It's the idea that this could work.
I want to encourage people to honestly communicate ideas to me and I want to discourage people who would discourage those first people.
I explicitly don't want to restrict only the highest-quality research. I want to permit some amount of scamming me.
The article does cover those cases explicitly:
> Extremely high profit margins (>55%) could trigger a negative reaction, although this was not tested.
Basically they didn't even bother because it's pretty clear that someone selling a commodity for a massive markup is not going to benefit from this approach. Of course, that doesn't mean this hypothesis isn't worth testing...
Disclosing your costs if you have a modest profit margin and also modest absolute costs is good signaling on multiple fronts (as long as you're credible):
- Higher parts/ingredients costs are a signal indicating good quality
- Low profit margins make customers feel like they're getting a good deal
- The appearance of transparency signals your own confidence in all aspects of your business
and no one owes the author page views or their time either.
>This is a discussion board
Exactly, we're having a discussion on what the article is missing and why it matters.
You're also lacking cases where the markup is high, 500-2000% is common among a wide range of products, from Fashion to SaaS.
Edit: I'd also add, in the case of food products, if all vendors adopted the transparency strategy, once consumers see typical margins in that industry are in the 5-10% range, suddenly that not-unreasonably-priced organic chocolate bar looks like a high margin item...