2 ms·
eh, you are just used to commodity markets (which really, I think, is where free-market capitalism outdistances everything else so sharply) In a commodity mark
by lsc 16y ago
eh, you are just used to commodity markets (which really, I think, is where free-market capitalism outdistances everything else so sharply)
In a commodity market, nobody can charge much more than the cost of production or else you get competition undercutting you. Of course, nearly everyone puts a whole lot of effort into convincing customers they are not in a commodity market.
Personally, I'm also much more comfortable in commodity markets as well... and in my space, because everyone else is trying so hard not to be a commodity, this isn't as hard as you'd think.
But yeah, lots of people are offended when you charge more than a reasonable margin over the cost of production, as you would if it were a commodity. But you know what? nearly all software companies don't want those people as customers, simply because if you apply the commodity model of capitalism to software, you get open-source software.
the thing is, companies like 37 signals, I don't think, care that they offend people who expect to pay commodity prices. Most businesses want customers who are willing to pay a premium for a premium product.
Now, if I were to run a workshop, I'd be very concerned, because my customers are people who want to pay commodity prices; people who would be offended by large profit margins.
Some people say those are bad customers to have; I mean, if I can't stay ahead of the crowd price wise, I'll sink pretty fast. On the other hand, serving this market is much easier (well, for me, anyhow) than serving the 'premium' market. It's a market I understand, though, and one that is under served.