My belief is that profit is one of the largest secrets businesses keep from other businesses and society itself. If you start thinking about profit and cost you'll inevitably turn off your consumer trained brain something companies would hate to see. So what are the reasons companies keep profit a secret? Well here's a few: Competition and Sales.
1) Competition
If the competition knows your profit margin they can figure out how to compete or take over your market segment. If profit is very high then creating a cheap knockoff brand has a greater chance of occurring. There's always one competitor that knows your market, but now the field is open to anyone and everyone. Someone is always willing to charge less and now you have to figure out how to take price out of the equation completely, which can be a very hard task.
2) Sales
Once you make a sale and the customer buys a product they will be much more likely to keep track of ROI (return on investment). If your product doesn't give the best ROI they can then look at competitors and see how your products truly stack up. Are you holding back on a feature because its unnecessary? Or do you just want to make more money. Looking at the price and cost of the item will focus the sale in the wrong direction because as masterful salesmen know the majority of purchases aren't logical, but emotional.
As cold and calculating as this sounds, I like to look at a majority of my life in the terms of cost and profit. Perhaps it is the business person inside of me, but I always wanted to do a Cost Benefit analysis on my life and calculate the ROI of stretching in the morning. People know that watching tv is bad for them, but how much money are you losing when you watch an episode of Seinfeld? I am a fan of the NFL myself, how much of my life am I giving up to the 12 billion dollar juggernaut? What do you think?
