On Tue, Sep 21, 2010 at 5:37 PM, Andrew S. Baker <[email protected]> wrote: >>> But another way to look at the question is, "Is the price I am paying >>> reasonable based on what it costs to produce the thing I am paying for?" > > As I like to remind people who bring that up when I'm consulting for them, > "The real important question is not what it costs me (ASB) to perform this > function, but what it would cost *you* to perform it without me...
That works as long as no one can offer a comparable but lower-priced product. If your price is high because your costs are high (living, education, experience, etc.), chances are good you'll have continued work -- potential competitors will likely have similar costs. If your price is high while your costs are low, that's another matter. If competition moves in, your customer base is likely to defect en masse. Even if you lower your prices to compete, you now have a reputation as having a high price/cost ratio. Customers often dislike that, and express their dislike with their wallets. Since legislative action is part of the big picture (with the hardware thing), popular opinion can matter for that reason, too. >> High price/cost ratios tend to yield unstable long-term >> economic relationships, unless prestige is part of the product. > > True, but I see Intel's response as a way around that problem. They're > offering better feature/price ratios using this approach than the > traditional one. They're only better for the customers who buy the product with the lower price and get the lower intended performance. The customers who pay for more performance get a worse deal. Both parties get the same physical material. Both benefit from the same NRE. But the high-end guys pay more. They end up subsidizing the low-end guys. Sometimes the high-end people don't mind, but sometimes they do. When people propose taxing the rich to give to the poor, the rich tend to put up a pretty big stink, for example. > Frankly, I think that the hardware side of the house has suffered with low > margins as compared to what we let the software side of the house get away > with. I agree completely. But weren't you just making a point about the scope of this discussion? ;-) >>> I think you're arguing a narrower scope of issues than some other people >>> are. > > Yes, I am -- for reasons stated previously. Well, your choice, but don't be surprised when you get persistent confusion/disagreement. One can "win" any argument by carefully defining terms. If mutual understanding is the goal, you need to change minds. :) -- Ben ~ Finally, powerful endpoint security that ISN'T a resource hog! ~ ~ <http://www.sunbeltsoftware.com/Business/VIPRE-Enterprise/> ~ --- To manage subscriptions click here: http://lyris.sunbelt-software.com/read/my_forums/ or send an email to [email protected] with the body: unsubscribe ntsysadmin
