A list of products whose prices we''ve lowered—and why?

A journalist recently wrote the following about Rifuzl:

[At Rifuzl] prices aren’t rising—they’re falling. They don’t offer discounts, but if they get a lower purchase price, they lower their own prices as well. It’s a completely different philosophy than that of most retailers. Ultimately, this is evident both in the customers themselves and in the atmosphere of the store.

Igor D. Đurović, In Store magazine

With this article, I aim to demonstrate that these aren’t just empty words for journalists, but that at Rifuzl we live by our values and thereby enable a more environmentally friendly shopping experience for a wider range of people.

I’ve already written about prices and why they are what they are.

The philosophy we follow at Rifuzl is very simple. About one-third of the price of a product you buy from us consists of our own fixed costs (the rest goes to the supplier). Examples of these costs include: rent for the space, employee salaries, external services (e.g., accounting), digital services, marketing, supplies, bank fees, investments in equipment, and many, many others. It all adds up in the end.

Rifuzl’s financial goal isn’t to maximize profit, but rather to break even. This means that once we’ve settled all our obligations (paying suppliers for products, employees’ salaries, VAT and taxes to the government, etc.), the books should balance out. If we have too much left over, it means we took on too much at the start.

With this business philosophy, Rifuzl can always offer you the most affordable prices that are sustainable in the long run. The general tactic of stores is to set the maximum price that customers are still willing to pay and then “lure” customers with discounts and promotions. I have moral reservations about this approach, and besides, it’s very complicated and requires a lot of mental effort. That’s why we stick to a simple formula of an average margin of 30–35%, which is fair to everyone.

My overarching role at Rifuzl (and at the same time, my greatest pleasure?) is also to optimize operations wherever possible. I want Rifuzl to operate as efficiently as possible and without unnecessary costs.

An example of such optimization is the automation and digitization of paper-based bureaucracy and the payment of all obligations. Since we already do business with nearly 100 suppliers, we receive an average of 10–20 documents every day, mostly invoices and delivery notes. If someone were to receive, sort, enter, pay, and archive them manually, it would mean that just for this part of the business (which doesn’t add value but is a necessary evil), we’d have to employ one full-time person. That means one additional salary, higher operating costs, and, as a result, we would have to raise prices in the store just to continue operating normally.

Fortunately, I’ve automated this part to the point where all the paperwork and payments take me about 1 hour per week. What’s more, since computers don’t get in each other’s way while working (unlike people), there are practically no errors in the paperwork, which leads to even greater savings over the long term.

On Collaborating with Suppliers

As Manca and I recently mentioned in an interview, we see the store solely as a link between producers and customers. Our success is therefore defined by how well we nurture relationships with both! The most visible aspect to the outside world is that we strive to be as pleasant a store as possible—we achieve this primarily through our employees, but also through the store’s atmosphere, how we communicate, and so on...

What’s less visible from the outside is that we also put a lot of energy into fostering good relationships with our suppliers. Without them, Rifuz’s shelves would be empty. I believe that if we at Rifuz are fair and good to our suppliers, they’ll be fair and good to us in return.

I sent the email below (slightly adapted for each supplier, of course) to our suppliers in March and April:

Hey, [supplier’s name]!

With a few months’ delay, I’m compiling the 2020 business statistics for all of Rifuz’s suppliers, and I’ve decided to share them with you:

[statistics on how many times they delivered products to us, how much waste was avoided as a result, and how many invoices we paid and for what amounts]

It’s been almost two years since we started working together, and the quantities we order have increased significantly since then. Manca and I have never pressured our suppliers regarding purchase prices. When we opened Rifuzl, we wanted it to be the kind of store where suppliers would be happy to work with us because they would be paid fairly and the money would always be in their bank account by the due date.

Good payment discipline toward suppliers is a given for us, and we really strive to ensure that all obligations to suppliers are settled on time. This has required a tremendous amount of planning, a lot of energy, and automation—and even that wasn’t always enough—but Manca and I have gone out of our way (at our own expense) to ensure that everything was paid on time.

However, I’ve heard that this isn’t the case for everyone and that it’s still rare in Slovenia for debts to be settled on time. I hope you notice and appreciate this in our collaboration.

Since I believe in sincere (business) relationships, I’ll ask directly: please consider whether, given our good working relationship and the larger quantities we purchase, you could offer us better purchase prices for the products we buy from you?

You don’t have to answer right away; you can take a week or so to think it over and run the numbers, but I do expect a response, regardless of what it is.

If you can’t, Manca and I will understand, and it’s no problem—it won’t make our partnership any worse.

But if you can, let me say that we won’t be lining our own pockets with those better purchase prices. Better purchase prices allow us to lower prices in the store as well, bringing us one step closer to our goal of making eco-friendly shopping more accessible to everyone. Thank you in advance if you’ll contribute to this as well.

I’d love to hear your feedback on how you perceive our collaboration, and I’m open to any criticism—because that’s the only way we can improve! :)

Best regards, Primož

P.S.: I’ll also understand if we ever need to raise prices in the future due to higher costs or raw material prices. After all, a good relationship works both ways! :)

I’ve received very positive responses from most people, though some were also open to lower purchase prices. Since we’re committed to our fixed-margin philosophy, we’ve passed on the savings for all products where we secured better purchasing terms and lowered prices in the store as well.

Suppliers who have made prices more affordable at Rifuzl:

• BeLife
• Afrotera
• Majini Hrustljavčki
• Gabaroni
• Hrib
• Kekec Organic Farm and Cheese Dairy
• Strlet Farm
• Lalicup
• Green Apple
• Šoster Organic Farm
• EcoPrekmurc

List of products with new, lower prices

• Kombucha
• dried mango
• cocoa powder
• freeze-dried fruit
• organic lentil pasta
• organic chickpea pasta
• organic spelt spaghetti
• organic kamut pasta
• organic cashews
• organic dates
• organic Greek sheep''s milk yogurt (lower price starting next week)
• organic sheep''s milk cream cheese (lower price starting next week)
• organic sheep’s milk kefir (lower price starting next week)
• vanilla, Marko, Zdenka, pistachio, blueberry,black currant, vegan black currant, and mangoice cream
• organic whole wheat flour
• organic semi-white flour
• organic whole-grain wheat flour
• organic wheat semolina
• organic spelt fine flour
• organic spelt whole-grain flour
• organic spelt flakes
• Lalicup menstrual cup
• Laundry gel:lavender/orange/unscented
• Laundry fabric softener (lavender)
• Laundry detergent for whites
• Puer, bleach, and stain remover
• washing soda
• dishwasher detergent
• dishwasher salt
• baking soda
• citric acid
• liquid soap
• bag for making plant-based milk

Shopping with less packaging is becoming more and more accessible

Sometimes it seems to me that Rifuzl isn’t getting anywhere from week to week. But when I look back, we’ve come a long way in just two years and have toughened up a bit in the process (some of us even literally?).

This journey is also starting to make an impact on our suppliers, as we’re forging ever-stronger ties with them. I’m glad that the suppliers have recognized this on their end as well. Ultimately, all of this is leading to tangible changes that are making our “zero waste” store more accessible to a wider audience.