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"Their claimed profit margin is 94%" So they're totally ripping the consumer off then...
by siquick 11y ago
"Their claimed profit margin is 94%"
So they're totally ripping the consumer off then...
- hayksaakian 11y agoI argue that "ripping off" is based on the value that a consumer receives relative to the price of the product or service. Imagine you say: "I will tell you a joke, if you laugh then you must pay me 100 dollars" If I give you 100 dollars, and you just run off with it, I got ripped off. If I give you 100 dollars, and you tell me a really funny joke, then I was not ripped off. Your problem seems to be that telling jokes is virtually free, and the profit margin might be 94%.
- siquick 11y agoYep I get it but it seems like an incredibly naive and almost arrogant message to relay... "Hey customers, buy our product for $16 even though it actually cost $1 to make"
- jegutman 11y agoOr they have high fixed costs.
- JauntTrooper 11y agoThat would create a high 'contribution margin.' A profit margin usually includes fixed costs. :)
- rokhayakebe 11y agoIf spoon costs $0.10 to make, and you cannot make a solid business selling it for $0.30, while at $2.00 per spoon the market is willing and you get to create jobs, what shall you do?