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Newsletter Section 6

Soap Box

ApplixWare dramatic price decrease

(Mark Bolzern)

This story is a good news/bad news scenario. Good news for anyone who thought as I did that the price of $499 was just too darned high for an Office Suite package (in an age of $199 Microsoft Office), regardless of how good it was. Bad news for WorkGroup Solutions Inc in the short term. How so?

Well, WGS spent about 90 days developing a mailer for ApplixWare and simultaneously lobbied to reduce the price to $199, or at least to $249. There was no budging. So finally I approved a $50,000 mailing to sell it at $445, the best we could do under the circumstances. The mailing had been on the street for less than 30 days when we got word that the price was being reduced to $199 on the 4.2 developer version (which we now sell at $189), and that it would also be upgraded for free to the 4.3 office version as soon as it was available (March expected).

So what is wrong with this? Well, for one thing we had to make up to some people who had paid the higher price the week before the announcement, and all our inventory had to be re-valued. Fortunately our vendor (a very good but apparently somewhat unpredictable company) took responsibility, and we got help with this area. But this was not the worst part.

The worst part is that it takes about 3-4 months for a mailing to bear full fruit. When something like this happens, it cuts the life of the mailing short... in other words 50K and a lot of time and effort down the drain.

Ordinarily this would not be that big an issue, but WGS has taken quite a number of hard knocks since last summer. We had two major distributors not pay their bills to us, after we shipped them product totalling more than $100,000.

We are hoping the end of the story will be a good one. That the reduced price will generate so many ApplixWare, and other products, sales to more than make up the losses, and therefore a happy ending for all concerned. In the meantime, if anyone still responds to the mailing, we deliver ApplixWare at the reduced price (without them having to ask, even if they send a check for $445).

Now don't take this wrong. WGS is not about to go out of business, nor are we in trouble. Fortunately a lot of people deal with us honestly every month, and we try to be fair to them in return. This after all is what it is all about. This and showing people what they are missing if they are not using Linux! Freedom or slavery, which do you choose? I guess I am a slave to Linux and my business! :-)

If you think that WGS is not spending quite as much money promoting Linux as we once did, you now know why. A business must break even at least. If sales jump and we make more, and keep the bills paid, then we'll fuel the Linux promotion mill, and open the throttle up further.

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