Post by AztecBill on May 24, 2011 13:44:41 GMT -8
When there is a set supply that can not / will not be increased, the price is often set too low and middle men make the bulk of any profit. The best method to offset this occurrence is to set the price too high and lower it on a scheduled basis to acquire new sales as the price dips into the demand curve. The Internet is a perfect vehicle to facilitate this method.
Example #1 - IPO
During an IPO middle men are hired to "set" the price. Most often insiders get that initial price and the shares are sold by them soon after the offering at a muchly increased price. The middle men get most of the reward for the hard work of the entrepreneurs.
Example #2 - tickets
Tickets to concerts, sporting events and the like are often set way too low for the event. Middle men gobble up the tickets and re-sell them at a steep profit.
The solution for these two examples and all examples of products with a set supply and a questionable price is to set the price very high and lower it gradually. This works well in both examples above.
The Super Bowl should set all tickets for sale on-line at $50,000 each. They can then reduce the price $1,000 a day for 45 days. Then reduce it $100 a day for 40 days. At that point the price would be $1,000 a ticket. They could then reduce the price $25 a day until all are sold. This would allocate the tickets at fair prices and make sure the owners of the product were the ones compensated for their wares.
An IPO would work the same. It would allow the general public the same access to an IPO that insiders and financial institutions get. Make them work for their money for a change.
Example #1 - IPO
During an IPO middle men are hired to "set" the price. Most often insiders get that initial price and the shares are sold by them soon after the offering at a muchly increased price. The middle men get most of the reward for the hard work of the entrepreneurs.
Example #2 - tickets
Tickets to concerts, sporting events and the like are often set way too low for the event. Middle men gobble up the tickets and re-sell them at a steep profit.
The solution for these two examples and all examples of products with a set supply and a questionable price is to set the price very high and lower it gradually. This works well in both examples above.
The Super Bowl should set all tickets for sale on-line at $50,000 each. They can then reduce the price $1,000 a day for 45 days. Then reduce it $100 a day for 40 days. At that point the price would be $1,000 a ticket. They could then reduce the price $25 a day until all are sold. This would allocate the tickets at fair prices and make sure the owners of the product were the ones compensated for their wares.
An IPO would work the same. It would allow the general public the same access to an IPO that insiders and financial institutions get. Make them work for their money for a change.
