Honoring Buisness: Does Profit Mean Getting Over?

As I observe many emerging teenagers develop their own businesses, I have witnessed the difficulty students have in understanding the cost of running and conducting business.

It is my opinion that due to past business experiences for many African-Americans and Hispanics i.e., years of being priced gauged by white business owners and manipulated by big business, and even being denied equal access to conduct profitable trade, today's generation of emerging entrepreneurs under the age of 21 feel compelled to price items 'fairly'. For example, let's say it costs a young business owner $2.50 to produce an item and the competiton sells a similar, of equal quality, item for $10.00. The young business owner may feel compelled to sell the item, for less than $10.00 for a number of reasons.

1. A lower price will equal higher sales volume

2. $10.00 is 'getting over' on the customer, even if they are willing to pay $10.00 for the product

3. Simply put; they don't want to charge the customer, 'too much'

My concern with this concept varies. The concept of 'voluntary exchange' means is consumers are willing to pay the agreed upon price, it's not getting over. It's conducting business. Of course if the business onwer put a gun to the customer and forced them to purchase, then it's no longer voluntary exchange; that's robbery! Look at Nike. It costs Nike little to nothing to produce a pair of dunks, right? Let's guesstimate somewhere around $10.00 including shipping (I'm shooting high). Nike turns around and resells that same pair of shoes for what, $80.00? And, to Nike's defense, consumers purchased, many with no objection to price. This is partially due to supply and demand as well as, many consumers just wanting to fit in at any cost.

My point is this, in business (and I am not talking hustle game, street game, or Wall Street 'debunk the investor' game) for the business owner the objective is to get the highest price for your product or service that the customer is willing to pay. On the other hand, the consumers objective is to pay the lowest price for the highest QUALITY product on the market. Business is the abilty to findthe common ground, where the business onwer and the consumer are both happy.

For my young entrepreneurs reading this, I also want to disucss dividing up the money. But I'll save that for a later BLOG!

Peace and Break Bread!