Tulex
Solar Wizard
Your numbers don't really add up. Yes, you do get more profit, but not that extreme.They are a publicly traded company...I'd guess the investors looked at their debt (we're talking north of $40,000,000) they said "oh we need more profit, go raise the prices".
In my opinion that's a good way to run a company into the ground.
In business there are two ways to bring profit. If your customers are willing to pay higher prices, you can increase prices thereby profit margin...but that's not this market whatsoever. You can make more money lowering your prices and running higher volume.
If you get 30% of 10 order for $1000 you have $3000.
If you get 20% of 50 orders for $800 you have $8000.
If your competition is selling for $850 and everyone knows it, chances are you may not have even those 10 orders...but if you stay competitive, you can win more customers over.
Part of something is always better than all of nothing.
In your first example, your cost for the item is $700. That doesn't change, unless you are factoring in your buying power with volume.
For the second example then, either your % or order $ has to change. For the same item, you would be getting 12.5% for an $800 sell for $5000, not $8000, or you would have to sell 50 at $860 to get $8000.
Yes, I get your point, just saying.
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