Increasing Prices To Grow or For Inflation

Increasing Prices To Grow or For Inflation

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Recently I was reading how Amazon was increasing its membership fee for its Prime subscription which had a lot of people feeling that the company is charging way too much and taking advantage of its leadership in the industry. The other side of the opinion is that they just want to expand more and so increasing the cost would enable them to do that. Kind of made me wonder, would you ever increase the price of your product or service just because you want to make more to invest in items or would you only do that with factors like inflation?

I guess a simple example would be you sell say computers at $1000 each. Now all of a sudden you want to develop a large storefront. So there would you now actually increase your computer price by say $100 to do this or through other means such as simply trying to sell more computers and other services? For this example I would be inclined to say try and sell more computers. Inflation or a sudden increase in the cost of business would be the only real reason to increase the price of the items I feel. Especially when you have competition.

I guess that is the debate with this Amazon Prime membership and whether or not an increase for the sake of growing is a good thing or bad.

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