[kllvql]

I think you've hit on what always bothers me about this sentiment. It is obvious that at any point in time you can charge the maximum customers are willing to pay, but that allows for disruption through the channels like competition. The opposite where you charge the minimum to continue providing the goods or services seems optimal, though, leads to a company with zero profits that is unattractive to investment. Is there any literature on how to identify the optimal point of "whatever customers are willing to reasonably happily pay"? Businesses successfully exist on many points in the spectrum of zero profits to most profits the market will bear, but I'd be interested in anything discussing optimality.

[Edit] Amazon employee working in Physical Consumer (not AWS). Asking out of personal curiosity.

[LamaOfRuin]

I'm not an economist, and can't point to to anything in particular, but I would be skeptical of anything that claimed a general approach to that. "Optimal" depends entirely on what you're optimizing for, which is basically an infinite possibility space. I could need a significant amount of revenue immediately to accomplish a desired business development, or I could have plenty of cash and want to build a large and loyal long term customer base at the cost of immediate profit. As you say, successful businesses exist doing pretty much everything. The only limiting factor is being a viable ongoing concern (and that can just mean having a rich backer). I'm sure there are things discussing optimizing based on small slices of the possibility space though (but all the normal caveats about economists making dumb assumptions that rarely apply to humans apply even to those).

[mabbo]

> Amazon employee working in Physical Consumer (not AWS)

You too? I'm in AFT. I posted the original "whatever the customer is willing to pay" comment. Mostly just offhand and yeah there's a lot of nuance to it.

I don't mean that anyone should want to individually gouge each customer, but when running a business one should pick a price whereby the total long term profit is maximized.

Your pricing determines the number of customers. Your pricing also determines the profit on each customer. But choosing your pricing strategy correctly, you should have some people who won't buy your product.