This is why we can't have nice things - LL Bean changing its return policy

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33. i'm not arguing that it's a blanket disconnect. it depends on the market and the business.

for instance, i would hope we could agree that if apple could shave $10 off the cost of an iphone on way or another, they're not particularly likely to shave $10 off the price of an iphone.

the extra market share they could gain from cutting the price by $10 would not come close to justifying the loss of $10 profit per customer, especially given the brand loyalty in that market. the big per unit profit margin is a big clue.

on the other hand, a pure commodity like copper or aluminum is vastly more a function of cost. cut costs by a penny and the price is likely to come down by nearly that much because to a large extent, price is the only thing to compete on.


the question in this case is where does llbean fall in this spectrum. i'd say somewhere in the middle. they're certainly not in apple's enviable position, but then who else is. but they're not a pure commodity either. so in theory there could a a basis for a split, with some benefit going to shareholders and some benefit going to consumers as a partial price reduction. but in practice this is too small a factor and i really don't think they'll cut prices at all over this.