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Personally I wish selling below cost were illegal across the board. It's a destructive practice and allows people who have no stake in one kind of market kill
by danssig 15y ago
Personally I wish selling below cost were illegal across the board. It's a destructive practice and allows people who have no stake in one kind of market kill that market.
Take the Amazon Fire, for example. They lose money on every unit sold but they don't care because they expect more sales in their real business: retail. How are companies who only make these devices (e.g. Apple) supposed to compete with that? What market are they supposed to use to makeup their losses. And how can they protect this other market from getting hit with the same thing?
- icebraining 15y agoHow are companies who only make these devices (e.g. Apple) supposed to compete with that? Apple doesn't only make those devices: see iTunes and the App Store. Besides, one can argue that they do the same in their deal with AT&T (which cuts $100 from the iPad price). But to answer your question, there is more to compete on than price; in fact, Apple knows that well, considering they've been selling Intel laptops with less bang per buck than other manufacturers, like HP and Dell, and still sells a lot.
- danssig 15y agoThis doesn't make it right. I'm surprised people on this site support below cost selling so much. It is fundamentally a "big player" practice that newcomers can't usually compete in. Imagine you made a company selling one kind of tablet that was vastly better than anyone else's and didn't have an iTunes or App Store to supplement selling below cost? Then you just can't even enter the market because other people are giving their product away. How can anyone say that is the market working? The market has decided this product is worth less than it costs to make? Then it shouldn't exist.