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XM financial trouble
"Jonathan Goodish" wrote in message ... In article , "Matt Barrow" wrote: In sum, in some industries, yes; not so in others. In industries with costly FIXED infrastructure, for example. The bottom line is that new customer acquisition does not cost "next to nothing" for any business. Neither does customer retention. A few years ago, I read an article that analyzed the costs involved in producing an Apple iMac. While the iMac sold for around $1000 at the time, the analysis concluded that Apple was making a windfall profit because parts costs were only around $250. The analysis completely ignored the costs of doing business: marketing, R&D, manufacturing, distribution, etc. In reality, Apple's profit was much smaller on a per-unit basis than the article suggested. Those articles are common, evidently written by "journalists" rather than anyone who's ever run a company. Another similar version is the 50 cents of chemicals it takes to produce major pharmacuticals. Yeah, like they just materialize in the right combination... |
#22
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XM financial trouble
"Matt Barrow" wrote in message ... "Jonathan Goodish" wrote in message ... A few years ago, I read an article that analyzed the costs involved in producing an Apple iMac. While the iMac sold for around $1000 at the time, the analysis concluded that Apple was making a windfall profit because parts costs were only around $250. The analysis completely ignored the costs of doing business: marketing, R&D, manufacturing, distribution, etc. In reality, Apple's profit was much smaller on a per-unit basis than the article suggested. Those articles are common, evidently written by "journalists" rather than anyone who's ever run a company. Another similar version is the 50 cents of chemicals it takes to produce major pharmacuticals. Yeah, like they just materialize in the right combination... I might add that selling to individual customers DIRECTLY is very different than (generally) placing ads and having sales reps wait for calls so they can sign up new customers. |
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