| Because humans are an ongoing cost and no one has figured how to sell non-consumable slowly depreciating goods as one-off purchases and keep paying your employees once you saturate your market. Option 1: Artificially sell the thing as an ongoing cost. Option 2: Artificially make the depreciation cycle faster. Get consumers to regularly replace it anyway with upgrades or trend changes. Option 3: Make ongoing money from the item via a side-channel (tvs are great at this one) Option 4: Manufacture and sell a huge number of different goods across market segments and weather the slow depreciation cycle (Oxo does this). Option 5: Sell some consumable good you can get recurring revenue from along side the item (Coffee pods, printer ink) Option 6: Make up the money on maintenance, repairs, and financing. Become a bank. Option 7: Make your money in some other sustainable profitable business and drop the product once you've gotten what you can for it. All of these kinda suck and option 1 is easy to implement. |
employees? they get fired once the market is saturated and demand flattens. ITYM shareholders.
When you look at it from that angle, another possible solution is:
- downsize manufacturing plant/capacity to make it match (or slightly exceed) replacement demand.
But that would mean a steady state profit margin (and not a cancerously growing one), so it will never fly.