Loss Leaders

According to Amazon.com, their profits are down this year. This is despite a wildly successful Christmas season? How can you be wildly successful and sell a record number of products and still come up short, profits-wise? Because Amazon is selling their biggest and best items, the Kindle lines, at a loss.

The underselling of the Kindle Fire is something businesses learned from Thomas Edison. He sold his incandescent light bulbs at a loss for three years until he got manufacturing costs down under the retail price. By the end of the fifth year, he had made back his losses and a little extra.

We tend to think that you make money by charging more than it costs, but just like Edison and Amazon, sometimes you make money by building a sold customer base – what modern marketers are calling a “tribe”.

I have written on this whole idea of tribal marketing before. I am not sure I buy into it as it is sold, but there is no doubt that people’s loyalties can be won through a product gateway. For Edison, it was the bulb which then caused people to buy wiring and electricity service and maintenance – all of which Edison provided. For Amazon, it is books, music, cloud services, and other sundries all of which you buy through their site.

A product gateway is not deception. It is a legitimate, quality product that drives sales of other, connected products. You can lose money for a little while as long as you recap it later on and it solidifies your position in the marketplace.

I can only imagine the church growth books that have been written or are being written about this subject. Every time something happens in the business world, the church world feels it needs to follow suite. Here’s the thing about church and why marketing and stuff ultimately doesn’t work.

We don’t have a product to sell.

We shouldn’t anyway. Sadly, a lot of supposed churches have developed products and made their organizations more like businesses than gatherings of sinners worshiping their God. Pastors and lay people a like a culpable in this deviation that I doubt Jesus would have approved of.

You can’t sell people the Gospel. You can only show God’s glory through worship and work.

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