Morning! Thanks for the offers, all three shops have them now.
A quick look back at Day 1: after the last drop, resellers sold our DRIP Runner 2 for €200, and Malik wrote to us because he has saved exactly €119. You wrote offers with a volume discount and found the mistake in my draft. Then we looked at PriceBot, which changes the price with demand, and at the Oasis tickets, where a ticket for £148.50 could suddenly cost £355.20.
Today we check PriceBot with numbers, test it ourselves, and then you write our price rule for the next drop. I'll take your rule to Leyla. Before that, you prepare a short statement about it for your classmates. Let's start with Step 1.
Open your workbook for Sales and go to Day 2. Keep this page open next to it.
Download your workbook for SalesThis file is for your internship in Sales, with one part for Day 1 and one part for Day 2. Download it once and use it on both days. The file lands in your Downloads folder. If you missed Day 1, download the workbook now and go straight to Day 2: the check on this page only looks at your answers for Day 2.
Calculate and check
Sven collected the facts about PriceBot in M6. Use them to find out what PriceBot changes for DRIP and for the resellers. Always write down your calculation. The box “Words for this internship” explains the words you need in Sales.
- drop
- Produktstart: the evening a new model goes on sale, only in small numbers
- reseller
- Wiederverkäufer: someone who buys a product only to sell it again for more money
- offer
- Angebot: a written price for a customer, with amount and delivery date
- volume discount
- Mengenrabatt: a lower price per piece for a bigger order
- price list
- Preisliste: all prices of a company in one table
- demand
- Nachfrage: how many people want to buy a product
- dynamic pricing
- dynamische Preise: the price changes with demand, sometimes every minute
- turnover
- Umsatz: all the money that comes in from sales, before costs
PriceBot at DRIP: the facts
Collected by Sven| Facts | |
|---|---|
| Last drop | 400 pairs at a fixed price of €119, sold out in less than an hour |
| Resellers at the last drop | about 80 pairs, all sent to the same five addresses, probably bought with bots (programs that buy very fast); sold again for about €200 each |
| PriceBot plan for the next drop | the first 100 pairs for €159, the next 200 pairs for €129, the last 100 pairs for €99 |
| PriceBot and resellers | at €159, resellers make almost no money when they sell for €200; at €99, they make more money per pair than at the last drop |
- a) Calculate DRIP's turnover at the last drop with the fixed price.
- b) Calculate DRIP's turnover with the PriceBot plan.
- c) How much more turnover does DRIP make with PriceBot? Give the difference in euros and in percent of the fixed-price turnover. Round to one decimal place.
- d) How much extra money did the resellers make in total at the last drop? First calculate the extra money per pair (their selling price minus DRIP's price), then for all 80 pairs.
a) 400 × €119 = €47,600.
b) 100 × €159 + 200 × €129 + 100 × €99 = €15,900 + €25,800 + €9,900 = €51,600.
c) €51,600 − €47,600 = €4,000; €4,000 ÷ €47,600 = 8.4%.
d) 80 × (€200 − €119) = 80 × €81 = €6,480. With the fixed price, this money went to the resellers and not to DRIP.
Test PriceBot yourself
The plan in M6 has three prices: €159 for the first 100 pairs, €129 for the next 200 and €99 for the last 100. PriceBot only switches to €99 when fewer people buy at €129. In the simulator, you decide how many people buy a pair for €129 or more. Move the slider slowly from left to right and watch two things: the turnover, and how many pairs are left for €99. At 300, the simulator shows the plan from M6, so you can check your result from Step 1 b). Malik has exactly €119.
| People who buy for €129 or more | Pairs for €159 | Pairs for €129 | Pairs for €99 | Turnover |
|---|---|---|---|---|
| 100 | 100 | 0 | 300 | €45,600 |
| 200 | 100 | 100 | 200 | €48,600 |
| 300 | 100 | 200 | 100 | €51,600 |
| 400 | 100 | 300 | 0 | €54,600 |
PriceBot sells the first 100 pairs for €159. Then the price is €129 as long as people still buy at this price. When fewer people buy at €129, the last pairs go for €99. Malik can only buy a pair for €99.
- Malik, an apprentice, wrote to DRIP on Day 1: “Hi DRIP, is it true that the price will change during the next drop? I'm an apprentice, and I've saved for two months to have exactly €119. If the shoe costs more at 8 p.m., I can forget it.”
- Write your answer to Malik in three sentences. Sentence 1: Which pairs can he afford with his €119 under the PriceBot plan? Sentence 2: How many pairs are sold before those? Sentence 3: What happens to Malik when more people want the shoe? Use the simulator.Help: “Hi Malik, with PriceBot you can only buy one of the ... pairs for €... . Before that, ... pairs are sold. If many people want the shoe, ...”
A strong answer: Malik can only buy one of the last 100 pairs for €99, after 300 pairs are sold, so late in the evening, if any are left. When 400 or more people buy for €129 or more, PriceBot never lowers the price, and no pair is left for €99. Resellers want the cheap pairs too, because a pair for €99 brings them €101.
What the simulator shows: PriceBot brings DRIP more turnover when demand is high (up to €54,600). With a fixed price, Malik lost against the bots; with PriceBot, he may lose against the clock and against high demand.
Zoom out: the whole city
Leave DRIP for a moment and look at the whole city. Imagine that most shops in Ohm City use dynamic pricing: sneaker shops, the cinema, the supermarket, even the bus company.
- a) What happens to customers? Complete this sentence in the box: “Most shops change their prices with demand, so customers ..., therefore ...”
- b) Which group of people in Ohm City gains the most from dynamic pricing everywhere, and which group loses the most? Name both groups and explain in two sentences.
- c) Should shops be allowed to change the price while people are already buying? Tick exactly one box.Yes, shops may change prices freely · Yes, but only with a highest price that is shown before people buy · No, the price stays the same while people are buying
- d) Explain your choice in c) in two sentences. Then name one weakness of your choice in a third sentence.Help: Think of the Oasis fans and of Malik. “We choose ..., because ... One weakness is that ...”
a) For example: Most shops change their prices with demand, so customers never know if this is a good moment to buy, therefore they compare and wait more, and they trust prices less. Another strong answer: customers with time and apps save money, and the others pay more.
b) Gain: companies, and customers with money, time and the technology to compare prices. Lose: people with little money or fixed times, for example apprentices or people who work in shifts, who have to buy when prices are high. With the bus, everyone who has to travel at busy times pays more.
c) All three choices are possible. What counts is your reason and an honest weakness. A strong middle way is a highest price that is shown before people buy, because it stops a surprise like the one the Oasis fans had. Its weakness: shops can set the highest price very high.
Your price rule and your statement
Work alone. You write the price rule for Sales, like Sven would, so you say “our rule”. Sven takes your rule to Leyla before the next drop. Before that, you prepare a short statement about it for your classmates. You can use PriceBot as planned, change the plan, or keep one fixed price. Choose the rule you can defend best.
- a) Write DRIP's price rule for the next drop in one or two sentences. Your rule answers three questions: Does DRIP use PriceBot? How many pairs does DRIP sell at which price? What does DRIP do against resellers?Help: “DRIP sells ... pairs for €..., and ... To stop resellers, DRIP ...”
- b) Prepare your statement. Write exactly three sentences, one in each box.
- Sentence 1 starts with: “Our rule is ...” Write your rule from a) again as one sentence and start it with these words.
- Sentence 2 starts with: “The strongest reason for our rule is ...” Use a number from Step 1, a fact from M6 or the Oasis tickets (a ticket for £148.50 could cost £355.20).
- Sentence 3 starts with: “The biggest weakness of our rule is ..., and we deal with it by ...”Help for sentence 3: “The biggest weakness of our rule is that customers like Malik ... / that resellers ..., and we deal with it by ...”
- c) Everyone prepares this part. Ms Borgwardt chooses some of you to read their three sentences out loud. Then two classmates ask two questions: “Who loses because of your rule?” and “How much does your rule cost?” Write your answers here, one or two sentences each.
- Question 1: “Who loses because of your rule?”Help for question 1: Think of Malik. If your rule keeps one fixed price, think of DRIP and of the fans who lose against the resellers' bots.
- Question 2: “How much does your rule cost?”Help for question 2: Calculate DRIP's turnover with your rule, like in Step 1 b), and compare it with the turnover with one fixed price from Step 1 a). “With our rule, DRIP makes €... . That is €... more / less than with one fixed price.” If your rule stops resellers, say what happens to the extra money they made at the last drop (Step 1 d).
Every rule is possible. A strong rule answers all three questions in a). In b), sentence 2 has a number or a fact (€4,000, 8.4%, €6,480, 80 pairs, the Oasis tickets), and sentence 3 names a real weakness and what you do about it.
Strong middle ways: one fixed price plus “one pair per customer” and a check against bots; early access at the fixed price for regular customers, then dynamic prices with a highest price that everyone can see; or PriceBot only lowers prices, as a discount when demand falls.
Question 1 needs a real person: with PriceBot, Malik may get no pair; with one fixed price, fans lose against the bots, and DRIP loses money to the resellers. Question 2: the PriceBot plan brings €4,000 more turnover than the fixed price. Watch out: the last 100 pairs for €99 are even more attractive for resellers (€101 per pair), so strong rules limit the pairs per address.
The statements
Stop here and wait until the statements start. While you wait, read your three sentences from Step 4 b) to yourself and check your answers in Step 4 c). Ms Borgwardt chooses some of you to read their three sentences. She also chooses two classmates who ask: the first one always asks “Who loses because of your rule?”, the second one always asks “How much does your rule cost?” If you read, answer with your notes from Step 4 c). If you ask, ask your question after each statement. Everyone writes notes, also the readers and the askers: after each statement, write down in a few words who loses, in the box for this step. At the end, write two sentences under your notes: What do the people who lose have in common?
- First, while you listen: who loses in each statement? A few words for each one. Then think about all the answers to the first question, “Who loses because of your rule?” Write two sentences under your notes: What do the people who lose have in common?Help: Look at your notes. Do the people who lose decide about the rule? “Most of the people who lose are ... They all ...” If you missed the statements: leave out the notes and write two sentences. Think of Malik, and of the people who lose under your own rule. What do they have in common?
A strong answer finds a pattern, for example: the people who lose are often at the start of their working life, have little money, or have no say in the decision. They carry the risk of the new tool, but they did not choose it.
Check your answer: Did you name what the people have in common, and not only who they are?
What I learned today
Write three sentences, one for each important thing you learned in Sales, in your own words. For example: what PriceBot changes for DRIP's turnover, and what your rule changes for someone like Malik.
Check your workbook
- Save your workbook.
- Choose the file here.
- Does the page name a step? Then an answer is still missing or very short. Fill in that box, save the file and choose it here again.
- When all answers are there, Sven answers you and the solutions appear under every step.
- Compare the solutions with your answers. Is a number or a fact in your answer wrong? Write “Correction:” and the right answer in the same box, under your answer.
- Is the answer your own opinion or your own rule? Then more than one answer can be good. Write “Also:” and one idea from the solution that you did not have.
- Save your workbook again.
Thank you for our price rule. I'm taking it to Leyla before the next drop, and I'll tell her where it came from.
And I'm writing to Malik today. It was great to have you in Sales, thank you!