Re:Land and Building (Score 1)

As someone who has worked behind the scenes of pricing a product more times than I can recount, here are some things to note: 1. Price almost never depends on cost anymore. Pricing is more likely to be a variable of "What the market will bear." If Apple found out tomorrow that customers were only willing to pay $101.95 for an iPod Nano, that's what they would price it at. 2. What is the breakdown of cost for most products that involve creativity and many individuals: The initial brains to bring the product together: translates into salaries for top talent Bunch of CEOs, marketing analysts and other number crunchers to assess profitability of product (more salaries) The look and feel of a product (more salaries to designers) Packaging (all that paper that the iPods cost in are printed paper with sparkly bits and pieces attached) Marketing (salaries for marketing and advertising firm plus the cost of advertisements across various media platforms) Storefront (montly rental of those prime real estate spots Apple occupies is pretty hefty) Sales force (that goes and sells into outlets outside of Apple storefronts; more salaries) So, in the final analysis, much of the money after the initial salaries to the brains that developed the product goes into salaries for other people who package, market, advertise, sell and merchandise the product.