Quote:
Originally Posted by jamato8 /img/forum/go_quote.gif
but I see no reason for the huge mark-up when they were making a profit at half the price of the rest of the world.
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(I can see it's a troll, but I'm waiting for something at work; so I'll bite
)
Well it goes without saying, they're going to make more money with a huge markup over a non-huge one - provided of course demand doesn't fall too much with the increased price. When running a business, making a profit is not enough - you have to make the
maximum profit and at the very least (significantly) more than your competitors to stay around. If you sell your product for any less than the absolute most your customers will pay, you're not running your business properly and you're neglecting your responsibility to your shareholders.
See-also: marginal cost pricing (a-la Microsoft Windows/Office pricing model) this explains why the exact same item has a different retail price in different markets (and indeed to different people in the case of MS pricing) - they simply wouldn't sell any at all if they sold for the same price as in western markets, and at least in this case; selling
some at a much lower markup, is better than selling
none at a much lower markup
.
(it's
most ceratinly not a case of applying old-school cost-plus pricing, a bit extra for international shipping, and then slapping on a random let's-be-really-unfair surcharge for those outside China, as many people seem to think when they see these kind of price differences!
)