<< Prices of products are based on what the market will bear. They have little to do with production and R&D costs besides a base line minimum price the company can charge to cover costs.
Charging what the market will bear is the cornerstone of capitalism, and freedom.
If I was to make widgets that cost $5 to make, and sell them for $500, that is my right. If people buy them, I turn a profit and I'm successful. If no one buys them, I either lower my price, or go out of business. >>
You CAN charge what you want. None's refuting this right. BUT... why? If you can make more money lowering your price and selling a larger quantity. Let's look at the MSFT products... office xp.... AND focus on the home user. I'm not talking about business here. I'm sure that the overwhelming majority of users haven't bought the product, they've pirated it. They've pirated it because it costs alot. Many don't have that amount of money. Me for one, I didn't buy it eventhough I really wanted it because it was too expensive. This is why I settled for Star Office. It's free.
If microsoft charged $50 for the product, I would have bought it. And they would have made $50 - the material cost. But it's still some money the can add to their bottom line. And I am very certain that ALOT of people would find $50 acceptable and buy their product. This way they make money where normally they wont.
Besides, people will be more supportive of MSFT. A big complaint that people have with their OS is that they have to pay alot for something that sucks. If the product doesn't cost so much, you won't get as many complaints and you will have a more loyal userbase, where loyalty isn't forced.
If someone produces a product that run's MSFT software and costs 1/2 as much watch how fast people flock to it. (and don't mention WINE, there's a reason it's in the state that it is)
<< In fact, raising prices combined with creative marketing and in some cases, limited production, can often times result in MORE sales. Take the designer clothing lines as an example. Often times, the overhead costs of designer clothes are no more than off brand clothes. But with effective marketing, and higher prices, these clothing lines become more desirable. Collectors items are an example of how limited production can influence what the market will bear. >>
There are many out there who purchase fake designer stuff, because it's alot cheaper. They don't care for quality as long as they can show a convicing label. Fake rayban's come to mind here... you won't believe what sort of market there is for this stuff. This is fine... but it's a separate issue. This doesn't address the issue of piracy.
I am saying... MAKE money where you won't usually make money. Charge the companies more if you are so concerned that they will make lots of cash because of your product. The average joe isn't gonna make that much from your product. Don't treat them like a big company.
My mom just mentioned someone that we know who got 85k job working with 3D studio max. Well, this has peaked alot of interest with me... but I cannot do anything about this because I can't afford the software to learn on my own.
<< In short, the prices on software are set at what the market will bear to maximize profits for the company. They are NOT set by any childish sense of entitlement, or altruism. >>
No offense, but I feel that this is pure rubbish. Selling 10 items at $500 will make you $5000 with limited exposure. Selling 100 items at $50 will put more of your product out there making you more popular and giving you the same profits.
And as for the incorrect estimate... please correct me... how much does a car cost to produce?
Facebook
Twitter