What's a fair scrip deal for vendors and hosts?

[WhipItGood]

Hi, as a vendor/sponsor I'm about to be a part of my first large tournament where there will be multiple vendors and scrip payouts. My usual prices overall are fairly low with a 40% mark up on average. The tournament host originally offered a 75%/25% scrip deal, which means 2/3 of my profit margin goes to the tournament, 1/3 to me, and that's not including any labor or expense adjustments on my end.

I contacted him and said I'd prefer a profit split closer to 50/50, and that I could accomplish this by either going with an 80/20 split, or by having higher prices on my merchandise but offer a cash discount, thus making my prices higher for scrip only. In effect, the higher margin I'm seeking can either come from the tournament or from the players.

We're going to speak on the phone soon to finalize the scrip deal, so I thought I'd get some opinions here, as I really have no idea what's a fair deal.

The TD is, of course, allowing me to vend at the tournament, which is of course a benefit to me, and he's paying out in script, which is an additional benefit to me, which is why a split of some sort is obviously fair.

TD, if you're reading this, you can see I'm doing this discreetly and just in the interest of fairness to us all.

 

[DavidSauls]

Just guessing, but I'd think that the TD would want the same split with all vendors. Otherwise, he risks hard feelings when different vendors discover they're getting different deals.

Also, from the TD's perspective, he's calculated a certain amount of income from the split (25% of prizes) to pay other tournament expenses. He may not have much incentive to take a smaller cut, or a loss, so players can get more merchandise for their scrip (due to your lower prices).

As I said, just guessing. He may have entirely other ideas, but I think that would be MY position.

 

[WhipItGood]

Thanks David.

 

[Dave242]

How does the TD know your costs? What if you have negotiated something better than book costs for yourself? Can you negotiate your costs to include your overhead?

Seems like a weird business deal to me.

 

[Dave242]

A better arrangement would be to pay a flat rate fee for vending rights. That rate is known up front to all vendors. It could be done by square footage to make it fair for different sized vendors. Then you refund the TD X cents per scrip dollar you take in. This rate is also known to all vendors. You keep all the rest of the money you make.

 

[krupicka]

The vendor for my events has all stock marked with a higher scrip price (close to retail) and then a discounted price for those playing with US currency. This has been working for us.

 

[Dave242]

That only serves to further the myth of the Am Scam.....by actually making it a scam.

 

[krupicka]

It is not a scam at all when he's not really making any money when the discs are being paid for by scrip.

 

[Dave242]

I'm talking about the perception of a scam by having higher prices for scrip than cash. The customer will ask why. The answer by necessity points to an inequity/unfairness to the customer......a scam.

 

[BgWvDave]

why would any disc sold or recieved in script payout be priced anything other than retail?

MSRP needs to be better inforced by disc manufacturer's.

 

[Pwingles]

Def dont wanna outforce it

 

[ChrisKramer]

There are many examples of cash discounts throughout the retail business. Scrip price being higher than cash price is not a scam.

 

[elnino]

That only serves to further the myth of the Am Scam.....by actually making it a scam.

you won money.... but it is only worth 80cents on the dollar....sounds like a scam.

i don't understand the argument but if a retailer is asked the question why does it cost more with script what can he really say???

 

[JTacoma03]

Hi, as a vendor/sponsor I'm about to be a part of my first large tournament where there will be multiple vendors and scrip payouts. My usual prices overall are fairly low with a 40% mark up on average. The tournament host originally offered a 75%/25% scrip deal, which means 2/3 of my profit margin goes to the tournament, 1/3 to me, and that's not including any labor or expense adjustments on my end.

I contacted him and said I'd prefer a profit split closer to 50/50, and that I could accomplish this by either going with an 80/20 split, or by having higher prices on my merchandise but offer a cash discount, thus making my prices higher for scrip only. In effect, the higher margin I'm seeking can either come from the tournament or from the players.

We're going to speak on the phone soon to finalize the scrip deal, so I thought I'd get some opinions here, as I really have no idea what's a fair deal.

The TD is, of course, allowing me to vend at the tournament, which is of course a benefit to me, and he's paying out in script, which is an additional benefit to me, which is why a split of some sort is obviously fair.

TD, if you're reading this, you can see I'm doing this discreetly and just in the interest of fairness to us all.

Forgive my noobishness in this area, but could you enlighten me on what a "75/25 split" means?

My initial reaction is you mean that you pay $0 vending fee upfront but he takes 25% of your weekend earnings.

Combine that with different prices for script/cash and this does add up to a scam IMO. The TD is taking money to allow a player to play, then getting kickbacks due to the marked up prices of the vendor from those that place. He's effectively giving himself a discount on his payout.

All the while, you're paying him 25% of your earnings (a higher % of your profit) just to be "the guy" that can take fake money? I mean...other than it being an ******* move, what would stop you from setting up "coincidentally adjacent" to the tournament and just selling plastic? You would keep 100% of your earnings and have the same customers.

People that have done this, please let me know what I'm not understanding (I'm sure there's something)...but it just seems like the only people winning in this arrangement are the pro's whose purses are stuffed more as a result and/or the TD.

 

[Dave242]

you won money.... but it is only worth 80cents on the dollar....sounds like a scam.

......... if a retailer is asked the question why does it cost more with script what can he really say???

Very succinct way of putting it. Thanks.

Another way of putting it is that if you are using scrip at a deflated rate (say 80¢ on the dollar) would you let a person who constantly cashes pay their entry fee I to their next event with scrip? If it is $40 per event they will give you $32 real money for the first event, $25.60 the next, $20.48 the next and so on.

Why not just pay them out 20% less to begin with? Oh, because then 100% payout is either not 100%.....or it costs more to the organizer.

I cannot figure out a way this approach is not a scam. My proposal above a much better capitalistic approach.

 

[NOStheBOSS]

I mean...other than it being an ******* move, what would stop you from setting up "coincidentally adjacent" to the tournament and just selling plastic? You would keep 100% of your earnings and have the same customers.

Well #1 it is sketchy and generally frowned upon. You never want to build your reputation as a shady business.

#2, you would not be included in the actual tournament payout, and while you would indeed keep your normal profit margins, you would not move near as much plastic when players are wanting to spend payout, not cash.

I agree with the notion that vendors pay a flat rate per square footage of space. Then they redeem the "tourney bucks" they receive from players for cash from the TD for an agreed upon rate. This rate should not do anything but help the TD cover expenses or whatnot and therefore should not be anything too extreme.

However, this whole "scam" business is why I am for the trophy only movement. Am tournaments should be about the camaraderie and competition, round ratings, a players pack, lunch, etc. If you want to receive cash or prizes for playing disc golf, play pro. When I won my adult league basketball tournament last year, we didn't each win 5 basketballs and a 3 pairs of shoes.

 

[krupicka]

When the PDGA standards state 100% payout, the intention behind that is at retail value. It doesn't matter how much that prize actually cost the TD. We could choose which discs to hand out directly as payout and then the issue is moot, but players prefer picking their prize, so we give them that option by using scrip. My vendor also likes giving players a good deal and rather than haggling over the price of the discs at each transaction when players are paying cash, he posts a discount that he is willing to give. With scrip he doesn't have the room in his margin to haggle or offer discounts.

Our events regularly payout Ams at 130-140% retail value. I take great offense at calling my events a scam. I am not cheating anyone out of anything and our events are generally considered the best value in the area. I will take action if you proceed with this libel.

 

[jsc430]

....... I will take action if you proceed with this libel.

1. Is this guy serious? He knows this is the internet right?

2. Does he know anything about the law? In a defamation case, the statement has to be false for it to defame you So truth, as is the case here, is an absolute defense. No to mentioned actual damages must occurs, and all you are is a little butt hurt.

 

[NOStheBOSS]

1. Is this guy serious? He knows this is the internet right?

2. Does he know anything about the law? In a defamation case, the statement has to be false for it to defame you So truth, as is the case here, is an absolute defense. No to mentioned actual damages must occurs, and all you are is a little butt hurt.

Yeah, I'm really not sure how he would even find out who some of these people are... think he just needs to drink his juice and take a nap

 

[BgWvDave]

Def dont wanna outforce it

off all the incomplete sentences and typos in this thread that is the one you latch on to?:clap: