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by WheelsAtLarge
1517 days ago
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It's not just SaaS. Marketing & sales costs are high for most companies with a product to sell. It takes a lot of money to put your product into your customer's mind. Just about any company that sells a product will eventually have a sales and marketing budget that's very high relative to other departments in a company. In software companies, manufacturing the product for sale is relatively inexpensive so sales and marketing becomes the highest cost in the budget. R&D is important but usually it's never more important than actually selling the product. Imagine a situation where a company spends the majority of it's revenue in R&D. They may have a great product, after a while, but sales would be unlikely to grow or they would decline since people would not know about your product. There are exceptions. A company like Tesla has a relatively small marketing budget but that's because of the CEO's constant shenanigans that keep the company in people's minds. A way to get millions of dollars of free advertisement. |
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