[davidw]

As ramchip says below, there are a zillion reasons why high margins may happen, including some that are "good", and some that are "bad". All other things being mostly equal, I'd go for the guy who's not making as much money off of me, because that means that more of the value is accruing to me, rather than to him. Simple as that.

[tomkarlo]

You're assuming that the cost of goods sold (the price minus the margin) is a reliable indicator of the value you receive in the final product. That's a really questionable assumption given that the whole idea of company that converts raw goods into finished consumer products is to maximize the amount of value they add onto the raw cost of making the item.

You're basically saying you prefer to buy from the company that adds relatively little value to its products in the form of good design, efficient production or good sourcing of raw materials.

Let's say a company found a way to create goods with negative raw goods costs - such operations do exist, usually by converting trash or waste into a desireable product. (E.g. sewage into fertilizer pellets.) Is that a less desirable product than one that has a lower margin?

[backprojection]

This seems a bit backwards. The price and hence profit that the guy can sell you his widgets for is set largely by how much you (on average) are willing to pay for the value his widget brings you.

Saying, hypothetically, "All other things being mostly equal" isn't really useful here I don't think. It's saying: 'assume the iPhone and SGSII generally represent the same value to people' clearly for a large portion of the people, they don't.

( I own a SGSI )