Price is not based on cost! Professionals are knowlede workers, not machines.
I read this article from Runner's World about the cancer risk of plastic water bottles. It states that the safest water bottle is stainless steel. Prior to reading this article, I purchased plastic water bottles and consume about one per day. They are kind of a hassle. As case of 24 is heavy and take up a lot of room in the refrigerator. They fill the recycle bin. And it just feels wasteful to throw away so many. The stainless steel water solves each of these pains at less cost. The only trade off is that I have to wash them.
This week, I bought four H2Go stainless steel water bottles from Target. They were located in two different departments: sports and automotive. The bottles in the sports department range from $15-25, whereas the bottles in the automotive department ranged from $10-15. Furthermore, the four bottles I bought were on clearance for $5 each.
Here's the takeaway: Price is not based on cost! Does it really cost more to make a stainless steel sports bottle as opposed to a stainless steel travel bottle. Maybe, but I'm sure it's not 30% more. Ronald Baker, founder of VeraSage Institute, is on the leading edge of value-pricing for professional services firms. His mission is "to, once and for all, bury the billable hour and timesheet in the professions." Two important points he makes are that professionals sell knowledge and expertise, not hours; and that value is subjective, value drives price, and price drives costs.