The industry charges 10% commission… we now charge 0%. I’m not certain if I should be writing this blog and marketing it to the world, but truth be told, I have absolutely no worries or hesitation that this company is going to be a glorious success, and I’d rather be an organization dedicated to transparency than secrecy. I hope that some day people reflect on SWAE and words like militant and absurd transparency come to mind.
In order to justify the first sentence of this post I’d like to turn to a make believe story. There is a level of true sustainability if a project / company / organization can offer an absolutely no risk guarantee. I know that that sounds boring, but please, let me explain. Let’s look at a made up solar panel company as a prime example. We will call the company “Sun Power.” Sun Power is deciding how they can sell solar panels and turn a profit while doing good. All and all, this sounds great. They sell their solar panels at a few thousand dollars for installation and the parts. They are making money while doing good. But there is an incredible opportunity cost with these type of business models and I think that the paradigm MUST change. The issue here is that by pricing the solar panels at such a high cost (even if you can use credit or monthly payments) they are not able to sell to the majority of the people (middle class and lower economic classes). In doing so, they are not able to reach their purpose nearly as well, promoting clean energy, and they are only able to seize a fraction of the market. Now, Sun Power does have another option.
What if they make it a no brainer? Rather than charging anything up front, they have their customers simply pay for the installation and materials over time by comparing old energy bills with your new (solar energy) bills, and deducting the difference. They would then take that difference so you, as a home owner, would just be paying the same monthly bill that you would have been paying were the solar panels not installed (of course, they could charge a small interest on this too). Over a few years the solar panels would be paid for and at that point, not only has the customer raised the worth of their house and is saving lots of money every month on energy bills, but they are also doing a great thing running a house off of clean energy. With a model like this (obviously this is completely made up), a solar panel company could seize the entire market share because at the end of the day, it would be silly for the customer not to sign up. (I’ve often thought about starting this company if anyone wants to join =).
Now, back to SWAE. At SWAE the only way we make any revenue is if we are getting our partners revenue. We never charge up front, monthly, exit fees, or advertising fees. We only get business if we are getting our partners more business and in turn, our success is based in making them successful. This sink or swim mentality is beautiful and I believe it is the only way it should be and it is the reason we will be successful. With that said, at SWAE we also give outfitters the ability to make bookings and sell vouchers on their own website. The industry normally charges 10% for this type of service on every booking, so we decided to cut the standard and take a 5% commission. But this was still bothering me because we were charging outfitters for business that was already coming to their website. Although we were greatly enhancing the likely hood of a customer booking once they got to their website, the customer was already coming to their website and I was uncomfortable to profit from that as a partnering company. After much deliberate thought and consideration, we now charge our partners 0% commission on all bookings or voucher purchases made on their websites so long as they offer their trips on our website. In doing so, we are able to do what “Sun Power” could do with the industry. We are able to sign all of the very best local outfitters (no matter their budgets) because they would be silly not to sign with us. It never costs them anything and we only take a small cut if we are getting them customers they would not have normally gotten to their front door. In doing so, we are now able to be very selective as to who we want to partner with. Only human powered or environmentally friendly adventure sports (more in next blog) and only the best outfitters in the area. Oh, and the best part, it is now officially impossible to undercut out rates =).
Good talking with you today. I love what you are doing with SWAE!
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