Reply by crank49

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Posted on Baileigh equip vs competitor equip

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4030 posts in 2965 days

#1 posted 07-17-2013 05:55 PM

Interesting question.
Not just here and wood working, but almost everything any of us purchase has a perceived value to the purchaser.The question of how to control this perceived value has always intrigued me.

If Baileigh wants to market themselves as producers of top quality machines, they will shoot themselves in the foot by pricing their product too low. On the other hand, if they price too high they will not sell enough product to get any market share. All this is a real problem for marketing any product.

I sell a product in my store for $40 that I pay $20 for. The product has very little intrinsic value, it’s mostly glass. It is a very exclusive product, designed and produced by artists in Europe, promoted and marketed aggressively by the producer, ads in major magazines, controlled pricing, etc. . I could have a similar product made in China for $0.50, Some discount stores are starting to get cheaply made Chinese product and sell it at about the same price as my cost for the real thing. Now, I buy for 20, sell for 40, that’s 100% markup. They buy for .50, sell for 20, that’s 2000% markup. Is my product 200 times better than the cheap knockoff Chinese product? Not really.

I think this has happened across the entire retail spectrum. Don’t know if there is a solution. But, it is at the core of why good quality, affordable tools are not made in this country any more. The only market left for quality products expects to see a high price.

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