http://www.rajeshsetty.com/2006/09/19/paying-the-right-price/ Entrepreneur. Author. Speaker & Alchemist Sun, 13 May 2012 04:56:38 +0000 hourly 1 http://wordpress.org/?v=3.3.2 http://www.rajeshsetty.com/2006/09/19/paying-the-right-price/comment-page-1/#comment-773 Anonymous Thu, 05 Oct 2006 16:23:00 +0000 http://www.blog.lifebeyondcode.com/2006/09/19/paying-the-right-price/#comment-773 It's a bit more complicated. On the one hand, you have the customer which perceives an individual benefit from the book. On the other hand, you have the publisher. The publisher has got fixed costs (paying the author, marketing, staff, ...) and variable costs (printing, delivering, ...). So, the per unit cost (and thus the price) depends on the amount of books that can be sold. The customer has (as mentioned) an individual benefit. When you lower the prices, you can reach more customers and spread your fixed costs. Furthermore, the benefit for a customer which perceives more value than another, increases. So, pricing is ultimately about finding a good trade-off between costs for the seller and worth for the buyer. If you can take more money from one customer than from another, this is called discrimination (no in a negative meaning). This is what you support, when you give them extra money. However, you are lowering your own benefit. Nevertheless, I like your buy-and-giveaway idea :-) It’s a bit more complicated. On the one hand, you have the customer which perceives an individual benefit from the book. On the other hand, you have the publisher.
The publisher has got fixed costs (paying the author, marketing, staff, …) and variable costs (printing, delivering, …). So, the per unit cost (and thus the price) depends on the amount of books that can be sold.
The customer has (as mentioned) an individual benefit. When you lower the prices, you can reach more customers and spread your fixed costs. Furthermore, the benefit for a customer which perceives more value than another, increases.
So, pricing is ultimately about finding a good trade-off between costs for the seller and worth for the buyer.
If you can take more money from one customer than from another, this is called discrimination (no in a negative meaning). This is what you support, when you give them extra money. However, you are lowering your own benefit. Nevertheless, I like your buy-and-giveaway idea

]]> http://www.rajeshsetty.com/2006/09/19/paying-the-right-price/comment-page-1/#comment-772 Anonymous Wed, 20 Sep 2006 14:07:00 +0000 http://www.blog.lifebeyondcode.com/2006/09/19/paying-the-right-price/#comment-772 Thanks Sudaakeran. This is where it gets tricky. Same book. Different value extraction based on individuals. That is the way it works. Each person can get different value out of the same book. Hence a different price. Only the person can determine the price. Nobody else :) Best, Raj Thanks Sudaakeran.
This is where it gets tricky. Same book. Different value extraction based on individuals. That is the way it works. Each person can get different value out of the same book. Hence a different price.
Only the person can determine the price. Nobody else
Best,
Raj

]]> http://www.rajeshsetty.com/2006/09/19/paying-the-right-price/comment-page-1/#comment-771 Anonymous Wed, 20 Sep 2006 12:01:00 +0000 http://www.blog.lifebeyondcode.com/2006/09/19/paying-the-right-price/#comment-771 Thinking aloud: But how do we come with the right price? We could probably consider it as the right price is relative and subjective based on the individual. Thinking aloud: But how do we come with the right price? We could probably consider it as the right price is relative and subjective based on the individual.

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