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The Game Behind the Game

There is the business you think you're running and then there's the business you're actually running.

Case in point: Katz's Delicatessen. You think they're in the sandwich game. But they're not. They're in the margin game:

The fundamental problem facing every remaining deli, Katz’s included, is that the gargantuan sandwiches for which they are known aren’t very profitable. Rather, they’re a legacy of the early 20th century, when brisket (used in corned beef) and navel plate (the fattier, bovine belly meat Katz’s uses for pastrami) were considered cheap trash cuts and hundreds of Jewish restaurants could compete for immigrant clientele with rock-bottom prices. But the days of inexpensive navel and brisket are long gone—thanks in part to the national love affair with Texas-style barbecue—and delis can only raise their prices so high before turning off customers. As a result, the margins on a pastrami or corned beef on rye are perilously thin. In his 2009 book Save the Deli (an indispensible read for lovers of Jewish comfort food), David Sax writes that “most New York delis are breaking even or losing money on their namesake item.” Profitable sandwiches, he reports, make margins somewhere between 5 and 15 percent.

The full article details that most of the deli's profits come on other orders (like soda). Same thing goes for a lot of restaurants.

At Batch, we're not in the subscription box game. We're in the generosity game, wanting to be top-of-mind for anyone looking to give someone a gift for any reason. The NFL is in the entertainment business. Teachers are in the inspiration business. Newspapers are in the fear or advertising business and on it goes. 

Go ahead. Pick a category that makes sense so people understand what you do. But be very aware that you're also playing another game.

And, in case you're not sure, we're all in the people business. Delighting others is something you'll need to do, no matter what game you're playing.

Sam DavidsonComment