On Thu, 2007-04-19 at 18:36 +1000, Howard Lowndes wrote: > > Robert Collins wrote: > > On Thu, 2007-04-19 at 17:52 +1000, David Ward wrote: > > > >> Thanks Amos. This is something I have thought of and mentioned to > >> some > >> of the sales stuff. Their instant reaction is that if there's no > >> money > >> in Linux why bother selling it? > >> > >> They sell MS software and make margin on it. So can understand what > >> they are saying but dont agree with them. > >> > >> I am definately not a sales person :)
Case 1 System - cost = $500 sell for $700 Windows - cost = $250 sell for $300 Customer pays $1000 Gross Profit = $250 Commission = $100 Company Profit = $150 Case 2 System - cost = $500 sell for $850 Linux - cost = $0 sell for $0 Customer pays $850 and saves $150 (easier to sell when your product is cheaper, so hopefully sell more units as well) Gross Profit = $350 Commission = $150 Company Profit = $200 So the end result is that the customer has saved $150 per unit and has a more stable and secure system, The salesmen has a product he can sell for less than his competitors and still makes $50 more per unit in commissions. The company owner has increased his/her profit by $50 per unit. And as a previous email suggested, the remaining funds that would have been used up can again go to the company when they UPSELL, would you like fries with that? ... umm. ... I mean, support contract, extra hardware, extended hardware warranty etc etc. For the salesman who wants to know the point of selling something that is free, the simple answer is higher commissions, due to bigger margins, the ability to upsell and having a more cost effective and therefore attractive product to sell. Free equals more money (At least, that is the point you should be trying to make to those money hungry soulless creatures called sales staff). Why did Sun opensource Java ? Because making it free meant bigger profits. The salesmens little minds may struggle with this a bit, but that is a great example of making software free, so as to build your revenue. My 2c Tuxta -- SLUG - Sydney Linux User's Group Mailing List - http://slug.org.au/ Subscription info and FAQs: http://slug.org.au/faq/mailinglists.html
