That's funny. I have had this argument for years with people I've worked for. I am a firm believer in testing price elasticity. My profession has, typically, been engaging in inventory control and pricing. As a result, I am constantly called upon to ask the question, "would you rather sell 300 units at $10,000 or 3,000 units at $5,000?" Immediate reaction (typically) is the $10,000 rate is preferable because the "margin" is so high.
HAHAHAHAHAHAHA.
It really is laughable. I watched one company (literally) turn down $20 million in business because the price the buyers offered was "too low". Meanwhile, only 45% of the inventory (which was time sensitive, and therefore represented lost revenue opportunity) was sold to buyers who paid an "acceptable price"!
Look, if "high margin" businesses are the only ones to be in, then WalMart and KMart wouldn't exist. |
