Havent seen that theory before, its kinda interesting, but I have a few problems with it.
Now where does marketing fit in that? Market poorly and you will not reach the potential market. Market aggresively and you will sell the total market and a little extra. I can see its application to info products, but then you move on to widgets. Lets call the widget coca cola.
A litre of coke can cost from say $1 in the supermarket to $10+ in nightclub. The supermarket will move huge volumes at low cost, and low profit, while the nightclub will move low volumes at high overhead and high profit. Take an almost identical widget, say Pepsi, and the numbers you get out the end will be radically different.
Other factors that need to be considered are:
Cost of goods
overhead
supply chain costs
product perception
competition
costs of future service
and a whole raft of others.
> Ben Suarez and reveal in 7 Steps to
> Freedom...

> The total amount of money to be made from a
> project is pretty well set. Changing the
> price does not change the total money
> made... only the number of customers who
> will buy.

> For instance: Sell a widget for $10 and you
> might get 1,000 sales - a total of $10,000.
> Sell that widget for $20 and you will only
> get 500 sales - a total of $10,000. Sell
> that widget for $5 and you will get 2,000
> sales - a total of $10,000.

> That being the case, you need to then weigh
> in your marketing costs to get each customer
> and wat you figure to be each customer's
> life time value. If you can afford to get
> more customers at the cheaper sale price,
> then it might pay you to do so because you
> will have more customers to sell stuff to
> later on.

> It really depends on how many customers you
> want to deal with. Pick that. How much you
> want to make. Divide the two together to get
> your sale price.

> Michael Ross




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