Support costs? What...you mean that all my nieces, nephews, cousins, uncles
and aunts that I have locked up in the shed....errr, "factory"......down the
back-yard will cost me more?
***!
> Congratulations Art! You've just doubled your support costs
> (labor,etc.)without doubling your gross profit, you lose. Within the
limits
> of our little scenario the space between $100,000 and about $350,000 is a
> "no mans land" where about 99% of the people who make the decision you
just
> made will end up. Not to mention the impact of the added stress on
> yourself.
> > G'day. My name is Art Vanderlay and you won't believe this but I just
> happen
> > to be a small businessman and my business sells $100,000 in widgets
> monthly.
> > I hold a 20% gross margin which nets me $5,000 monthly and I'm gonna cut
> my
> > margin down to 10%.
> > Why would I do that?
> > So that I can triple....yes, TRIPLE, my sales.
> > BK
> > > > >Ok, maybe $1000 is a bit strong but you get the point, right? At
$50
> > for
> > > a
> > > > >good sim we are basically ripping the publisher off if you consider
> > price
> > > > >vs. entertainment hours when compared against the cost of other
> > > > >entertainment available to us. Don't tell them though ;-)
> > > > If it's a good sim (meaning, it's great, little to no bugs, etc.),
> > > > another way to look at it is, sell the sim cheaper. Lower price
> > > > usually sells more product.
> > > Lower price does sell more product, true. But at what point does the
> > > infrastructure cost to support the volume of sales at lower margins
> become
> > > so overwhelming that profitability is gone?
> > > Let's say you're a small businessman and your business sells $100,000
in
> > > widgets monthly, you hold a 20% gross margin which nets you $5,000
> > monthly.
> > > Let's say if you cut your margin down to 10% you could double your
> sales.
> > > Would you do that? I sincerely hope not. But that school of thought
> > seems
> > > to be prevalent in today's world.
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