4 ms·
I'm surprised nobody mentioned that services like Salesforce that charge per user SaaS could easily not bill "idle" users that don't login, or possibly operate
by sh1mmer 18y ago
I'm surprised nobody mentioned that services like Salesforce that charge per user SaaS could easily not bill "idle" users that don't login, or possibly operate below some threshold.
I think swombat's point about balancing adoption and profit is a good one. For example the US pharmo-giants miss out on the market of millions of Africans who need really cheap drugs because they are seemingly too afraid of cheap imports. It's not the production cost it's their refusal to lower the "value price" to an appropriate level in that market.
- anamax 18y agoIt's not necessarily true that they'd make more money selling to more people at a lower price. Revenue = avg selling price * #sales Cost = avg cost * #sales Profit = (avg selling price - avg production cost) * #sales If they double #sales but the average price goes down by <50%, they're going to lose revenue. If they triple the number of sales, they'll reduce profit if the cost is >50% of the post-reduction sales price. Yes, increased sales can result in reduced average production costs, through both reduced marginal costs and spreading the fixed costs across more units. (The latter can be a big deal for drugs.) However, the actual numbers matter. US drug companies try to do price discrimination to address these issues. However, if selling low-priced pills to Africa reduces their average selling price too much, they're not going to sell to Africa.