Friday, 30 August 2013

FlexKom – Make Money With Discounts




Who loves receiving discounts when shopping? 

I do!


Shopkeepers are in business to make profits and giving discounts to customers is a strategy that they use to sell their merchandise.  

Shopkeepers know their costs and will never charge a price that will leave their business in jeopardy. So when you get a discount, be glad, because the shopkeeper is still making a profit.

But what really is a discount?

A discount is the amount of money that a shop owner could afford to give off the price of an item and still make a profit. 

The customer gets to keep the value of the discount in his wallet. 

The discount is not money that the shop keeper ever gets. It is money that he is willing to “give up” in profits.


DISCOUNT = MONEY THAT NEVER LEAVES THE CUSTOMERS’ POCKETS

FlexKom, a German company has implemented an innovative way to use discounts to 
  • make the customer even more happy and also
  • make the shopkeeper happier.

Instead of the total discount remaining in the customer’s pocket, and basically going, “Poof!” to the retailer’s profits, FlexKom has come up with a system that allows the customer to get cash back and other rewards and in the process, assists the shop keeper in gaining loyal customers.

How does FlexKom do that?



FlexKom has introduced a discount loyalty card that gives discounts as cash back to customers on their purchases at all FlexKom affiliated stores and rewards customers on their FlexMoney balances.

When a retailer becomes a FlexKom partner, he receives 1000 cards pre-loaded with 2 Euros which he then registers and gives out freely to his loyal customers. The customer is now permanently linked to him.




How does the discount and cash back work? 

Let’s use a simple example with this retailer’s discount.

 Photo Courtesy WareHouse Discount Center
$3,279.98  = The Original Price 
$2,131.89  = The Selling Price        
  

Discount    
= Original Price – Selling Price
= $3,279.98   $2,131.89
= $1,148.07

Percentage Discount       
= Discount /Original Price x 100
= $1,148.07 / $3,279.98 x 100
= 35%

Now that’s a huge, HUGE discount! 

But, rest assured, the retailer is still making some profit, even at the lower price.

Transaction At A FlexKom Non-Affiliated Store
If this transaction is carried out at a FlexKom non-affiliated store, the customer simply pays the $2,131.89 and leaves extremely happy with his bargain product. 

The retailer is grateful that the item has been sold and money is in the “kitty”.

However, at a FlexKom affiliated store the transaction would be very different.

Transaction At A FlexKom Affiliated Store
When a retailer agrees to become part of the FlexKom system, he is agreeing to 
give discounts as cash back to customers on their FlexKom Loyalty Card
give the same value of the customer’s discount to the FlexKom system



Yes, but, how would the money be calculated in the re-distribution of the discount?




Using the example
50% goes back to the customer as cash back on his FlexKom card 
       = 50% x $1,148.07 = $574.03

50% goes to FlexKom to run its system, pay commissions, contribute to charity 
       = $574.03

The customer pays the original full price of the item with his debit card, credit card or cash.

The retailer then goes to the FlexKom terminal and keys in the transaction for the customer to get cash back on his discount loyalty card.

So exactly how much does the retailer get from the $574.03 discounted transaction? 

Remember, half of the money goes to the customer and the other half goes to FlexKom.

Here is the exact breakdown of those funds given in the discount, as stated in the illustration.

40% x $574.03 = $229.61 = FlexKom cars, charity and profit 

60% x $574.03 = $344.42 =FlexKom shares with team members 

Now the $344.42 is shared as follows

40% x $344.42 = $ 137.76
Global signed shops = 20% / 40% x $137.76   = $68.88

Shop Owner              = 20% / 40% x $137.76   = $68.88

51% x $344.42 =$175.65
Differential Bonus    = 30% / 51% x $175.65  = $103.33

Leaders Bonus          = 15% / 51% x $175.65 = $51.66

World Pool                = 6%  / 51%x $175.65     = $20.66 

9% x $344.42   = $30.99 
City  Co-ordinator    = 5% / 9% x $30.99      =$17.22

Team Co-ordinator  = 4% / 9%x $30.99      =$ 13.77  

The retailer gets
$2,131.89  the sale price
$     68.88 – as a Global signed up shop  (extra)
$     68.88  shop owner (extra)
$ 2,269.85 – Total 

The retailer marks his prices to reflect the cash back figures.

If he is ranked in the FlexKom system, he earns even more of the discounted value, which he would NOT otherwise have received. The entire value of the discount would have stayed with the customer. 

In addition, FlexKom pays the retailer 1.2% of all transactions of his loyal customers when they shop at FlexKom affiliated stores. 

All of this is achieved through the FlexKom terminal.


Now why would a retailer be interested in being in the FlexKom system? 

What’s in it for him?

The FlexKom system views retailers as partners in business and has developed a 
structure that will:

increase profits for the retailer without additional advertising

increase the retailer’s loyal customer base 

allow advertising for retailers through the FlexKom system

reduce advertising costs significantly through the FlexKom terminal’s SMS & 
   video-mail system with which customers can be forwarded information via his 
   ads in seconds

place his shop on the internet via the FlexMall, giving him a worldwide presence

earn him residual income from his loyal customers through the participation of 
   customers’ purchases in other FlexKom affiliated outlets

allow customers to make purchases and still get cash back, even though they 
   don’t have their card 

give the retailer a back office to check his commissions


Real residual income is very much alive and paid instantly in the FlexKom system.

The FlexKom organization also allows the retailer, through the system’s FlexkApp to

allow customers to make purchases with their smart phones


•   make extremely cheap phone calls worldwide - FlexCall


•   book cheap vacation packages - FlexHoliday


•   stay at 5-star hotels at significantly reduced rates – FlexHotel


The retailer will definitely want to be a part of the FlexKom system. 












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