I was looking to buy this productivity tool and there were quite a few different versions to choose from. The main difference that was immediately noticeable is how certain ones were targeting business users and the other ones were targeting average consumers. As well, there was a major difference in the prices as the business editions were literally 50% more expensive.

After cross comparing the features it seemed like it would make more sense financially to get the consumer editions as for the most parts the products were almost the same. It was almost like comparing a box of cereal where inside it is the same except to cater to adults one of them mentions that the product has a small amount of additional nutritional stuff. Like in those cases it would hardly be worth paying an additional 50% for.

Even for things like word processors you can usually do the same with the consumer editions as I know say most self employed people don’t ever require the features that business versions offer. In those cases too it’s usually way more expensive to buy the business versions. I suppose many times company’s assume that if you run a business then you will be willing to pay a premium of sorts even for the most minor things. May as well do your homework and save some money if you can do okay with non business editions I’d say.

I noticed that in one particular store they have recently begun to sell used entertainment products such as movies and video games. Nothing really new as many have done it before. The interesting thing is that they actually go to the extra mile to repackage the product as if it was brand new from the outside. So on the surface level it actually looks like you are buying a new product.

This made a lot of people more confident to buy the used products from this company as opposed to the others. On the other hand, I was thinking how so many people could accidentally buy a used product thinking that it was brand new because of it as the only label to indicate that it is a secondhand product is on the shelf.

This makes me wonder if you could increase the value of like a garage sale by giving your items some nice packaging and all. For a lot of the more expensive items I often keep the packages encase I intend to sell it as most people seem to feel that the value is greater if you still have it. Doesn’t really make too much sense when you think about it as it should be all about the actual item. But if it increases value then you may as well.

My uncle contacted me today as he was interested in purchasing a 55 inch LED TV and saw a great one at a store he was in. The price tag was $4999.99 and apparently the salesman offered to knock it down to about $4699.99. As well, he started to offer all of these accessories and add ons as well for what seemed to be 80% off the retail price. Sure enough, the person tells him that is the best he can do as well.

As usual, he contacts me to see if I knew whether or not it was a good deal price wise as one of the factors he was thinking was that retail sales have been bad for companies and so maybe this truly was a good deal. When he told me the prices of the add-ons they actually sounded decent to me. But for the TV itself, I had to contact other people within my network.

In general though, he didn’t care too much if there was only say a $200 to $500 markup. He is a business person himself too and understands that a company needs to make a profit. In fact, he was even telling me that even if it was say cheaper online or at a different place he would factor in other details like the shipping as well.

It just so happens that I knew a person that worked for this particular company and as a result he can get everything at a discounted price. With the information that was given to me, it looked like the cheapest that one could get it for was about $3700. An extremely substantial difference no doubt.

So after relaying this information, I found out that he was already kind of reconsidering holding off as a result of the new stuff that is coming out, but knowing that the company would make almost $1000 for that single purchase made him not want to buy it for sure. He made that pretty clear too as he didn’t feel it was right for a company to be making that much money on a single transaction.

Psychological factors like these always interests me when it comes to money. It’s especially useful to know too if you are say even trying to do simple things like making a side income from some kind of venture. I wrote an older post before called Because You Have Something To Gain which kind of dives into this realm.

In general, for myself I’d say a 20% profit margin is usually “fair” when it comes to reselling items when factoring everything such as the person’s expense and labor. But I guess the question is does the same hold true if say an item costed a company $100,000 to acquire and they then sold it for a $20,000 profit? Would I be okay with that? Even I’m one to say I would be bias in saying not really.

In some ways it is kind of silly too when I think about it as many things like say a membership or a professional service fee is technically “marked up” according to what the provider thinks it is worth. In that situation, you mostly compare it based on value and not so much on how much of it is profit for them. But knowing that this is an issue for people means it is definitely something that you have to put some thought into when it comes to your ventures.