Dear readers,
Thank you for coming here!
How does a gym make money and survive?
We probably all know someone who signs up for gym membership and never turns out after the first few sessions. Maybe some of us are that someone!
Exactly, this is how gyms make money and survive, relying on people who pay for services that they do not fully consume.
I knew this a long time ago and it gave me one more excuse not to exercise. However, I never really thought about it further until recently.
This is probably the most incredible form of “Compensation”.
People who never turn out in the gym after the first few sessions are “compensating” those who do turn out fully or almost fully.
Without the former, gyms would need to charge a much higher membership fee or other costs to survive.
This is incredible because it “rewards” people who persist and “punishes” people who do not in a way that is even not noticed by most people involved in it.
People who go to gym more often would not feel that they own it to those who come less often.
And similarly, people who turn out less often do not think their batchmates need to thank them for their “contributions”. Instead, they blame themselves for lack of commitment.
This is probably the most incredible way for the world to reward people who persist.
For people who are less persistent, they do not need to feel too bad either, because they are doing “Real Charity” to make the world a better place.
It is “Charity” because they do contribute to the survival and thriving of the “Gym” industry. Without them, even if “Gym” industry can survive, it may be only catered for wealthy people.
It is “Real” because the “contributors” do not expect any returns (Sign…they probably do not even know they are doing it). Charity does not get more “Real” than that.
You know what is more “surprising” and maybe “terrifying”?
This kind of “mechanism” is much more common in life than we think.
1.Books
There are two types of people who buy books: those who read learn and those who do not contribute to “Charity”.
Reading is not as “enjoyable” for most people as some forms of entertainment, such as TV, gaming etc.
So only relying people who read books they buy will seriously limit the development of the industry and increase the prices of books.
The industry needs people who do not read a lot to buy a lot of books.
2.Subscriptions
Have you been paying for subscriptions that you do not even consume, such as TV, music, magazine?
If you do, you are doing “Charity” and you are needed by the industry.
No need to hurry to cancel them, because you are part of the reason why the subscriptions are so cheap.
3.Extra staff bought during “11.11” sales
Did you buy any extra staff you do not really need during the sales festival because they are so heavily subsidized?
Again, you are probably part of the reason why those subsidies are possible.
It also exists in business world.
4.“Sharing” industry
“Bike sharing” took the world by storm two or three years ago.
And people invented all sorts of “sharing” based on the same concept, as ridiculous as “umbrella sharing”.
Tons of investment was pouring into the market as if they are “free”. Every player was burning tons of cash building their customer base, brands, employee capabilities, products, downstream and upstream supply chains etc and etc.
For those players who exited earlier, willingly or not, it was game over for them.
But for those who “persisted” longer, they got “compensated” with abundance of “almost free resources”, such as trained customers, tested business models, skilled employees, invested suppliers etc and etc.
In some cases, they even did contribute to the “traditional Charity” as we know it.
In Singapore, thousands of refurbished “shared bikes” were shipped to Myanmar to help the poor school children in their commute from home to schools.
I am sure there are more such examples both in life and business.
In a summary, if you really want to achieve something that is not “obviously wrong”, stick to it and you may take advantage of the “compensation” in time from those who quit to succeed.
Till next time!
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