I am sorry to cause you pain, but you are incorrect. I am a business owner, and have a business degree. That aside in the context of CK headsets there is not a clamoring in the marketplace for them. They are not newly released playstation 3's or some such. Sure I could start a business making headsets, and decide to sell them for $1,000.00. It would not be a decent model would it? You guys are making it out like CK is lining his pockets with $100 bills because he has duped everyone into buying his headsets. I am pretty sure that CK is running a fairly small business. He charges the amount he needs for it to be financially feasible. The wholsale costs on those are likely $50.00 or less. The majority of bikes these day use intergrated headsets, so the volume is pretty small. Do you think he can sell them wholesale for $15.00 each and make a profit? I doubt it, and if it is a profit it would likely be so small it would not be worth it. Remember he has overhead, CNC Machines, not cheap, labor, health insurance, workers comp, rent lights, payroll taxes, income tax, and on and on. That $100.00 get dwindled down very quickly.
Richard
Originally Posted by iab
Actually, Psimet is correct (except possibly the price=quality religion stuff) and it is painfully obvious you have never taken a business course. Price has nothing to do with cost. If I may quote someone, "The purpose of price is not to recover cost but to capture the value of the product in the mind of the customer."
Pricing is ALL marketing. The examples you sited, low volume/high margin and high volume/low margin are only two of the countless pricing strategies a company can use. I am also lazy and don't want to go into all of the reasons you are wrong other than to suggest you go to Borders, get a remedial book on marketing like The Portable MBA by Schewe and Hiam and read the chapter about the different pricing opportunities companies can utilize.