Pricing is just Perception, Lesson 1

Consider the Sony SVRHD700 Digital Video Recorder. This fine-looking piece of kit has dual high-definition digital TV tuners, HDMI output and a 160GB hard drive to store up to 23 hours of HD video. The even finer Sony SVRHD900 is identical — except for a 250GB hard drive, storing 36 hours.

Now a 250GB hard drive costs just $30 more than a 160GB. But by adding $30 of hardware, Sony can charge an extra $200 for the whole machine — $1499 compared with $1299.

Why? Because you get 56% more storage, and 20% more model number, but pay only 15% more. Bargain!

The Long Tail of Small Business

Whenever we see “business” depicted on the news, we see images of office buildings, factories, coal mines… And yet of the 3 million active registered businesses in Australia, fully 72 percent don’t have any employees.

The median business is actually a single man or woman — likely to be a sole trader because sole traders are the most common form of businesses (39%), followed by proprietary limited companies (26%).

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