But, I wasn't comparing practice and theory. If the rich person was wise, they'd find what they wanted, exactly, to not get taken advantage of. But, you can't deny the possibility that, perhaps, a 10% increase isn't ALL that more than they are willing to pay. Some people don't mind paying more, especially with manual labor. That usually yields a better job than under-balling the quote or searching for the cheapest of the cheapest.
Back to the charging aspect. That's why I said you charge what you "think you can get". That may or may not mean a one time deal. I've grown up around general contractors, and saw all how the bidding process works. I've been to upscale houses, and I've been to 2 room 1 baths. It's not at all unusual for me to see some unscrupulous individual to try and charge more because they know the guy can pay it. And I've seen them come back time and time again, doing more jobs.
But, I'm taking the topic away from the point, and I've already stated my view.
In the end free market will decide who is right or wrong. And karma will always come around. If a business is charging people more based solely on their income, and the customer finds out, how do you think they will feel? Especially if their are cheaper options out there.
Is not wrong, nor right, its circumstantial, think that if your business is located in the expensive zone, you are saving them time and money by not having to drive to the other areas for the service, plus you are paying rent in an expensive area, so everybody is even, stupid would be if you are charging twice as more for the same thing as the guy next store, you would lose costumers. What is wrong is to lie and say you are charging cheap, which is what many ppl say sadly..
And believe this or not, but there are ppl that wont like a service if is cheap, some ppl think cheap means bad quality
Last edited by Daimon; 2013-01-15 at 05:35 AM.
"The difference between stupidity and genius is that genius has its limits."
It's done every single day in this country by every single corporation.
Two people make the exact same amount of money per year, have the exact same amount of debt/payouts:
Guy with a 590 credit score gets a credit card - 18% interest, he goes and gets a bank loan for a 2012 honda accord - 11% interest. He gets a home loan - 11% interest.
Guy with a 760 credit score gets a credit card - 6% interest, he goes and gets a bank loan for a 2012 honda accord - 4.5% interest. He gets a home loan for the exact same house - 2.7% interest.
There's an assumed amount of risk with each one without knowing the individual story, but it's the same exact thing as the op's question. If you think it's not, wait until you get out of econ 101 then come back.
Apply blizzards model to any other subscription service,you'd be outraged:
Netflix adds no new movies for a year, you click a new movie, there's a $5 fee.
You're in an accident, click your onstar button, but there's an addition $20 fee for them to help.
You turn on your tv only to find all you get are the infomercial channels. Every other show is pay per view.
See how dumb that model is?
Dynamic pricing is not something new. Amazon got busted a while ago charging repeat customers more than new sign ups a while back, basically cashing in on loyalty. There are many other methods like geographic pricing models which will sell their products to poorer countries for less to maximise profits. I seem to recall an example of books being sold in Canada for less than in the US. Don't expect people to be happy when they find out what you are up to is all I will say.
edit: by busted I mean people got wise to their act and it was more a public humiliation, not illegal.
In Denmark you in general get overall better deals if you are rich. Primarily due to the way banking works.
The prices seem overall the same everywhere, except some brands are of cause more expensive than others. Its not like you can go to a ghetto like area and expect lower prices than the wealthiest neighborhoods if you look at a simple kiosk or something like it. And a Big Mac costs the same everywhere.
It depends on what type of service. If it's a difference of $50 a week and they know you do a good job then a lot of them wouldn't care. If there difference is in the thousands then you'll have problems IMO.
If you're a tradesman it can definitely pay to get your foot in the door with rich people by giving an honest price & good service/workmanship. My dad is a builder/joiner, did a job for a upper-middle class fella (not crazy rich, just well off), which in turn got him recommended to others etc., which in turn got him marked as a preferred tender for work on a private school (even ahead of people with a lower price), which in turn exposed him to teachers/parents there and got more work beyond that. By always giving a fair price & doing a good job he has a stream of customers coming back to him and it's rare that he isn't booked out 3 months in advance, even during the lowest point of the recent economic downturn.
Pretty good for a man in his 60's charging $55/hour ($50-60 is normal), in the city with the highest unemployment in Australia. On top of that a number of them give generous tips, and for a few years running now he's even been getting Christmas presents from customers.
On the other side I have a friend who is a doctor and was talking about this same thing, how doctors in upmarket private hospitals will often charge 2-5x as much for the same procedure and the patients actually feel better about paying more because in their minds more dollars = better doctor.
Ethically I'd say it's dubious at best, and depending on the field you can yourself in the long run by having less repeat customers.
Now, for the econ 101 thing, I'm guessing you're alluding to the practice of price discrimination. Which is a completely fair and legitimate practice. But not the way you're presenting it. A good example of price discrimination is Microsoft's operating systems. Microsoft has one price for businesses, one price for schools, and one price for individuals. Now, each of those can pay more for a premium service (like windows 7 ultimate), but at no point does Microsoft sell it to them based on income. That, while not illegal, would certainly be bordering on unethical. And pointlessly difficult to implement, in many cases.
On top of that, you can only do what the OP is describing for services. If you try to price discriminate with a product, you'll find people reselling your product, and your high-end customers will just buy from your low-end customers instead of you.
I read a sign somewhere that sums it up pretty nicly
We do 3 types of work here
You can choose any 2
Cheap/quick = wont be good
Good/cheap = wont be quick
Good/quick = wont be cheap
The wealthy normally go for #1 or #3 as they value their time moreso than most others.
Last edited by skrump; 2013-01-15 at 05:36 AM.
Not in the least.
During disasters, prices of hotels go up, despite people being in need.
this is a fundamental aspect of free markets, never mind that for example living in Downtown Vancouver CHEAP rent for a small building can easily be around 1600$, Going about 8 KM east that price drops to 700$.
Certainly nothing wrong with that, you charge as much as you can without losing business. Why shouldn't you?
If I can't charge more then 100 from person A because they are poor then thats what I will charge, if person B can pay 300 then thats what I would charge him.
Redicules notion that you need to charge the same for everyone.
Last edited by Jackmoves; 2013-01-15 at 09:18 AM.
The nerve is called the "nerve of awareness". You cant dissect it. Its a current that runs up the center of your spine. I dont know if any of you have sat down, crossed your legs, smoked DMT, and watch what happens... but what happens to me is this big thing goes RRRRRRRRRAAAAAWWW! up my spine and flashes in my brain... well apparently thats whats going to happen if I do this stuff...
Living in a free market I would say that this is implied.
Synek - best rogue in the world