Hacker News Reader

Comment by hbt | Hacker News Reader

There is a name for that: price gouging.

Maybe you can justify selling an ebook for 800$ because when using it the customer will recover their investment.

What if your hospital/doctor/insurance starts doing that? After all, wouldn't be a good investment to not be DEAD or suffering? Wouldn't you give them a shit load of money for all that value they created for you?

It's a bullshit justification for milking people out of their money.

I prefer the Amazon/walmart approach. Commoditize aggressively and keep the competition away by having low profit margins. Make your money off volume instead of gouging a small pool of customers.

The same applies to this Hollywood crap. They are price gouging with licensing deals, geo-location restrictions, delayed releases etc. Then wonder why aren't enough people willing to pay us what we ask them to? Fuck off.

View on HN

>I prefer the Amazon/walmart approach. Commoditize aggressively and keep the competition away by having low profit margins.

Yes, and pay everyone in between absolute peanuts. Enjoy your sitcoms farmed out to overworked Amazon Turk writers.

Amazon can get away with it because buying a book on Amazon is the same as buying one on Barnes and Nobles. Good content however costs money, and decent writers won't work for the same wages as Amazon warehouse workers.

Your argument applies well to commodities. Today there are so many commodity products that we're almost drowning in them. Amazon, Walmart, Costco, and others have risen because they are optimized to take advantage of commodities.

Your argument does not apply to new products and services. Let's say you've written a new AI-driven CRM product that maintains customer contact automatically without being overbearing. How do you price it? There's a lot of risk because it's never been done before and you don't know how easy it is for other companies to copy you. You need to build in a margin that allows you to fund not only your current staff but also future improvements.

So, in short, it's important to know whether your product or service is a commodity (or whether commodities compete with your product). It deeply impacts the way you develop your pricing.

> There is a name for that: price gouging.

No, it's called value-based pricing. Price gouging is raising prices beyond what is reasonable. For almost all products and services charging a percentage of the value that the product or service creates is completely reasonable.

> What if your hospital/doctor/insurance starts doing that?

Sometimes it's quite difficult or impossible to calculate the value created by a product or service and in those instances attempting value-based pricing could lead to price gouging.

Reply on news.ycombinator.com