Amazon. com ranked as one of the best retail sites on the Internet and is regarded as the universal model for successful internet retailing. Item storage, shipping, and delivery have become its operating expenses. Amazon cannot be profitable with selling products through online with relatively high cost. They need to lower the price in order to create customer value and earn more profit. Majority of the customers would prefer low cost than the high cost. This scenario is similar to the example I will be given. Supposed to be, you are student and you plan to sell all your old books to lower level students. Of course, you do not know all of the lower student so you plan to sell them through online and anybody could see what you sell. If those books of yours are too expensive, then who would want to buy your books? You should set a good price and maybe low cost would be a good idea to deliver and sell fast, since students nowadays are preferring low cost because they wanted to save money. However this measure is expected to change over time, depending on the situation. As we discuss in our economics, if the product is very scarce then the demand would be greater, and on the other hand if the product is not scarce then it would create a less demand. I believe that setting a good price or good cost is very essential in selling products and the strategy is, if the product happened to be scarce then you should set for higher cost because the customer is willing to buy for it no matter how much the amount of the product is. Other than that, you should consider the quality in order to add more customer value. If the customer enjoy your product, then most likely they will come back to you and buy more which could help you in gaining more profit. But however, if the product you sell is not scarce then you should sell it with a lower price.
"THANKS SO MUCH! :)