3 ms·
My brother described pricing thusly: there are two main types of pricing, cost plus, which is good if you like to be poor, and value-based pricing.
by ericb 18y ago
My brother described pricing thusly: there are two main types of pricing, cost plus, which is good if you like to be poor, and value-based pricing.
- swombat 18y agoMinor nit-pick: Amazon does cost-plus... Jeff Bezos doesn't seem that poor to me. Also, letting what costs you money drive your prices is not quite the same as doing "cost-plus". We're not saying "We need a margin of X% on our cost per gigabyte". We're saying "Gigabytes are what costs us, so, since we want to charge as little as possible, we'll charge for gigabytes used (since they cost us), to maximise adoption. Now, how valuable is a Gigabyte to our customers?" The result is a price that is quite detached from our actual cost.
- jacquesm 18y agoJeff Bezos doesn't sell a service, he sells goods. Well, other than EC2 and such, but arguably they are not what you think of when you refer to 'Amazon'. This actually makes me wonder if there is a breakdown of income for Amazon separating out services and goods.