The boy is right - cost is not a basis for pricing in a competitive
marketplace. Knowing and controlling costs is a requirement to make a
profit and stay in business over the long run, but is definately not a
factor in setting price in a free market.

jim


"Swingman" wrote in message
news "Todd Fatheree" wrote in message

I never said you shouldn't know your costs.

You might not have meant it like it reads, but you clearly said price should
not be a _basis_ for cost, and that is simply not true:

I can tell you that the whole concept of pricing your product based on
your costs is wrong.

You ALWAYS use "cost as a basis for price" in some manner, if you want to
stay in business that is.

AAMOF, "basis" is the operative word here. You had better know PRECISELY how
much your widget cost to get to market before you set a price and that _is_
using cost as a "starting point" and "basis" for price. If your widget cost
you .50 cents in materials, labor and overhead to market, you damn well
better not plan on selling that widget for .50 cents or less if you want to
be profitable. After that point a myriad of other economic pricing factors
come into play, just a couple being "what the market will bear",
competition, and economy of scale.

The market doesn't give a damn about how much your costs are, so there
isn't any point
in using that as a starting point to arrive at price.

Don't give up your day job.

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Last update: 11/06/04