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rwyss
46
May 7, 2015
I joined Massdrop because you served as a bypass of the middle man (venders/resellers) which gave us all great discounts on a lot of items. Now it seems like instead of having the balls to say, "Sorry guys, (Pax/Audeze/Audioengine) won't work with us so here is what came in 2nd place instead" you are making deals that are transforming the website. The last two implementations are really putting a sour taste in my mouth.
Ever since you paired the Audeze LCD-2 headphones with what ever DAC was with it, i've seen more and more pairing of items. And now you are introducing Drop Credits, which make us pay the full price so that we can gain credits for our next purchase. I can see all the other companies of Massdrop saying, "Well if Audioengine isn't going to give them a deal, why should we?" If this is the case, why should i purchase anything from you? You no longer become a bypass of the middle man and take way longer to deliver the product.
This is a slippery slope to having all paired and full price items that you can earn Drop Credit on. Watch out Massdrop, you're about to piss off your customers.
rwyssThanks for your post! I understand where you’re coming from and you raise valid concerns.
Drop credit is a way to offer products to the community that we otherwise couldn't, it’s not a change to all product offerings. With specific products from some manufacturers, no matter how much we explain the privacy of Massdrop, they maintain consistent MSRP pricing everywhere they list. Until now that meant there was no chance to see products like HD800s, HE-560s, Audeze LCDs, or KEF LS50s listed on Massdrop. Drop credit gives us another option to provide these types of products.
That being said, we 100% understand the downside of drop credit vs discounting and our first priority will always be launching drops with solid direct discounts. Right now for example, other live speaker drops include the Chane A1rx-c speakers (what I use at home), and Yamaha HS7 speakers, neither of these vendors are bound to maintain strict MSRP status on either of these products.
While drop credit won't work for everybody in the community, ultimately, it’s one way we can offer products to the community that otherwise wouldn't be possible. That being said, I’m glad to discuss other ideas for how we could offer those strictly bound products.
Thanks again for your post, thoughtful feedback from the Massdrop community is what directs our product development so the more feedback you provide, the better Massdrop can become.
Anyone in this thread with questions or concerns, feel free to reply to this post. I'll be around all day : )
Iacoizumi
232
May 8, 2015
WillI have to admit, I'm more than a little confused as to how a product that has been offered so many times before has suddenly become something that can only be offered at MSRP. I'm assuming (!) that costs are unchanged on your end of the transaction, but it seems like you've neglected to offer any added benefit to taking our discount in the form of drop credit in lieu of a straight cash discount.
If I'm remembering correctly, these speakers are usually dropped for 299$ + ~20$ S&H. Net cost to the user ends up being ~320$. Massdrop's takeaway is (320 - shipping cost - per unit cost)$.
Under this drop's drop credit schema, upfront cost to the user is 399$, with a maximum possible 80$ drop credit. Net cost still ends up being ~320$ -- however, there are some notable downsides to this method for the buyer. The obvious downside is that the full 399$ are tied up with Massdrop until fully utilized at a later date; however, you also need to consider the lost opportunity cost of the funds themselves. Beyond that, you've probably (inadvertently) decreased the size of your possible buyer pool by increasing the upfront cost. It's worth noting that the increase in base price due to the introduction of drop credit represents roughly a 25% increase in upfront cost for the product itself. Lastly, Massdrop has increased their takeaway under this new schema, as your takeaway is now (400 - shipping cost - per unit cost - drop credits utilized)$; which is at most 80$ more than the takeaway under the old system, and is at least equal to the previous takeaway.
In short, I understand entirely why this drop credit system makes sense from Massdrop's perspective as a business, but I fail to see any benefit with regards to the buyer. You've got all the upside here; personally, I would increase the amount of drop credit awarded to 90-100$ (Massdrop's change in takeaway is adjusted from a 0-80$ possibility to a -10-70$ or -20-60$ possible change). In doing so you provide the buyer with an immediate benefit to utilizing the drop credit system (as they now "save" 10-20$ more than those who participated in previous drops), while insuring that Massdrop's immediate take is larger than earlier. That makes the drop credit system almost akin to a small personal investment in the company -- the buyer coughs up the extra 80$ now with the promise of a 10 or 20$ return on investment at a later date. Either way, as a straight replacement for what was previously cash savings, I don't see why any buyer would prefer the drop credit system at this point in time.
andypak01
430
May 8, 2015
IacoizumiMass drop is basically getting a interest free loan. Not to mention some gains from people not using up the credit. As you pointed out, cost for the item is equal to previous drops so product cost to Massdrop'Massdrop's is likely same as before. Great business move from Massdrop'Massdrop's perspective.
Iacoizumi
232
May 9, 2015
andypak01Yep. I covered it from the buyer's perspective, taking into consideration the lost opportunity cost of the 80$ increment; but totally agreed.
IacoizumiHey lacoizumi,
Thanks for your post! Good to see you on another drop page : )
Here's some clarification on why this drop was offered at a straight discount in the past and via drop credit now. By the way, after reading through this, let me know if you think there's some way we can surface information like this more clearly. It's clear people like yourself take the time to think through these situations and it always kills me to see someone put time into making such a well crafted post when, at no fault of their own, they're missing some critical contextual information.
Following our last drop of the Audioengine A5+, some very large retail partners (think big buildings where you can buy beats by dre) complained. Following that, the vendor was essentially forced to start enforcing consistent pricing across all channels including Massdrop. It's a shame things like this happen, but it's nobody's fault really, it's just the state of the retail landscape (one you're helping to change). Given those unfortunate circumstances, Audioengine A5+s fell into the category of products that we couldn't drop unless we innovated some new way of structuring our listings (thus the Audioengine A5+ launch featuring drop credit). Hopefully all that makes sense.
That said, I think all your points are valid and I've been discussing them with our team since I saw your post last night. Thoughtful feedback like yours is what helps us improve most.
I'll make another, more general, post in a minute but again, thanks for your thoughts and I'll be working to see how much we can incorporate into a future revision of drop credit.
Iacoizumi
232
May 14, 2015
WillSorry about the delay in this response, your reply caught me in the day before the start of my end-of-semester exams, and I wanted to ensure this reply wasn't as rushed as my last.
I had initially guessed that a listed price floor was in play on Audioengine's side; they've been so kind to the community with previous drops, it didn't seem to make much sense that they'd force a return to the full-fledged MSRP without reason. And hey! Give me a little credit -- I mentioned that I was making some assumptions (!). Although in hindsight, perhaps I could have used something a little more eye-catching than a parenthesis-wrapped exclamation point to illustrate that my comment was based on limited information.
As far as drop credit is concerned, it isn't an awful way to overcome the pricing limitation put in place by a fixed price floor; but it is imperative that you offer some form of benefit above and beyond a simple dollar for dollar exchange if you plan on keeping it tied solely for use on Massdrop alone. At the end of the day, money that can only be spent on Massdrop is inherently less valuable than funds available to be spent anywhere. If offering a straight increase in credit is out of the question (ergo, offering 90$ in drop credit where the straight discount would have previously been 80$ in savings), then the next obvious step is to adopt a program similar to Discover's Cashback Bonus Rewards program. On the off-chance that no one in the Massdrop office has a Discover card, Discover's reward program works as follows: for every dollar you spend with the card, you get 0.01 back as a cashback bonus. This cashback bonus can then be utilized at face value (that is to say, in a dollar for dollar exchange) on Amazon, iTunes, Overstock, etc; but can also be exchanged for higher value retailer-specific gift cards (40$ cashback can be redeemed for a 50$ giftcard from Aéropostale, for example). Replace cachback bonus with the concept of drop credit, and you've provided the community with a way to use drop credit in a way that will appeal to most customers. Massdrop previously offered a drop on Lyft credit; I’m curious as to whether they’d be up to offer 20/25$ of Lyft credit in exchange for 20/25$ of drop credit.
As far as communicating such a change to the community here on Massdrop, I think you've hit on Massdrop's major weak point. Massdrop does one thing really well, and that's simplify the group buying process -- but only the buying process. We've all seen the countless interest polls covered in comments such as "We've hit 200 votes, any update Massdrop?", or "Is this ever going to happen?"; even more so when this happens in polls containing products that you've all already stated cannot be dropped (high end GPUs come to mind). Long story short, communication is definitely a weak point. With regards to the introduction of drop credit this weakness is seen in full force. As far as I can tell, there was no mention of the drop credit system on your twitter or facebook pages, or via email. A quick glance over those modes of communication, however, suggests that they are little more than a mode of advertising for the company itself. Your average twitter post attracts a minimal number of favorites and retweets, and your average facebook post attracts few likes and comments; suggesting that both modes of contact encourage minimal user response. From an email perspective, you are the third spammiest shopping outlet I filter emails for; clocking in at ~1.16 emails per day since I started receiving emails from you on 06/20/2013 (beaten only by Newegg at ~2.68 and Amazon at ~1.51 and narrowly edging out Groupon at ~1.11 over the same period). As a result, these methods of communication would most likely be ignored if used to collect feedback on a new pricing methodology such as the drop credit system. Notably, you also have no presence on reddit's Massdrop subcommunity, although from what I can tell you have a fairly positive following on 420magazine.com due to your sponsorship of the site itself despite your relatively infrequent posts on the site's forums. Thankfully, you have a big ol' piece of prime web interface real estate seen by every visitor to the site as soon as they log in right here on the Massdrop site itself -- that scrolling, photogenic, 'Read This Story' photobox. It wouldn't (or at least, shouldn't) be difficult to place a photo in that photobox with the header 'Introducing Drop Credit -- a New Way to Save with Massdrop' and modify the 'Read This Story' button to read 'Find Out More' or 'Tell Us What You Think' and have it redirect to a 'Do you support the idea of Drop Credit' poll with two options: 'yes' or 'no'. Of course, you'd have to find a way to finagle a description of the drop credit system into the current poll layout; or you could take the easy way out and simply place a comment detailing the system onto the poll's discussion page. Whatever you do to communicate such a change in policy in the future, however, it has to happen before you take the system live. In my opinion, the biggest mistake you made in launching the drop credit system was to do so without first collecting customer feedback.
Anyway, I rambled a bit (alright, a lot), but hopefully that feedback is somewhat constructive. As a final note, I would remove your phone number from this thread -- my crawler definitely would have picked it up, and the internet isn't always kind when it comes to safeguarding personal information.
emails_since_06202013 = { 'AbeBooks': 50, 'Amazon': 1046, 'Dell': 67, 'Direct2Drive': 80, 'DollarShaveClub': 9, 'Etsy': 41, 'FedEx': 7, 'Groupon': 774, 'Lulu': 89, 'Massdrop': 804, 'Monoprice': 406, 'MusicDirect': 106, 'NCIX': 12, 'Newegg': 1857, 'Paypal': 266, 'PimpMyKeyboard': 56, 'Sony': 20, 'Steam': 463, 'TigerDirect': 245, 'ToysRUs': 268, 'eBay': 339 }
pprint(sorted([(k,v,float(v)/694) for k,v in emails_since_06202013.items()], key=lambda x:-x[1])) [('Newegg', 1857, 2.675792507204611), ('Amazon', 1046, 1.5072046109510087), ('Massdrop', 804, 1.15850144092219), ('Groupon', 774, 1.1152737752161384), ('Steam', 463, 0.6671469740634006), ('Monoprice', 406, 0.5850144092219021), ('eBay', 339, 0.4884726224783862), ('ToysRUs', 268, 0.3861671469740634), ('Paypal', 266, 0.38328530259365995), ('TigerDirect', 245, 0.3530259365994236), ('MusicDirect', 106, 0.15273775216138327), ('Lulu', 89, 0.1282420749279539), ('Direct2Drive', 80, 0.11527377521613832), ('Dell', 67, 0.09654178674351585), ('PimpMyKeyboard', 56, 0.08069164265129683), ('AbeBooks', 50, 0.07204610951008646), ('Etsy', 41, 0.059077809798270896), ('Sony', 20, 0.02881844380403458), ('NCIX', 12, 0.01729106628242075), ('DollarShaveClub', 9, 0.012968299711815562), ('FedEx', 7, 0.010086455331412104)]
Lateralus
290
May 16, 2015
IacoizumiHoly cow. What an intelligent, well thought out post. 10/10, would read again.
Iacoizumi
232
May 18, 2015
LateralusHaha, thanks for the compliment! Social media efficiency and analysis is my day job, so I'd hope that my input here would be somewhat valid. Haven't heard anything from Will yet, but hopefully they've taken my comments under advisement.
rwyssI just joined Massdrop and this is leaving a bad taste in my mouth as to using them. Thanks for your excellent post!
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