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This seems like a great marketing technique for up starts trying to compete in the quality/price space. In the chicken soup example, for instance, cost to produ
by jrwoodruff 5y ago
This seems like a great marketing technique for up starts trying to compete in the quality/price space. In the chicken soup example, for instance, cost to produce is a strong indicator that the soup has quality ingredients, and isn't just a big markup on some generic condensed soup.
It's a similar thing with the backpack, but in the other direction - this price isn't low because we cheaped out on manufacturing and materials, it's cheaper than J. Crew because they spend too much on marketing.
The line item cost breakdown is an indicator of honesty and product quality, which of course increase trust. That's not going to work if you're selling $10 shirts for $120
- lupire 5y agoThe shirt costs $70 in "labor" of the CEO.
- jkestner 5y agoUpstarts, perhaps. Startups, I wonder if seeing that the $50 gadget costs $60 to make will have a positive impact. It may signal that the cost is being subsidized by investors (and the business may disappear) or by selling your data. But I'm all for transparency to make better decisions.
- infogulch 5y agoWell then the presence of a cost breakdown becomes a selling point. If the price of your product is unusually low compared to your competitors that openly display their costs and you don't, maybe that would raise some (deserved) suspicion that something else is going on.