Quote:
Originally Posted by ApK
|
An interesting read and it certainly doesn't contradict my point. When you offer discounts you are engaging in a race to the bottom in terms of price. As that article says at the end, when you are buying the business of customers that aren't profitable, what's the point.
There are plenty of people who are willing to pay a premium for what they perceive to be premium products and service. There are lots of phones that are cheaper than the iPhone, but Apple has a great business model and they are playing for profit, not market share. They have about 15% of the smartphone market by volume but make about 66% of all the profits. Zappos is another company that I happily pay full list to because I know I will get great service.
Discounts are a fools game and undermines credibility. Take Kohl's as an example. Slap a price on a product that is double what you ever expect to sell it for, and then offer 50% off. In the mean time if someone is crazy enough to pay full price then more fool them.