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Post by kelseywatson on Mar 10, 2014 13:30:31 GMT -6
I find it interesting to know that the cost of goods is extremely high when starting a business. The guy who started the business in this video is very lucky to have a successful business. They said that the costs of goods will surprise you, and you should never expect them to be low. You have to be cautious because you don't want competitors to crush you. The way their company became a success is because they didn't just sell poor quality products to customers. They actually made their product to the best of their ability for their customers.
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Post by ken9390 on Mar 11, 2014 13:55:24 GMT -6
Warby Parker avoided a major startup pitfall by seeking outside help in their pricing. They underestimated how much the materials cost and almost messed up their margins completely. Its astonishing how one mistake can be the difference between widespread success and failure.
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Post by lmoore on Mar 12, 2014 15:14:47 GMT -6
Warby and Parker both thought that a price of $45 for sunglasses was a good price to start selling at. When they spoke to a professor they realized they could not sell that low and decided to go with $95 which allowed them to sell quality sunglasses at a fourth of the cost of what they would normally cost. They made an excellent decision to up the price and have had a successful business since. Others who want to start a business could learn from them and think twice about the cost of their goods.
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Post by nataliedodds on Mar 13, 2014 13:02:34 GMT -6
These guys were very interesting! I can tell that they really know what they are talking about when it comes to price and profit. I think it is very essential for someone looking to start a business to realize how much money and time they are going to have to devote to it. Very good!
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Post by amandayoung3231 on Mar 13, 2014 18:35:14 GMT -6
I agree with them. I know price is the main competitive way to market your product but it may not always be the best way. Things cost money and that must be taken into account when selling a product. The professor gave them great input and I will remember that. There cost ended up being double than what they thought they could sell it for.
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Post by brettstirling on Mar 14, 2014 10:33:34 GMT -6
This video is important to people starting out trying to compete with other companies or trying to offer the lowest possible prices. What these guys weren't taking into account was the cost of all functions not just the production and distribution of their product. Without a healthy margin, there's no room to operate, and certainly no room to compete. I think it was smart for them to pursue quality over low price/quantity. They can focus on better products for reasonable prices over mediocre products for cheap. This is a good video that highlights uncommon issues.
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Post by racheleperes on Mar 15, 2014 11:36:54 GMT -6
I liked this video. I felt that they gave some good advice about pricing and profits. I found that it was informative when it comes to pricing and profits. While in the beginning, it may seem great to have a high profit margin, it's not always a good idea because every little detail counts. Being new to the business environment and having a new product, means that you need to have your products priced higher so that you can make back what you put out. When starting a new company, it is important that you make back what you put out; it's even better if you make back more than you put out.
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Post by katelynjones on Mar 16, 2014 10:03:05 GMT -6
Pricing for a new business can be tricky. It is good that they talked to an external person who gave them a good perspective on pricing and how they would not have much money to market with. Being a new business marketing and advertising your business is a must! Great video, these two seem to have a passion for glasses and having them at an affordable cost seemed really important to them and it caters to consumers.
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Post by chelsearickett on Mar 17, 2014 17:56:17 GMT -6
They made a good point. It's important to be aware of ALL of the costs such as labor, marketing, distribution, machinery, etc. that comes with opening a business otherwise you will dig yourself a deep hole and never be able to get out. Us as consumers have to understand that we can't buy everything for $5 and expect there to be good quality. Just because something's expensive, doesn't mean the producer or seller is trying to take advantage of us.
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Post by csimo123 on Mar 18, 2014 20:45:50 GMT -6
Pricing is everything it determines whether or not you are going to make it. I like how they said let's charge and low price but then looked at how much it cost to make and said let's make money but still affordable. Good video makes you think about how something is priced and why.
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Post by jessicaratelle on Mar 19, 2014 13:11:37 GMT -6
I really enjoyed this video. I think it important to never underestimate the cost of goods. You must analyze your product and see what the most appropriate price is. You dont want the price to be too high for what you are offering and risk losing the business, but at the same time, you cant price too low and not be profiting. I like how they pointed out the importance of having the extra funding for marketing. Sure, they could have made the glasses for $45 but that would have left them with no extra funding to market their product, and also lacked quality.
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Post by meganlynch on Mar 19, 2014 18:07:13 GMT -6
This is a great lesson for entrepreneurs to learn. You cannot cut prices below your break even point or even at your break even point, or there will be no money for anything else. However, this should be obvious to those going into business. A better point for them to have made would to be explain that they two different options for selling their sunglasses. They could have sold a higher quantity of glasses at a lower price, or sold fewer glasses at a higher price. This is a very important business strategy that people developing their company need to decide upon.
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Post by Jessica Aucoin on Mar 19, 2014 19:58:55 GMT -6
I really enjoyed this video! When you start a business plan, it can be really exciting to see every detail fall into place. However, some aspects could be overlooked and become a hassle in your business plan. Being a glasses wearer myself (mostly contacts now though), I really liked how they came up with a business plan to make glasses cheaper. Even though the final price is more expensive than they intended, I feel like their price is still affordable to the consumer.
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Post by wwerner on Mar 20, 2014 10:58:18 GMT -6
The costs that go into a product will always be more than you think. Because there are so many components that go into making a product. You should always double hat you think it is going to cost you to produce an item. So that you will have the capital to do so.
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Post by mwinner123 on Mar 20, 2014 11:05:26 GMT -6
I like this video. It shows the importance of focusing just as much on the small things as you do the big things. Starting up a business is almost always hindered because of financial capital. When developing a new product, you may estimate your Cost of Goods to be a certain price, but because of your lack of record and experience in the market, your Cost ends up being much higher than what you anticipated. A simple $2-3 for a pair of glasses in your cost may seem insignificant, but whenever you make a million pairs of glasses, that seemingly small margin adds up very quickly. Having a firm foundation of the financial aspects of business and understanding the trends of the market and costs that should be included with products, will help you have a successful business and hopefully become a well known brand around the world.
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