The term profit, and how differently businesses and individuals view it can be quite amusing. Most generally agree that they don’t want to give another any more profit than they absolutely have to, while on the other hand they want every dime they can get for their own profit.
The basics of business state that in order to be successful, one must realize a profit with the business they are conducting. Pure and simple, you must be able to sell your product or service for more than what it costs you to provide it, to be able to stay in business.
It’s no secret that everyone loves a bargain. And, I can’t think of anyone who loves a great bargain more than I do!
But, there is a fine line between getting the lowest price and receiving the highest quality for the amount you invest. I have never been a big fan of “the most bang for your buck” analogy. Generally when one is attempting to sell me on a product or idea based on it being “the most bang for my buck” concept, I quickly lose interest.
I am a firm believer that you get what you pay for. While there are exceptions to every rule, I have found that, in most cases, accepting something on a quantity verses quality basis generally makes for a disappointing experience.
While I may enjoy the immediate gratification of the extra features of a particular item, after the new wears off I almost always end up regretting my decision. Sometimes, I am fortunate enough to be able to return the product and upgrade to the higher quality product, while other times I am stuck with the choice I made.
This is why there shouldn’t be so much emphases placed on profit margins, or more specifically, not wanting to pay too much for an item, just because of the name brand. If the item has a great reputation and track record, who cares if they make a 5% profit or a 500% profit!
I can understand not wanting to pay more for something than what someone else may sell the exact same thing for. I am known for shopping the market before I make a purchase. That’s just good sense.
What I will not do is purchase something from an unreputable business, simply because they had the lowest price. Why? Because they likely won’t be around to take care of me should I need service assistance. Or, worse yet, even if they are still around, they probably wouldn’t take care of me any way! I imagine that’s how they became unreputable to begin with!!
The business who is selling the product, has no problem justifying why a reasonable profit margin should be obtained. The consumer, on the other hand, generally has no problem with trying to give the seller as little a profit as possible.
Now, here’s the kicker. The business and the consumer often times are the exact person! They are just on different sides of the buying and selling process!
Don’t you find it just a bit contradictory that person in business selling a product won’t budge off their 35% gross profit margin can be the exact same person who absolutely refuses to pay over a 20% profit margin to someone else? This is where it gets dicey.
Now you have businesses starting out at 50% plus profit, in hopes of maintaining their 35% margin. At the same time, you also now have the consumer who starts out offering a 10% or less profit in hopes of achieving their not paying too much idea. It just becomes a vicious cycle.
I challenge everyone to remember that the same philosophy should apply when you are purchasing a product or service as it does when you are selling a product or service. If everyone would just level the playing field, then all would come out ahead. The seller would be able to stay in business to service their customers, and the consumer wouldn’t have to worry about paying more than someone else.