(Topic ID: 145697)

The Big Lebowski


By CoinTaker

4 years ago



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  • 219 posts
  • 87 Pinsiders participating
  • Latest reply 4 years ago by mswhat
  • Topic is favorited by 10 Pinsiders

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#66 4 years ago
Quoted from RTS:

I agree. There's probably many others who feel the same about the $1500 increase.
If say just 100 people turn away from a purchase now, DP loses $850,000 in potential sales rather than earning $150,000 more from the increase.
I think more prospective income is lost than gained at the new price point. I don't think it was a good pricing move.

You may well be correct; however, you are mixing revenue with profit. The $1500 increase is a net increase in the bottom line as opposed to topline revenue. If, for example, the all-in cost were $8450, the lost revenue would be $850,000 while the lost profit would only be $5000. It would only take four sales at the higher price to make up for the lost profit on those 100. To be sure, this is gross oversimplification; however, it is the classic Econ 101 question....if I price my hotdogs at $15, I make $14 profit on each one but only sell two for a $28 profit. If I price them at $1.25, I sell 100 but only make $25 in profit. Somewhere between $1.25 and $15 is the sweet spot.

With respect to this game, there is no doubt that they would sell many, many times more at $5k than $10k, but where is profit maximized? Purely speculating, I would agree that it is south of $10k and if not, you begin to wonder about their costs.

#156 4 years ago

It may have been mentioned already but what was the price increase for purchasers in Europe and Canada?

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