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Post by dalekbuster523finish on Nov 15, 2015 15:30:49 GMT
They'd have got even more orders if the pre-order price was £0.99, but price points have to be set to make money. I agree that you can't expect LE audio box sets for 99p but (I may be wrong) I don't think having £28 as a pre-order price would have made them less money, I think if anything it would have made them more.
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Post by jasonward on Nov 15, 2015 15:53:12 GMT
That depends on how much the boxset, transport and licence cost, then you have to factor in staff time, doubling of orders doubles the amount of time staff spend stuffing jiffy bags.
It's is mostly only the production costs that decrease per unit shipped as you ship more units.
If the production cost say £10,000 and the cost per unit shipped was say £20, then to break even (i.e. make neither profit or loss) BF would have to ship 1250 units when charging £28 but only need to ship 500 units when charging £40.
Shipping a further 750 units at £28 for a total shipment of 2000 units would result in a profit of £6,000 for BF.
Shipping a further 500 units at £40 for a total shipment of 1000 units would result in a profit of £10,000 for BF.
So in this scenario, even though double the number of items were shipped at £28 it resulted in less profit than shipping half the amount at £40.
I have no idea how accurate or in accurate the numbers I use are, but I hope they demonstrate that just because you take down the price and ship more it does not necessarily follow that more money is made.
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