"You are making the assumption that offering discounts CUTS BACK on revenue, that's completely absurd.
10 bikes at 200 bucks a pop: 2000
40 bikes at 100 bucks a pop: 4000
Business 101"
Originally Posted by
DrPete
Assuming that dropping the price of a $3000 bike by a hundred bucks will quadruple your sales is probably a fallacy that doesn't get covered till Business 102, then.
He is also neglecting the fact that it costs more to move 40 bikes than it does 10 bikes.
A great example are the souvenir stands at the ballpark. They charge very high prices and certainly could sell more T-shirts if they lowered the prices. Of course, then they would need more than just two people running the stand. And they would need more people/time to haul all of that increased inventory to the stand.
All I'm saying is that there is a balance point where more volume at lower prices does not equal more profit.