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#1
posted to rec.boats
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Sirius/XM
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#3
posted to rec.boats
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Sirius/XM
On Thu, 17 Aug 2017 01:03:22 -0400, wrote:
That's not always the case Greg. Advertising can simply be to increase market share ... or simply compete for business in the first place. The idea that all business costs are "passed on" to the customer is simply not true. Who pays them? If you are not covering your expenses with your revenue you are on the fast track to bankruptcy court. (or you are the government) === Generally production efficiency goes up with higher production volumes (economy of scale). So if you can grow your top line faster than the bottom, profits increase as does the possibility of decreasing prices. --- This email has been checked for viruses by AVG. http://www.avg.com |
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#4
posted to rec.boats
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Sirius/XM
On Thu, 17 Aug 2017 01:22:18 -0400,
wrote: On Thu, 17 Aug 2017 01:03:22 -0400, wrote: That's not always the case Greg. Advertising can simply be to increase market share ... or simply compete for business in the first place. The idea that all business costs are "passed on" to the customer is simply not true. Who pays them? If you are not covering your expenses with your revenue you are on the fast track to bankruptcy court. (or you are the government) === Generally production efficiency goes up with higher production volumes (economy of scale). So if you can grow your top line faster than the bottom, profits increase as does the possibility of decreasing prices. === Just re-read that and it's worded incorrectly. Should be: So if you can grow your top line faster than the cost of production, profits increase, and raises the possibility of decreasing prices. --- This email has been checked for viruses by AVG. http://www.avg.com |
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#5
posted to rec.boats
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Sirius/XM
On Thu, 17 Aug 2017 01:22:18 -0400,
wrote: On Thu, 17 Aug 2017 01:03:22 -0400, wrote: That's not always the case Greg. Advertising can simply be to increase market share ... or simply compete for business in the first place. The idea that all business costs are "passed on" to the customer is simply not true. Who pays them? If you are not covering your expenses with your revenue you are on the fast track to bankruptcy court. (or you are the government) === Generally production efficiency goes up with higher production volumes (economy of scale). So if you can grow your top line faster than the bottom, profits increase as does the possibility of decreasing prices. That assumes the ads generate enough more volume to bring on the extra volume and that economy of scale but you are still passing on that cost to the customer. The ad fairy is not leaving the extra money under your pillow. In an attempt to drag this back on point, how many times do I need to see/hear this ad before it stops being informative and just becomes a pain in the ass? I wasn't going to buy a magic pillow the first time I saw the ad and I am even less likely to buy one the 100th time I see it. (I feel the same way about politicians who call me on the phone or interrupt my TV show). If ads were so valuable to customers, why is there such a market for "ad free" services like satellite radio, HBO and the various media products like DVDs, streams and MP3s? I am sure Harry could see most of the movies he stores on his server on "free" ad based TV but he chooses to watch them without ads. Maybe that is how he got a legal copy that he could copy freely. He recorded it from broadcast TV with the ads. |
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#6
posted to rec.boats
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Sirius/XM
On 8/17/2017 11:03 AM, wrote:
On Thu, 17 Aug 2017 01:22:18 -0400, wrote: On Thu, 17 Aug 2017 01:03:22 -0400, wrote: That's not always the case Greg. Advertising can simply be to increase market share ... or simply compete for business in the first place. The idea that all business costs are "passed on" to the customer is simply not true. Who pays them? If you are not covering your expenses with your revenue you are on the fast track to bankruptcy court. (or you are the government) === Generally production efficiency goes up with higher production volumes (economy of scale). So if you can grow your top line faster than the bottom, profits increase as does the possibility of decreasing prices. That assumes the ads generate enough more volume to bring on the extra volume and that economy of scale but you are still passing on that cost to the customer. The ad fairy is not leaving the extra money under your pillow. In an attempt to drag this back on point, how many times do I need to see/hear this ad before it stops being informative and just becomes a pain in the ass? I wasn't going to buy a magic pillow the first time I saw the ad and I am even less likely to buy one the 100th time I see it. (I feel the same way about politicians who call me on the phone or interrupt my TV show). If ads were so valuable to customers, why is there such a market for "ad free" services like satellite radio, HBO and the various media products like DVDs, streams and MP3s? I am sure Harry could see most of the movies he stores on his server on "free" ad based TV but he chooses to watch them without ads. Maybe that is how he got a legal copy that he could copy freely. He recorded it from broadcast TV with the ads. Those "magic pillows" are pretty good. I bought one to try out at Bed, Bath and Beyond. I like it. |
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#7
posted to rec.boats
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Sirius/XM
On Thursday, August 17, 2017 at 1:22:23 AM UTC-4, wrote:
On Thu, 17 Aug 2017 01:03:22 -0400, wrote: That's not always the case Greg. Advertising can simply be to increase market share ... or simply compete for business in the first place. The idea that all business costs are "passed on" to the customer is simply not true. Who pays them? If you are not covering your expenses with your revenue you are on the fast track to bankruptcy court. (or you are the government) === Generally production efficiency goes up with higher production volumes (economy of scale). So if you can grow your top line faster than the bottom, profits increase as does the possibility of decreasing prices. While I certainly understand your point, I believe there are few examples of the price of an in-demand product's price being reduced. If a company creates a product and it takes off in the market (higher production volumes), that means it's selling well at the current price point and there would be no reason to reduce price (profit). About the only thing that would drive that would be a competitor who takes market share away from you based on lower price or better quality/value. |
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#8
posted to rec.boats
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Sirius/XM
On Thu, 17 Aug 2017 08:29:54 -0700 (PDT), Its Me
wrote: On Thursday, August 17, 2017 at 1:22:23 AM UTC-4, wrote: On Thu, 17 Aug 2017 01:03:22 -0400, wrote: That's not always the case Greg. Advertising can simply be to increase market share ... or simply compete for business in the first place. The idea that all business costs are "passed on" to the customer is simply not true. Who pays them? If you are not covering your expenses with your revenue you are on the fast track to bankruptcy court. (or you are the government) === Generally production efficiency goes up with higher production volumes (economy of scale). So if you can grow your top line faster than the bottom, profits increase as does the possibility of decreasing prices. While I certainly understand your point, I believe there are few examples of the price of an in-demand product's price being reduced. If a company creates a product and it takes off in the market (higher production volumes), that means it's selling well at the current price point and there would be no reason to reduce price (profit). About the only thing that would drive that would be a competitor who takes market share away from you based on lower price or better quality/value. There is no better example of that than the highly advertised drugs. The only time the price goes down is after patents expire and there is a generic ... that is not advertised at all. They still continue with the ads and those branded drugs continue to be priced much higher than the generic, even though they are chemically identical. Now let's see Harry defend the drug companies ;-) |
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#9
posted to rec.boats
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Sirius/XM
On 8/17/2017 1:03 AM, wrote:
On Wed, 16 Aug 2017 21:49:09 -0400, "Mr. Luddite" wrote: On 8/16/2017 9:02 PM, wrote: On Wed, 16 Aug 2017 15:34:43 -0400, Keyser Soze wrote: What part is wrong? BTW that is not a libertarian issue at all but I know it is your go to brain fart Your belief that advertising does not lower prices for products and services. How does that work? I add a large line to my expense column and somehow I can lower prices and still make a profit. It is clear you never actually looked at a P&L statement or owned a business. Ads may generate more business but it is still a cost of doing business that gets passed on to the customer. That's not always the case Greg. Advertising can simply be to increase market share ... or simply compete for business in the first place. The idea that all business costs are "passed on" to the customer is simply not true. Who pays them? If you are not covering your expenses with your revenue you are on the fast track to bankruptcy court. (or you are the government) If you are profitable with your existing business, some of those profits can be re-invested in advertising to increase your market share. In some businesses margins may have to be cut simply to get a contract to begin with. Yes, if you can't cover your overall cost of doing business long term you will eventually go bankrupt but the point I am making is that costs are not necessary "passed on" to the customer as you keep repeating. It depends on the type of business. If I had tried to increase my margins in order to pay for start up costs, advertising and other non-direct expenses, the number of contracts I received would have suffered. It's called competition and in my business it was primarily evaluated on technical responsiveness to the RFQ, price and delivery schedule. In time reputation also became a major factor. In the early days I took some contracts at break-even just to get the company recognized, "in the door" and eligible for future contracts. I didn't always break even either. One hick-up in the project and I'd lose money. You have to have a long-term plan and goal although I don't believe in formal one or five year "business plans". They are for investors, not the business owner or person who is actually running the company. I never borrowed money or even had a bank line. I learned that lesson from watching another person try to build a company using "other people's money". He ended up in bankruptcy and investors and vendors got hurt. All growth in my company was organic with the exception of one person who wanted "in" badly and bought himself a 10 percent equity position. He was a tremendous asset, holding two Phd's in physics and helped get the company a lot of exposure. Otherwise, I relied on technical competence, delivering what was promised and earning repeat business. Growth, margins and the rest took care of themselves. I've often thought about businesses and what I believe to be some of the mistakes people make. My experience isn't typical, for sure, and it was not the management of a fully mature, on-going, typical business where the scorecard are the P&L statements or quarterly returns. If I made some money on a project I invested it into the company's growth. I never paid myself a big fat salary. My goal was always to create something of eventual value to someone else and it paid off. |
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#10
posted to rec.boats
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Sirius/XM
On Thu, 17 Aug 2017 07:00:06 -0400, "Mr. Luddite"
wrote: On 8/17/2017 1:03 AM, wrote: On Wed, 16 Aug 2017 21:49:09 -0400, "Mr. Luddite" wrote: On 8/16/2017 9:02 PM, wrote: On Wed, 16 Aug 2017 15:34:43 -0400, Keyser Soze wrote: What part is wrong? BTW that is not a libertarian issue at all but I know it is your go to brain fart Your belief that advertising does not lower prices for products and services. How does that work? I add a large line to my expense column and somehow I can lower prices and still make a profit. It is clear you never actually looked at a P&L statement or owned a business. Ads may generate more business but it is still a cost of doing business that gets passed on to the customer. That's not always the case Greg. Advertising can simply be to increase market share ... or simply compete for business in the first place. The idea that all business costs are "passed on" to the customer is simply not true. Who pays them? If you are not covering your expenses with your revenue you are on the fast track to bankruptcy court. (or you are the government) If you are profitable with your existing business, some of those profits can be re-invested in advertising to increase your market share. In some businesses margins may have to be cut simply to get a contract to begin with. Yes, if you can't cover your overall cost of doing business long term you will eventually go bankrupt but the point I am making is that costs are not necessary "passed on" to the customer as you keep repeating. It depends on the type of business. If I had tried to increase my margins in order to pay for start up costs, advertising and other non-direct expenses, the number of contracts I received would have suffered. It's called competition and in my business it was primarily evaluated on technical responsiveness to the RFQ, price and delivery schedule. In time reputation also became a major factor. In the early days I took some contracts at break-even just to get the company recognized, "in the door" and eligible for future contracts. I didn't always break even either. One hick-up in the project and I'd lose money. You have to have a long-term plan and goal although I don't believe in formal one or five year "business plans". They are for investors, not the business owner or person who is actually running the company. I never borrowed money or even had a bank line. I learned that lesson from watching another person try to build a company using "other people's money". He ended up in bankruptcy and investors and vendors got hurt. All growth in my company was organic with the exception of one person who wanted "in" badly and bought himself a 10 percent equity position. He was a tremendous asset, holding two Phd's in physics and helped get the company a lot of exposure. Otherwise, I relied on technical competence, delivering what was promised and earning repeat business. Growth, margins and the rest took care of themselves. I've often thought about businesses and what I believe to be some of the mistakes people make. My experience isn't typical, for sure, and it was not the management of a fully mature, on-going, typical business where the scorecard are the P&L statements or quarterly returns. If I made some money on a project I invested it into the company's growth. I never paid myself a big fat salary. My goal was always to create something of eventual value to someone else and it paid off. Eventually all of that cost was passed on to the customer. You just had enough "bank" to eat it during your start up. |
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