Focus Locus Offline Upload & Sell: Off
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TTLKurtis wrote:
figure out your costs of living and your costs of doing business and then work backwards from that to figure out your prices ...when it comes to figuring out what you *need* to be charging to make a living at this.
I'm not sure why people always say this in response to a pricing question.
Did Google price their search engine based on the costs of doing business? No. They provided their search results for free, while they spent billions of dollars building server farms, data centers, mapping the globe, photographing the globe, developing the Android platform, buying up other companies for billions... while we search for free. Did Google price their first ads based on recovering these huge content infrastructural costs? No. They priced their ads on what the ad market would bear, considering that many other previously established online players like Yahoo were already selling search related ads.
Did Facebook price their pages based on their costs of doing business? No. They offered services for free, for years, and developed and gave away tools to other businesses to enable them to integrate the Facebook platform into their web presence. Facebook hired hundreds of the brightest boldest computer programmers, all out of pocket, all with no promise of return, all at the risk of zero revenue... in order to build up their business.
Neither Google nor Facebook priced their monetization products based on what it cost them to produce the audience that gives those products (essentially advertising) any value. They did not divide their capital expenses and employee compensation by the number of ad placements they estimated they would sell in their first year, or even their first decade.
Instead, they had to consider that any business who advertises through their platforms has a choice of venues in which to advertise in. It was not enough to offer a new, cool, and different way to advertise. It was not enough to prove that targeted online advertising is more effective than dying newspaper or magazines. And it certainly was not enough to cover their costs of doing business. They had to consider market readiness and acceptance. They had to consider the advertising budgets of the businesses they hoped to convert to customers.
In other words, they had to do their homework about the market... without regard to their costs to become a successful player in that market. And that is what it looks like the OP is trying to do with this question.
I don't understand why he/she is being borderline ridiculed for having the courage to ask.
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