Economics of Lead Generation
December 30th, 2008
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Economics of Lead Generation – The Price Fallacy
History of commerce tells us that the more we buy the cheaper it should be per unit. Shopping at places like Wal-Mart, Sam’s Club, or Costco illustrate this and have trained consumers to expect to pay less per-unit the more units we buy. For example, a single soda might cost $.60 a can, a six-pack $.40 per can, and a dozen $.30 per can. This per unit cost reduction happens through economies of scale. The stores can sell it to us for less because the manufacturers charge them less. The manufacturers charge the stores less because their cost per unit drops the more they make, and big orders mean larger amounts of money coming in more digestible and predictable chunks. (more…)
