Bulb Energy reports HUGE £23million+ annual loss! (and late)

roddydogs

"Weel recoup that over a few years "' dont they realise that tarts getting the £100 will soon be gone to the next offer, see the referral thred!

wavelets

spadoosh wrote: »

... well theyre certainly offering something people want anyway.

Bribes? Backhanders? Cashback? ... or as I have previously referred to it, a Ponzi scheme.

Whichever term you call it, they are giving away money that they cleary cannot afford to do so, as they don't have it.

If MSE Martin were to stand out in the street giving out £50 notes, I'm sure there would be plenty people saying he was offering something people want ... but the reality is even Martin could not afford to do that for long, and at an increasing rate, as this supplier has been desperately doing to attract [STRIKE]members[/STRIKE] customers.

One day, the penny will hopefully drop, that revenue is only vanity, and the reality is that any fool can increase revenue by losing money. But every customer that loses the company money is a customer the company would be better off without.

JuneS

This is shocking, but can only be expected if someone is giving increasing amounts of cashback away to new customers like confetti.

If the supplier really thinks those who have moved to them chasing the cashback will not switch again to earn cashback elsewhere (not to mention obtain cheaper prices) ... then they will get a nasty wakeup call soon.

Don't get me wrong, there are a huge amount of so called sticky customers , but these are generally buying their gas from British Gas and their electricity from whoever was the original electricity supplier for their supply region.
(plus a small number who have moved into a property where a previous occupant has switched supplier at that address)

JuneS

The_Green_Hornet wrote: »

MSE are still pushing people towards them.

Not anymore, it would appear

Sorry! This deal has finished. Unfortunately our Bulb deal has ended

JuneS

spadoosh wrote: »

Saw this post this morning and had a look through. Whilst i appreciate massive losses arent typically good i must admit i thought theyve got to be expected when a new company breaks on to the energy sector. Theyre competing with the like of BG in a very price led industry.

Its a kin to tesla breaking in to the motor industry. You just dont make an impact trying to turn a profit on car 1. Nor do you make a profit on customer no1.

Bulb are offering something that others wherent, like tesla, the customers wanted it, which is why theyve been so successful. But they are competing in pretty much locked out markets, that hardest part is opening the door. They do that by getting loads of customers, they do that by making little money (if any) on them.

At the moment theyre reliant on faith. The faith of customers to stick around.


From what ive read of Bulb (having never read/heard much before this post), 4 years ago it was a dude at home getting peed off at his energy bills. Nearly a million customers 4 years later is very good, well theyre certainly offering something people want anyway.

Not a good comparison, imo.

Tesla fisrt have to develop the product they then plan to sell.
Developing and testing a brand new car to meet legislative requirements costs a fortune for any car developer, and Tesla also have the added issue of the new fuel.

Energy sellers simply resell something that already exists. They buy the energy wholesale and sell it retail.
Perhaps someone starting up reselling on ebay would be a better comparison (although I accept there's certainly more involved than that for an energy supplier)

Nathan94

Just wondering how long it will be before Ofgem are called into action again to rescue the poor souls who were enticed into joining this supplier?

spadoosh

wavelets wrote: »

Bribes? Backhanders? Cashback? ... or as I have previously referred to it, a Ponzi scheme.

Whichever term you call it, they are giving away money that they cleary cannot afford to do so, as they don't have it.

If MSE Martin were to stand out in the street giving out £50 notes, I'm sure there would be plenty people saying he was offering something people want ... but the reality is even Martin could not afford to do that for long, and at an increasing rate, as this supplier has been desperately doing to attract [STRIKE]members[/STRIKE] customers.

One day, the penny will hopefully drop, that revenue is only vanity, and the reality is that any fool can increase revenue by losing money. But every customer that loses the company money is a customer the company would be better off without.

Theyre breaking in to a market (the big 6). That kind of things needs money chucking at it.

I worked for B&Q. Theyd hold an advertising campaign for an item. Lets say a drill, theyd sell it at a loss. If everyone came in just bought the drill and went elsewhere it wouldve been very expensive. Some did and obviously you cant do anything to stop that but others, well they thought while were here we'll look at the wallpaper and bought some of that too. Maybe some plants.

B&Q when i was working there sold there fence panels at a loss. It was pennies so not a lot but they where a loss making item. Why? Why not just charge a few p more and make money? Well because wickes charged a few p more and if customer saw they could get the panels cheaper from wickes even just a penny theyd go there. So they made a loss, but the customer was in their store. Now the clever part. the brackets for fixing your fence panel, bought for 1p and sold for 50p. The brackets you could buy in wickes for about 20p So if you bought everything in wickes itd be cheaper. If you bought the panels from B&Q and the brackets from wickes you where the real winner. But then no one is going to do that for the sake of some brackets just go to where the panels are cheapest.


This is a company in its first 4 years of trading. NOt just that a company that is trying to take a slice of a multi billion pound industry. One which the main players have all been involved in for decades with long established brand value. Bulb aint got anything, they choose the profit making option and theyre more expensive so not getting new customers, theyve got no existing customers to fall back on so not making any money and theyve essentially got no business.

The reason they do is because of the principles of the business. Easier, greener and an ethos that seems to be directed away from lining the pockets of shareholders more so concentrating on stakeholders.

It might not work out but they think theyve found a gap, customers seem drawn to it, it might just be the discounted price but then it might be the green energy, could be the away from the big 6 we dont know.

spadoosh

JuneS wrote: »

Not a good comparison, imo.

Tesla fisrt have to develop the product they then plan to sell.
Developing and testing a brand new car to meet legislative requirements costs a fortune for any car developer, and Tesla also have the added issue of the new fuel.

Energy sellers simply resell something that already exists. They buy the energy wholesale and sell it retail.
Perhaps someone starting up reselling on ebay would be a better comparison (although I accept there's certainly more involved than that for an energy supplier)

Its a milk float. We made them in 1970. (and im a massive fan of tesla).

Youre arguing about product anyway. The issue is over leveraged start ups that arent making money. Most companies work like this. The new haridresser starting up, takes a loan out for all the equipment, the charge is the same whether youre the first or 100th customer but it isnt until the 85th theyre making money. Aldi and lidl have recently done it in the UK. Huge investment in property with no guarantees the customers would stay or even want it. Look at bunnings trying to break in to the UK DIY market cost em a fortune.

Basically businesses borrow the money, take risks and hope it proves viable long term. Short of funeral parlours i dont know of any industries that dont take on considerable risk when starting up in anticipating their future custom.

trykid

Bulb are playing it clever, but treading a very fine line. Offering £100 cashback per customer will end soon, its just not sustainable. Yes, gaining customers at a quick rate because of this, however, lots are leaving having increased prices 3 times in last 12 months.

I guess they will bank on a majority that will not leave for a few years at least.

But for sure, their prices will increase another 2 or 3 times next year. Remember, they don't fix prices. What has Martin Lewsi always preached?? is to fix your energy. Funny how now he promotes Bulb??

First utility were the cheapest this time last year, now to stay in line with profits, they are no way near. The same will be for bulb. Right now, its all about customer acquisition.

gadgetmind

spadoosh wrote: »

Its a milk float. We made them in 1970. (and im a massive fan of tesla).

Speaking as the owner of a Model S, it's a very fast and luxurious milk float.