Terra Bite Lounge: Voluntary Pricing Lets Small Eateries Give and Get Back

Terra Bite Lounge

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On its face, Terra Bite Lounge looks like just another coffee shop. The menu features the de rigeur sandwiches and a selection of lattés. Until you look closer and realize that no item on the wall menu has a price mentioned next to it.

That’s because this eatery follows a unique and innovative business model that’s fast catching on elsewhere — customers are encouraged to pay whatever they wish for their food purchases. They can leave their payment and tips in a locked box installed for that very purpose.

According to the café’s founders, in a business model like this people pay whatever they can afford, however low or high that amount might be.

Although not very common, this kind of business model is not unknown in the country, and it definitely seems to have had some financial success. Terra Bite, for instance, serves around 100 customers a day and each customer ends up paying about 2 or 3 dollars on an average. While this may mean that they are making substantially less than other coffee shops in the neighborhood, they have still been able to cover operating costs. And it’s not that hard to understand why. Contrary to what you might expect, people who visit the eatery don’t rip the owners off by paying less than they can afford. They actually end up paying as much as the item costs elsewhere and sometimes even more. The uniqueness of the concept also helps it stand apart from the rest of the market, adding to the profit worthiness of the model.

Not to mention the loads of good karma that comes from doing a good deed.

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