CHAPTER 5

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.