DETERMINING THE SELLING PRICE OF A NEWLY INVENTED ARTICLE
Considerable business acumen is required in determining and fixing
the selling price of a new machine.
The factors to be taken into consideration are, the value of its
saving in every direction to its purchaser, the average amount of
capital invested in the prospective purchaser's business, and the
amount to be invested in the machine, as very often a machine may be
beyond the reach of those for whose use it is desired, by reason of
its price.
In any event, the cost of producing the machine should not be a
factor in determining the price, but the value of its product. And
the cost of producing the same results by any other process, will
give a very fair estimate, after taking into consideration the means
of the people who have to buy it.
Generally a machine is sold outright to the consumer, but in some
instances they are only rented for certain periods or volumes of
production.
That has to be determined by the nature of the invention and the
business to which it applies.