No, they want their return to go up. They don’t care about the margin, they care about the total yield (growth + dividend).
> Unless you can convince them otherwise because you're growing -- but even then, they still want your profit margins to eventually rise.
No, you want your net profit to rise. You want your margin to be low because then its harder for others to compete with you.
> If you go into a business thinking "I want to make $X, and I'll lower my prices until I hit that target", then you're approaching your business the wrong way.
This is true.
> Even in cases where companies are trying to cement a monopoly or drive competitors out of business, they still don't make their pricing decisions based on the cost of material, they make their pricing decisions based on what prices will drive competitors out of business. Companies like Uber famously lose money on many of their services because they're trying to cement monopoly statuses for those industries. They get VC money and they price based on what they think they need to price. Their decisions are based on what the market looks like, and they're willing to have negative profits in order to hit the prices that they think are necessary.
Glad you agree that companies are optimizing for their place in the market and not naively optimizing for a large profit margin.
> See above, that's not how markets work. You don't charge what a product costs to make, you charge what the market will bear. Literally the first thing you should learn in an economics class. Products cost what people will pay for them.
This is true and still misses the point that an increase in the cost of inputs results in an increase in costs, resulting in an increase in price.
> As opposed to right now, where Amazon isn't trying to automate any part of its warehousing or delivery process?
> more
> opposed
I think its well understood among people who are familiar with unions that increasing labor costs results in acceleration of an automation process that is already in progress.
