OT: Zingerman's Business Strategy
Zingerman's is often a topic of debate around here, with some people believing it is the greatest thing ever, and others saying it is highly overrated. Regardless, it has become an Ann Arbor staple that people around the country recognize and associate with Michigan, which is kind of cool (this is not the first time they have been featured on NPR, I'm pretty sure they just like their sandwiches and so they do segments on them so they have excuses to go there).
What I didn't know about them was their very unique business strategy. I'm not a business guy. I took a couple economics classes in college and a business statistics class in grad school and that about sums up my "business school" background. But I did find this to be an interesting way of running a business that is more unique than most. Not sure how much you can scale up this strategy, but thought it was worth discussion among our many resident business minds.
LINK (embed below)
Westsider here, I found Zingermann's overrated mostly because of how much it is for a sandwich. That is not a $14+ sandwich. If it $8-9 I would think much more highly of them.
April 14th, 2016 at 10:07 AM ^
They actually talk about their website a bit, and on their website they explain why it costs what it does. What goes into the cost of the sandwich, what the mark up is, etc. And it's a universal employee thing, where everyone has a say, in what determines the price of it. Found that interesting.
April 14th, 2016 at 10:57 AM ^
http://www.zingermansdeli.com/menus/why-our-sandwich-costs-what-it-does/
Here's where they talk about it. I'm fine paying up for a superior product like Zingerman's offers. Everything they serve is just excellent and they don't cheat you on portions at all.
April 14th, 2016 at 12:12 PM ^
I doths think they protest too much.
The ingredients they use can't possibly correlate to a 50% markup over even sandwiches that can be considered in the high range.
April 14th, 2016 at 12:53 PM ^
Ah yes - we found our resident expert on food ingredient prices. Clearly those folks at Zingerman's are liars and you know so much more about their business than they possibly could.
/s
A business exploiting demand and broadcasting a niche business model to drive a unique place in the market that allows them to charge more and create more profitability? What are the odds?!?
If you believe them wholeheartedly, then I have a bridge that I'd love to sell you.
Obviously they've received enough attention for their absurd prices that they felt compelled to put up a webpage about it. You don't see BMW feeling the need to do that.
I do believe them, but that is b/c I have read up on their business and know people that have worked there (and know people that know the owners). It sounds as though you are not as informed.
And you're exactly the sucker that they cater to. Keep buying those $18 sandwiches, chief.
April 14th, 2016 at 12:56 PM ^
Its like any other premium product. People that truly appreciate that extra bit of quality and authenticity will gladly pay the price.
I like that they have a principle and stand buy it.
You want a cheapie sandwich? There's Subway for that. Not everybody has to be Subway.
So good for them, they've something that works for them.
I like that they have a principle and stand buy it.
You want a cheapie sandwich? There's Subway for that. Not everybody has to be Subway.
So good for them, they've something that works for them.
I mean, the flipside of it is that I can't go to Zingerman's more than once in a blue moon and when I want a deli sandwich I am far more likely to either go elsewhere or just make it myself on Zingerman's bread (which, incidentally, can be bought at Kroger or Busch's). I feel like they maybe lose out on consistent return business, not that it matters.
April 14th, 2016 at 12:13 PM ^
April 14th, 2016 at 10:16 AM ^
but you are paying for things you don't pay for when you get sandwiches other places - better ingredients and higher salaries/benefits. Obviously you can get a good sandwich for less money, but that's how they do things and it seems to work for them.
April 14th, 2016 at 10:22 AM ^
April 14th, 2016 at 10:26 AM ^
Guess it has been a while since I've been there. That's madness.
April 14th, 2016 at 10:26 AM ^
with less premium ingredients prepared by staff making minimum wage with no benefits, you have numerous options. Nobody is forcing you to go to Zingermanns. It seems to be pretty clearly not "absurdity" to do what they're doing, given that their business is very successful both for the owners and the staff.
April 14th, 2016 at 10:39 AM ^
What's absurd is that people use the Zingermann's employee model to advocate for higher wages at other restaurants.
"Hey, that Zingermann's place in Ann Arbor which caters to people in the top 3% of the US income brakcet charges $18 for a ham sandwich and is quite profitable. Why can't McDonald's in Taylor pay their employees as much as Zingermann's?"
April 14th, 2016 at 10:41 AM ^
which we can't get into here. My point is just that it's working for zingermann's, and nobody is forcing anyone to eat there. The mouth breathing rage directed at that establishment really baffles me.
April 14th, 2016 at 10:52 AM ^
People hate on Zingermans all the time. Why go to the Chop House when Knights is cheaper? Why go to the Gandy Dancer when the lunch counter at Monahans is cheaper? Why go see a Broadway show when the local middle school is putting on Oklahoma? BMW or Ford Escort? Lots of people find value n paying more.
April 14th, 2016 at 11:25 AM ^
April 14th, 2016 at 12:25 PM ^
April 14th, 2016 at 12:27 PM ^
Assuming you can afford it.
April 14th, 2016 at 12:53 PM ^
April 14th, 2016 at 10:46 AM ^
do their employees wear hemp or bamboo clothes?
April 14th, 2016 at 11:27 AM ^
I walked by Zingerman's the other day and one of their employees was taking a break outside, smoking his jeans. Smelled like really good stuff.
Gosh, the "premium ingredients" argument is just eyeroll-worthy, especially when they're obviously scrimping on all of it.
Let's take the Reuben. It's Sy Ginsberg corned beef. It's not gold-plated. They bake their bread in-house--there's no way the cost to make said bread justifies the price they charge for a loaf. How premium can you get? How "premium" do you really get with sauerkraut and Russian dressing? Oh, and don't forget the fun "do you want your pickles garlicky or cucumbery?" Because we're too dumb to know the difference between Old and New. And you get two spears where you used to get a full, huge pickle out of a barrel by the counter.
Or, let's take the Special. Used to be a bagel crammed with cream cheese and lox and onions and tomato. Cost maybe 8 bucks. Now it's 14, and it comes separated in a plastic box because they make you assemble it yourself. You get a few paltry slices of lox, a little tub of cream cheese, a few slices of tomato, a pile of red onion shavings, and one of their skinny little bagels. It's hilariously sad.
I appreciate their business model. But when that sandwich has gotten demonstrably smaller than it was 20-30 years ago, and costs pretty much triple what it did then... It's just window-dressing. They charge that much because they can--not because the sandwich is demonstrably worth it. For those of us who ate their in the early years and remember the lines that would stretch around the original building, who remember it as a deli, and not as a Foodie Palace Emporium of $10 artisinal marshmallows... Zingerman's is just a pale, touristy imitation of its former self, nice wages and employee perks and all.
You've just inspired me to stop by Busch's on my way home to pick up a Sy Ginsburg brisket and a loaf of Zingerman's Jewish rye to see if I can recreate this in my kitchen.
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April 14th, 2016 at 10:29 AM ^
I thought their business model was to build massive sandwiches and charge exhorbitant prices.
April 14th, 2016 at 10:01 AM ^
When we were in Ann Arbor we lived at 4th and Catherine (essentially across the street from Zingerman's). Everything there is overpriced.
I am a Maize and Blue Deli man all day long.
April 14th, 2016 at 10:03 AM ^
Zingerman's is great, but still second best in their own home town.
April 14th, 2016 at 10:13 AM ^
#5 (Grand Daddy) for me. You can't beat a fried egg on a sandwich. Used to go there before every home game. Damn I miss that place.
April 14th, 2016 at 10:22 AM ^
"Best" and "second-best" are subjective. What you can say is that he has an extremely successful business and a lot of rabid followers. He has to have done something right to get to that position.
April 14th, 2016 at 10:28 AM ^
I worked at Zingermans for 3 years and it isn't overpriced, they barely make a couple dollars profit per sandwich, you are just paying for a lot of things you don't pay for at a sandwich or really any food place. Zingermans employees get trained really, receive pretty good salaries, paid time off, there are retirment benefits etc. You are paying partly to send the people who are selecting and purchasing the cheeses and olive oil to actually work and learn about those things. Zingermans also automatically donates 10% of all profits no matter what to charity, they put addiitonal money aside to help out employees who may be having financial trouble. When I worked there they helped one employee avoid foreclosure and paid for anothers really expensive last minute airfare to california to be with a dying parent. Its just a different business model than people are used to and it results in a higher price. It may not be worth it to you as a customer to pay for those extra things but I can tell you as an employee Zingermans is easily 100 times better to work at than Maize and Blue deli so if that matters to you at all the $4 difference in sandwich costs does a lot of good.
Also the ingredients are way better but if having better bread isn't something you care about the corned beef is the same.
Edit to add there are some over priced items, the soda is stupid expensive and some of the sides can be too but like just don't order a soda.
April 14th, 2016 at 10:31 AM ^
All that work and the sandwiches still aren't worth the price compared to MnB.
April 14th, 2016 at 10:38 AM ^
Maize and blue is litterally the same corned beef on shittier bread, so while you get a cheaper sandwich I can pretty much promise you it doesn't taste better unless you really like plain white bread you can get at meijers.
If you care more about $6 than what a business does for the community or its employees that is entirely your perogative but Zingermans isn't fleecing people and making pure profit on the differnce in prices between them and maize and blue.
April 14th, 2016 at 10:53 AM ^
I will never get why people claim Maize and Blue is better regardless of cost. It's like M&B went shopping at kroger and then just make a giant sandwich with a bunch of butter on the outside of their bread. Then again, Michiganders aren't exactly known for their discerning palettes.
April 14th, 2016 at 12:17 PM ^
April 14th, 2016 at 11:06 AM ^
April 14th, 2016 at 11:23 AM ^
I mean pure profit on the difference in cost between zingermans and maize and blue. If a maize and blue sandwich costs $10 it probably costs them like 5 or 6 to make leaving them with a profit of 2-3 dollars per sandwich. A zingermans sandwich cost $18 but costs 16 to make meaning Zingermans also is only making $2 profit per sandwich. Of course they want to make a profit, they just aren't artifically inflating prices because they can to make a larger profit. It would be overpriced if it cost them5 or 6 dollars to make and they still charged $18 because they could do to reputation.
April 14th, 2016 at 11:48 AM ^
If a maize and blue sandwich costs $10 it probably costs them like 5 or 6 to make leaving them with a profit of 2-3 dollars per sandwich.
Wat?
I thought they said there would be no math involved in this post
From the restuarant business stand-point, there's really no such thing as "pure-profit".
That only exists in things like Wall-Street, Silicon Valley, Auto-Industry, and Goverment (you could argue starbucks when they convinced people that you should pay $5 for what before cost $1, and the most human-normative chemically addictive substance was then going to have added to it the most addictive human additive: sugar).
But people work hard at restaurants, and owning one is stressful (i would never do it, not even for 3x the average pay, it's not a job, it's an identity--but some love it, zingerman's is a 1% outlier, most other zingerman-like attempts fail miserably), owning/working food-service is not even close to what feels like "pure-profit".
What I'm saying is...I should have studied finance.
April 14th, 2016 at 11:35 AM ^
... he may or may not be a very rich man as you describe, but I can tell you he is one of the most down-to-earth, giving and practical guys I have met. He spent several hours working with my son on a school project just because my boy asked him and he lives in an unspectacular house and drives average cars.
Met his wife and one of his sons several times over the two years we were neighbors - just really good people and I have always been happy to support his business. I love it when good people do well for themselves.
April 14th, 2016 at 10:36 AM ^
Don't get me wrong, I like Zingmerman's and went there frequently (my wife loved the place). They have a great atmosphere and the additions they were making at the time that we moved were really cool. However, paying more than 40 bucks for two sandwiches (no soda) and a side seemed a little expensive at times.