Quote:
Originally Posted by DaleDe
Well, if you lose a $1 a unit won't you make it up with volume?
Dale
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If you lose $1 per unit sold,
- when you sell 100 units, you will lose 100$.
- when you sell 10000 units, you will lose 10000$.
As long as you sell below cost, selling more (volume) will harm you more.
Firms have no reason to sell below cost unless they can get money from somewhere else. For Amazon, if they want, they can sell Kindle below cost since they can make up the loss by selling books. However, Astak is in a quite different situation from Amazon. Since Astak is going to support mobipocket or ereader, Astak will not get any money once a unit is sold. Only book sellers (mobipocket, ereader, booksonboards, baen, fitionwise, ...) will make money. So Astak has no reason to sell below cost.
My point is that selling below cost is not good regardless of sales volume. Actually, it will get worse with increased sales. Of course, whether selling at $350 is below cost is an open question.
