but a Discounter, though it has prices lower than ours, has a higher profit margin because of having fewer expenses. We earn less because we invest more but we feel happiness and inner peace giving a service commensurate with the quality and care that our products deserve!
The added value of quality and human contact marks the difference in freshness.
As I always say to the Discounter, the benefit is what counts, more than the quality of the packaging, appearance, high category protective packaging, care for the product, fast shipping, or giving individual and personal service to the public.
For us, value added, is to "go beyond normal" in order to protect the freshness and integrity of a product like ours. This gives us satisfaction, although we earn less and don’t conquer the mass market! We put passion, enthusiasm and joy into our work, and all this leads us to invest more in protection, care and maintenance of the quality of our products until they reach the mouths of our dogs!
The "love" of a brand or product
Another important difference is whether or not we are "married" to a product or brand. The Discounter does not "love" a brand in particular, because they sell hundreds of brands; merchandise is a means of profit that passes through their stores. This has an impact when it comes to receiving advice on a particular problem or product because it is impossible to know and be specialized in more than 1000 different products.
The Internet war of competition. “The bait and switch trap”
The trade war is increasingly ruthless and cold-blooded. Every day, new online shops sprout like mushrooms. To sell and compete, many fall into cheap “wheeling and dealing.” I have seen Internet online shops selling below the price for which they bought a product with the desire to compete and win the "Internet war" against the big businesses.
They are forced to make abusive cuts and lose all ethical scruples in order to be "winners." On the other hand, the big Discounters take advantage of the market of those who have previously planted a brand, saving on advertising. Many look for foods, cans and Asian accessories to offer "bait" prices.
We don't want to enter this game of "cheap flea market wheeling and dealing.” I personally hate the bait and switch tactic. Those who want speed, quality, service, fresh and well maintained products, and fast solutions in incidents or claims, exchange or return of goods, etc., should seek companies or firms without the Discounter mentality, but this entails an extra cost ... "because everything has its price..."
We do not deny that the online pet shops, national or international, have positive aspects. For example, they sell a wide range of accessories that are not perishable or sensitive and do not require demanding treatment and handling for the heat or humidity, such as dog kennels, carriers, cosmetics, toys, collars and a host of products and extruded feed and have a very long shelf-life. Another very different situation is to send food and supplements like ours without preservatives, not extruded and with a short shelf life. I personally would not buy any edible product abroad without preservatives and short shelf life; my health comes first.
Some shops or online Marketing strategies
Price per Kg, not including shipping: Many Discounters show the price per Kg of feed, and at first sight it very economical, but it does not include shipping costs. When the customer buys a 5 Kg bag of food, he or she sees a price per Kg. We see the total price without calculating that shipping costs will be added. With the LowCost Onlineshop, we must calculate the final price of a product including shipping, VAT and other possible extra costs for the result of that sum will be the true final price of the product. This strategy traps many people and then they realize in the end that the price was not as economical as it seemed. This happens not only with Online shops for pets, but with many other products. We put on the final price without having to add "surprises" when it is time to pay.
Credit card commission: Another tactic is not to warn customers that paying with a card has a commission... and so we take the bait, and then, for a couple of euros more we don’t want to turn back and we make the purchase! We notify the customer that if they pay cash on delivery they pay a small commission payment to the carrier.
€99.99: Another tactic I hate personally is the 0.99 on almost all commercial products! Isn’t €49.99 the same thing as €50?? Why do we allow ourselves to be manipulated? I personally feel that retailers are “pulling my leg” or are deceiving me with these tactics. We don't want to fall into that situation.
Offer bonuses, discounts or welcome gifts: These discounts are compensated by higher charges on other products. They are "hooks" with very tempting bait to attract the “fish.” But they are not free; we pay for them in other ways!
First raise the price and then lower it "as a discount."
A widely used tactic is to first raise the price to an amount higher than normal and then cross it out and say “was €79.80; NOW € 59.99!” The “ups and downs” of prices always hide some sales tactics.We avoid this tactic by always having fixed prices.
Payment by card only: This method is to first ensure that the money for the purchase is received, almost always using "card payment only." There is no other choice; once you have paid, you cannot go back. We offer cash on delivery, transfer, direct debit, cash payments).
Using emotional aspects: For example, photos with children, of course all happy and smiling. In the case of pet business, they present themselves as lovers and protectors of pets, although in reality, what is at stake behind these presentations is the love of money. It may even happen that donations are organized for protectors of animals, but the purpose is commercial and this can be noticed when they give a great deal of publicity or "Hype" to these beneficial actions. "But when you give, do not let your left hand know what your right hand is doing..." said Jesus. We are taking great care in this aspect not to fall into manipulation; those who want to buy our products to do so because they are certain.
Focus on the customer instead of the dog: They focus the marketing on the needs of the "human" customer, as if the human to eat the food!. We, although we think of the human customer, focus on the dog and its health, so we advise and accompany the customer in their needs and concerns.
They do not send catalogs or measuring beakers and samples of our products. They do not publish catalogues with our food because they sell hundreds of different brands.
They usually have stores in other strategic countries and from there make shipments to Europe, subjecting the products to heat and a possible denaturing of its natural ingredients, especially in summer time. We have offices and central warehouse in Spain. The food comes from Germany in a refrigerated truck in 48-60 hours, and it is distributed from our national warehouse directly to all customers in Spain.
They are not always available for personal contact on long weekends and holidays. We, for example, work on many holiday weekends, such as December 7, and all this with a purpose: Give the customer personal service by telephone.
One of my experiences with LowCost sites:
Something similar happened to me with an online air-Discounter. They put on the internet: Madrid - Berlin €70. When I started to buy the ticket, some additional surprises began to appear: having a priority seat, priority on the plane, reservations, whether I take a suitcase or two, if I do not have more than 15 kg, etc., and in the end, the price was €70! The Website froze, and when I went back, it cost 30 euro more! What a trick! Of course there are people to buy everything. Unfortunately many fall into these traps; as they say: You'll always find someone who will buy the Brooklyn Bridge from you!!
I hope to have been thorough in my reply to the question you asked us. If you have doubts, questions or comments, please don't just think about it; please contact us. In any case, whatever you decide, we will support and will respect your decision. We are here to serve you and give you all the best we can.
I will conclude this section with a few words of Jesus that I adapt to my company and our way of working and acting in Luposan-Spain:
“… and Jesus replied: “love the Lord your God with all your heart and with all your soul, and with all your strength, and with all your mind; and your neighbor as yourself.” (Gospel of Luke 10:27).
In conclusion, I apply these words to our company and daily work saying:
We put all our heart, all our soul, all our strength and all our mind in everything we are doing in Luposan: Love of giving excellent service, love of neighbor, love of nature, love for animals, love for the Creator of life!
In practical words: We spare no effort to give you the best, even if it lowers our profits.
Let’s give our best! This is living with passion and enthusiasm, and this gives much more health, happiness, and satisfaction than making lots of money at the expense of the pet; at least this is my life and conviction.
Conrado, Executive Director of Luposan, Markus-Mühle, Luponatural and Natural-Extra of Spain, Portugal and Andorra.