When cheaper does not save you money
I was chatting in PM with someone when the subject of "cost" came up.
The real cost of things is a common misconception and admittedly I like almost everyone else in this world do not keep track of real cost.
But our conversation was about business solutions.
Some business solutions have what can be a higher perceived front end or possibly even recurring cost.
So I created an analogy:
Lets say you are looking to choose between two solutions for running your business and selling your products.
We were talking about two specific ecommerce solutions but to illustrate this point I am not going to mention the names of the solutions.
One solution is quite popular because it appears to be "cheaper" than the other.
The other solution though it appears to have a larger up front cost has more features and meets the expressed need better than the second.
1. Solution one charges a small one time setup fee of $49 and no recurring costs and takes 7% plus $1 of each transaction which they process.
2. Solution two charges no setup fee but a recurring $67 a month and does not take any additional fees per transaction. You can use your choice of payment processors with it that charge 2.9% + $.35 per transaction or 2.39%
Given the example of 100 sales per month of a $97 product using either solution which is cheaper?
Solution 2 provides a savings of as much as $450 a month over solution 1.
But that is just a cost comparison.
There are many other things that must be analyzed before the correct choice for the individual is made.
It's also about strategies, features, scalability etc.
True cost relates to what a solution does for your business and how well you can use it to save more time, provide more for your clients, offer more attractive features to affiliates, make more from your own efforts, and ultimately make more money.
It never pays to look at a solution from a cost perspective alone... it only costs you in the long run.
Seek out and choose the option that best meets your needs. Don't handicap your business to save a few bucks a month.
Who knows that few bucks a month you saved may end up costing you a million dollars because your company could not grow, did not have the ability to deliver content or products in various forms that would tap new markets, and maybe did not grow enough or was not scalable enough to be sold to an investor.
Its hard for most to see the big picture... but you can start by looking beyond the up front cost and seeing the opportunities you may be giving up.
You can apply this to any buying decision where you are tempted to compare a bag of apples to an apple tree because the bag of apples cost less.
The real cost of things is a common misconception and admittedly I like almost everyone else in this world do not keep track of real cost.
But our conversation was about business solutions.
Some business solutions have what can be a higher perceived front end or possibly even recurring cost.
So I created an analogy:
Lets say you are looking to choose between two solutions for running your business and selling your products.
We were talking about two specific ecommerce solutions but to illustrate this point I am not going to mention the names of the solutions.
One solution is quite popular because it appears to be "cheaper" than the other.
The other solution though it appears to have a larger up front cost has more features and meets the expressed need better than the second.
1. Solution one charges a small one time setup fee of $49 and no recurring costs and takes 7% plus $1 of each transaction which they process.
2. Solution two charges no setup fee but a recurring $67 a month and does not take any additional fees per transaction. You can use your choice of payment processors with it that charge 2.9% + $.35 per transaction or 2.39%
Given the example of 100 sales per month of a $97 product using either solution which is cheaper?
Solution 2 provides a savings of as much as $450 a month over solution 1.
But that is just a cost comparison.
There are many other things that must be analyzed before the correct choice for the individual is made.
It's also about strategies, features, scalability etc.
True cost relates to what a solution does for your business and how well you can use it to save more time, provide more for your clients, offer more attractive features to affiliates, make more from your own efforts, and ultimately make more money.
It never pays to look at a solution from a cost perspective alone... it only costs you in the long run.
Seek out and choose the option that best meets your needs. Don't handicap your business to save a few bucks a month.
Who knows that few bucks a month you saved may end up costing you a million dollars because your company could not grow, did not have the ability to deliver content or products in various forms that would tap new markets, and maybe did not grow enough or was not scalable enough to be sold to an investor.
Its hard for most to see the big picture... but you can start by looking beyond the up front cost and seeing the opportunities you may be giving up.
You can apply this to any buying decision where you are tempted to compare a bag of apples to an apple tree because the bag of apples cost less.
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