A restaurant wants to change their menu and a printer has quoted £700 to produce them.
If the restaurant wants to generate more business in order to pay for the new menus he has a few options. If he is not a member of Silvatre then to generate the extra business he must provide an offer such as a 2 meals for the price of one deal.
By introducing a 2-for-1 deal the restaurant must sacrifice some of their profits on these additional meals. If they make £20 per table of 4 on the new offer then they need to sell 35 extra tables to generate the £700
If the restaurant is a member of Silvatree he can instead sell the meals that he would ordinarily sell for £100 for 100 Silva.
After selling 7 tables of 4 to Silvatree members for 100 Silva each, the restaurant has generated 700 Silva. The Silva can be used to pay for the printing of the menus with a printer who is also a member of the exchange.
With the 2 for 1 deal the restaurant needs to provide 35 meals forthe table of 4 to generate the extra money needed to pay for the menus.
By using Silvatree the menus have only cost the restaurant £245 instead of £700. This is how much it cost the restaurant to provide the meals.
Using Silvatree is a far more efficient mechanism for getting the most out of your business's spare capacity.
How did the restauranter and the Printer benifit for using Silvatree?
Each meal for menu resturant needed to sell 35 meals on the 2 for 1 deal.
With Silvatree the restaurant only needed to sell 7 meals to be able to pay for the menus.
Menus cost 7 x £30 + 5% Trade fee to 30= £245
The restauranteur did not have to bear the cost of the discount provided.
All diners still dined at a discount equivalent to their own Gross profit Margin!
There are numerous benefits to the restaurant from having conducted the business on trade. Some of these benefits are listed here.
There are numerous benefits to the printer from having conducted the business on trade. Some of these benefits are listed here.