Today, I went to see the fireworks in Vancouver. It was interesting because this was a city-funded fireworks display, stepping in after the original show lost its funding. It was nice to see the tradition continued. Usually, at these types of events, there are plenty of food vendors. What really surprised me was a vendor set up to sell cotton candy. While that seems normal, when you looked closely at the sign it said the cotton candy was actually free and that they were only accepting tips. It seemed strange.
You’d think a vendor operating like that during a massive event would go broke from the sheer crowd size. But it seemed to be working. People were tipping and since cotton candy has exceptionally high profit margins, the strategy makes sense. Where someone might normally hesitate to pay full price, getting it “for free” makes them much more inclined to drop $2 or $3 in the tip jar.
That might actually net him more per unit than a fixed price, especially combined with the massive volume. Watching him work, he was producing it continuously, so the material costs were minimal. It really makes you wonder if “pay-what-you-want” or tip-based models are a viable strategy in high-traffic event settings. I know some restaurants have tried it with mixed results, but seeing it work in such a fast-paced environment was eye-opening.