Rules of setting product pricing

The rules of setting product prices include not setting the price too low. From a business perspective, you want the most income you can get but not price the product so high it won't sell.

The general rule is to price a product at the point where a few people just start to complain it's too pricey. If nobody complains about the price, then your price is probably too low.

There's also the principle of total revenue for a given price. If you sell fewer units, but the total revenue is greater then you should sell at the higher price. That is, if revenue matters more than exposure. In MRH's case, exposure matters more than revenue where our readers are concerned. 

I suspect this is an experiment to determine how MR should be priced going forward - do they make more money at the higher price, even though they sell a few less magazines? Could be ...

The amusement parks in

Re: The amusement parks in

"The ideal thing (for them) would be to raise the entrance fee to $1,000,000. And have one person attend! "

....... until that lonely person goes somewhere else.....

Now This Was Years Ago...

Years ago, my sister worked in the publishing industry and she told me that it is not the cover price of a publication that actually pays for it. It is the advertising. That is what pays for getting the magazine, newsletter or whatever out the door.

The cover price, she said, pays for the "overhead" - the writers, the publishers, the offices and the office help, etc.

When you think about it, it makes sense. It explains how small organizations such as special interests groups, historical societies and the like, with small and/or volunteer staffs can often put out a hard copy edition that rivals the content of the big boys.

Of course, that was back in the day be for e-publishing...

George

April issue back to $5.99

My April issue is back to the $5.99 price also has 16 pages less.  Maybe they're just seeing if people will pay more for more content.

The subscription card price in the magazine works out to $3.00 per issue for the 3 year sub.

Enjoy

Paul

  Sun, 2013-03-03 07:12

Like those darn Iowans. You can't trust those people. Smell like corn husk and cow dung.........

"The ideal thing (for

"The ideal thing (for them) would be to raise the entrance fee to $1,000,000. And have one person attend!"

And then ideally, they'd just stay home and mail it in...

John

What's pricey?

I'd sooner pay $2.00 more for a magazine than pay, now get this, $499.99 for a Broadway Limited Paragon HO scale PRR K4 (4-6-2).  Maybe this is brass.  I'd be delighted to learn from you all.

Yes, you can pay more, for example $549.99 from the same vendor for an N&W Y6b 2-8-8-2 but that is a more complex engine.

Or $1,948.00 for a Z-scale UP 4-8-8-4 (with caboose) but that is: a) brass, andb) not a mainstream product.

Canada: the Cree word for price gouging

If you want to buy pricey MR's (or any US published magazines) come to Canada. Despite the fact that the Canadian $ has been statistically at par with the US Greenback for 6-7 years now (never more than a cent over/under for the most part) they still tack on an additional $2 to the US cover price up here. Additionally, we have both federal and provincial sales taxes, which makes the actual final cost on an MR go up to over $10 CDN.

On top of the cost, there's also the fact that I find little to read in any given MR that interests me. So it comes down to paying $10 to look at a few pretty layout pictures...

Which is why I like MRH

Model Railroader

I have either subscribed or bought MR for years and years.  I do not think the magazine is worth the money anymore. Now I see they are coming out with something new, Video Plus. Apparently this will not be included as a subscriber bonus but something separate!  I am glad there is MRH!

I gave up my subscription.

I gave up my subscription. Never anything of substance, as they seemed to just repeat the same article plot over and over. 

Also, sending me unsolicited DVDs, and then monthly letters asking me to return them or buy them was a bit over the top.

Yep...

Hmmm... $2 over 12 months is $24, If I'm at a train show I have a LOT of fun for $24...

If I just drop the subscription now I have $8.00 over 12 months, or $96...hmmm, that's almost the price of one of those fancy new Bachmann locomotives with a tsunami sound decoder.  I can get all sorts of fun out of $96! 

If I saved up for 5 years, I'd even have enough to go buy that Paragon!!  Thanks to MRH, I may even find a vendor who is selling them for $400 or $350 at clearance, hence I could get it after only 4 or 3.5 years of not buying the other magazine!  Or if I employ the Ebay for Buyer's guide [MRH] and learn how to use a Sniper, I could perhaps get it for even less on Ebay!

If MR want's to become a "Brass" product, they may want to take a good hard look at the brass market...the price on the shelf is not the price you have to pay...

Joef

Are you saying that we should complain more about the price of MRH?

Since we already dont pay for it, Im not sure you could drop the price much more.

Just kidding of course.

Steven

The price of MRH

If you know anything about open source software, that's the model I used when we founded MRH.

Open source software says there are other ways to make money from from good software than selling it. And it also says there are other ways to advertise than paying huge dollar amounts for marketing - instead word-of-mouth works very well to grow a presence in a software niche if the software is good. And audience growth can be used to leverage other ways to make money from the software.

As it is, we now have the second largest model railroading audience of any publisher, and we did it in less than 5 years. If this growth rate continues, we could be the largest in another 2 years.

The result of all this is model railroaders get good quality information for free to very affordable (for our videos and coming eBooks that are not free) and advertisers get very affordable access to a growing audience (with ad rates well below half of those of any of the other publishers).

One ethic we believe in strongly is that profit comes because you serve people well, so we put serving others and blessing them to be our highest priority, then comes profit because we did job 1 well.

Are you saying that we should

Are you saying that we should complain more about the price of MRH?

Since we already dont pay for it, Im not sure you could drop the price much more.

Just kidding of course.

Steven

You're not thinking outside the box. By paying us to take it off his hands, Joe could easily expand his "readership". A larger readership could mean more advertising exposure for the advertisers and potentially much more revenue for Joe.  I'll bet I could single-handedly come up with at least 10 more subscribers by making only 3 phone calls given that no space wasting paper is involved.

The key would be setting the payment high enough to make it worthwhile to subscribe, but low enough to ensure good profitability.

I might even be persuaded to sign up for a couple of hundred subscriptions myself.

Mike

Marketing & Profit

One of the things I have learned about marketing, is that giving people more than they expect, for the price they pay, is good business. It tends to make a single purchase customer, a lifetime customer. The lifetime value of a single customer can be amazingly high. Multiply that by the number of customers you have, and you should never need to worry about making money.

renewal notice

I just received my renewal notice from Model Railroader

1 year 42.95

2 years 77.95

3 years 107.95 !!!

What in the world is going on with MR that they need to charge this much for a magazine !

You can also get it in digital format for the same price !!! Or add digital to the paper copy at an extra cost (this option should be free)

I think they are trying really hard to provide some good articles, and they have a nice website with OK videos. 

But they need to get their costs down, they are competing against, well... here which is FREE.

Bill B.

Model Railroader

I've been a Model Railroader subscriber for a few years now, but used to buy it regularly off the bookshop shelf for about $17 per copy here in New Zealand. Thanks to the increase in the our dollar that's come down a bit now, but I recall seeing it as high as $24 at one local bookshop.

I recently renewed my digital subscription for MR and that was about US$12 for 12 issues. Not as cheap as MRH but they work on a different business model and I was quite happy with the price. I like both publications. As far as I'm concerned the more I see and read the better armed I am to achieve results that I am happy with. Much better to aim high than aim low and miss.

And as much as I'm happy to embrace new publishing technology I still like the printed page. 

Here's an idea

Model Railroader Subscription

I pay $3.00 per issue (3 year subscription) of Model Railroader which is delivered to my home each month by the Post Office.  For years I did not subscribe   to MR and purchased it monthly from my Local Hobby Shop. I did this to support my LHS.  I no longer have a LHS so I subscribe.

In college, I worked as the business manager for the college newspaper.  A significant part of our production costs were for printing (we did not have our own press and had to contract for this service) and postage.  This was a black and white publication on newsprint.  The postage varied each edition depending upon the % of space dedicated to ads; the more ads the more postage.  There were some weeks (Home Coming) where I sold a lot of adds and informed the editorial staff that they needed to increase the number of pages to keep the postage rates down; and in a print publication, you can not add one more page; you have to add two or four.

Venting

In my opinion, MR isn't worth it at $5.99.  They've got to be kidding to charge $7.99.  It was the best magazine for a long time.  I stopped my subscription about 4 years ago.  I have every issue, except 1 or 2 , since 1960.  Boy, what a great wealth of information. Today its 5 or 6 articles and a bunch of filler.  Look at a table of contents from the 70s or 80s.  Anyway, I really like MRH, keep up the great work everybody.

Nonsense about filler. Go

Yawn

I see it's time for the regular bash MR thread.  I got my April MR a few days ago and am enjoying it.  Now I'm looking forward to the next MRH too.

I know MRH does not like to "Moderate" threads

...but this is getting ridiculous.  I know, if I don't like the thread, just ignore it, but come on guys, don't we ALL have better things to do than to bash another publication?!?!?!? **SIGH**

Ken L.