Supply & Demand

I think you have arrived at a sound conclusion. It is not any different than working for an overtime rate. The first 40 hours are at one rate, then due to the employer needing to have you work more, you get paid time and a half. In the same way, if you charge a premium price when you have to work more hours to get to a client, that is not a bad thing. It is simply a reflection on the fact that as you have fewer hours left available, they are more valuable to you.

I think this is a good question to ask. In a day and age where being frugal is often thought of as a virtue (at the expense of employee's in some cases) where do we draw a line? Would it be situational ethics? Would it be WWJD? I find myself struggling with this in the business that I work for where certain customers get this price and others this price. I feel torn at times. your thoughts would be greatly appreicated. Mahlman@juno.com

It's not ethical to lie. God requires us to have faith and to believe things that he says even though they are not yet visible. How much is something worth and what gives it its value? Does the person providing the service believe that he is worth that much even though he is just starting and has lots of time? Is value ever dictated by how much the customer has to spend? God requires us to be good steward of the resources he gives us. One of the ways that I apply that is to chose the cheaper of two equal products or services (at least as far as I can tell). Do we value our service more if we get paid more for it? Does that have anything to do with God's way of looking at things? He does tell us to gain by trading until he comes, but he certainly isn't talking about monetary gain primarily. Oh, that we could see things from God's perspective. These questions hit very close to home because of my business. I offer flat fees on my mortgage business and in other services I offer. I do this partly to be impartial and to take away the motivation to be charging or trying to charge higher from those that will pay higher, unless they know it (which is usually not the case in the mortgage industry). Yet, I can fall into frustration when I do lots of work on a file for the same compensation. I feel devalued. I feel like asking everyone that I work with, \"Do you agree that the laborer is worthy of his wages?\" Will you pay worthy wages for this work? In other words, here's my flat rate, here's the work that I plan on doing for that rate, and if it goes considerably beyond that, then pay me something more in appreciation or in this much amount per hour worked. I think another problem with the scenario is that many people who want to charge more will say that they charge more because they are the best. Well, how do they know that? They don't. They don't know where they are on the absolute scale of competence and whatever factors makes up \"the best\" in that industry. As you can see, I don't have the answers, but many questions. Anyone wanting to show me the way more clearly in these issues, I am looking to learn. Thanks for the question and the post. May God receive the glory in his wisdom and truth working in our work.

I dont see this scenario as unethical, you are not trying to dictate the marketplace. Is it unethical to charge what someone is willing to pay? How often do we really know if our version of value and the clients are the same?

I believe it was John Wesley who said something like this \"Make all you can, and give all you can.\" Very few of us have products or services to offer that are not in a competitive marketplace. In that environment I always try to make as much as I can and still win the bid/get the order. I sometimes bring it down to a practical level and think something like \"If we can win this order we'll be able to feed another 100 orphans for a month\" and that becomes a prayer for God's blessing. It I \"leave something on the table,\" I may literally be taking something off the table for those causes we give to. I believe part of my responsibility when praying the prayer of Jabez is to do all I can to make it possible for God's blessings to become reality...and this involves being wise in quoting/pricing.

I wanted to respond to Mr Huddle... I think you misunderstood about the person just starting out - Mr. Pink suggested a discounted rate, not an inflated one. I'm not sure I understand where you think the lie is either. If a client wants your services just that bad - it's his decision to pay the higher rate. Although, at what point should you just say no? When you're at the point you inflate your fees that much AND you don't need the income, isn't that time better spent with family. Assuming, of course, you have one! I also think value is in the eye of the beholder. What I think is valuable and would pay top dollar for - you might not give a nickle for!

It seems that your Supply & Demand article has a great deal of application especially in seminar and charitable areas also. I am seeing more conferences, seminars, and charitable venues with higher prices and amenities that are considerable. Now we see more seminars over a meal at $30-50+, mentoring tools at $500+/day, and charitable meetings on boats for similar charges etc. perhaps slightly overdone to make a point. I understand the competitive nature in the secular world, however, I recently took the Perspectives on World Missions course taught across the country and have noticed that we can support national missionaries across the 10-40 window at $100-150/month! I realize some believe it is necessary to have business and charitable education at these venues to attract top executives and some business owners, to encourage comfort and/or use the price to indicate high value. Frankly, however, I am beginning to say no to some very fine, excellently done luncheons and charitable weekends (fully paid for me, because I am a donor) to save more, live a less costly lifestyle, to leverage my giving and support nationals where they can be the gospel to those around them faster and with more meaning and understanding then can I or others from developed countries. When I do not buy the ticket it does not mean I do not support the people and great purpose of these christian events. I believe no matter how wealthy we are we still need to be trustees of the dollars the LORD has given to us to oversee and make the most of them.

Everyone has an opinion, while that is in itself not wrong, having an opinion contrary to God's word is what makes things unethical. I believe many so called %u201CChristians%u201D are going around looking to a person in a position of authority and asking them ultimately for permission to sin. The real question is are you Hording, or are you being a Glutton... and most importantly where do your resources flow? Ethics must have a standard, and quite simply the standard is the Word of God. Asking man's opinion to obtain a consensus is flawed, and lacks wisdom. My wife says to justify is to lie. www.holyspiriteconomics.org

When reading the scenario Michael poses I have some issues. First he states that the person is now booked to capacity and no longer is willing to consider $1,500 or even $3,000, then why is he considering $7,500? If you are to capacity you are to capacity. So to me then this example if we are Christians is acting just like the world. \"I'm too busy to help you for $1,500 but I'm willing to do it for $7,500.?!\" I don't know, feels like greed to me. I think that a price should be set and charged for whatever services are. If you need to change your pay structure fine, either flat fee, or per hour, or whatever based on your industry, but to charge one person one amount and another a different amount just because you can...doesn't sit well with me. Jesus told us to use balanced scales.

How would this even work if you were propecting for business? Also if money is not your god,and you are a giver as long as you are not lying(which is one of the sins that lead to death)and can truly be convinced that you are being truthful(and not kidding yourself)technics are allowed.

Clients are demanding your time/service because you have been exceptionally efficient at meeting one of their highest needs. Isn't receiving a higher fee a reward for being the most efficient provider in that market? Going forward, the additional money you receive allows you to build a way to get your exceptional service out to more clients (which is an act of love for them). If you disallow that, the corrolary is also true: Rejecting the additional money will Deprive those potential additional customers your exceptional service -- they'll be stuck with the current lower level of service. Where is the biblical law that dictates a price? We are charged not only to obey God's law, but to refrain from adding to it. Is there anywhere in scripture where prices are in any way governed by God's law? Our scenario assumes honest scales (we aren't hitting our client with sneaky hidden fees), and assumes no favoring one class of people over another.

I think ethics come into play if you are trying to take advantage of someone. Recently, the office upstairs from mine had the alarm go off. The tenant could not reset it. The tenant didn't even know they had an alarm company during the 5 years they have rented the office. Upon finding a phone number on the ringing appliance, the alarm company said they could turn the noicse off, but the customer would have to join their service first. That's unethical. By the way, we helped the client stop the noise. We cut the wire to the loudspeaker. Free. Good for them and us. From the way I interpret your story Michael, it is free enterprise supply and demand. It is always up to you to set your prices and up to the customer whether to buy from you or not. Nothing to do with ethics in my sight. Also, it is not apples to apples. One customer to another is never exaclty the same.

Proverbs 30:23 says The LORD detests differing weights, and dishonest scales do not please him. I'm not sure I'm in the correct context when I ask this rhetorical question, but does differing weights = differing rates?

I agree with the economic apsects of your posting... supply & demand etc. But what about the Purpose for whatever business I am in? As a Christian in business, a major aim is to serve (minister to) people in ways that enhance THEIR lives. Although busy for instance, I am currently working with a single mother with no money, because she needs help and I have the opportunity, expertise etc to do so. We try & operate on the following three Biblical precepts: 1. Be Who you are; 2. Go where youare called; 3 Help who and as you can. Our business is small, but growing entirely on referrals and networking, to exceed the performance & profitability of small to medium competitors in our industry who run on more \"conventional\" lines.

I believe that many of the posters are over generalizing the issue here. I don't believe this is about differing scales or treating people differently. It is as much about the value of our own time and the price we put on our priorities. If you are new in a business you might charge less for your products or services than your competition in order to get started. As time goes on you will most likely charge more. Partly due to increased overhead and partly due to the increased value that comes with your expertise. You might charge the same or less due to increased efficiency, but the result is the same. Your profit per transaction should increase. If you are a highly sought after seminar speaker or consultant and do not need to take on new clients then in order to take someone else on there is an increased cost. Something else in your schedule has to give, and there is a cost AND value associated with it. As long at the party wanting to gain access to your time is aware that they are paying a premium AND that they see measurable value to that extra expense, then it is their decision. They can choose to pay or not to. If it's manipulation or a \"sales technique\", then I would have a problem with it. There will always be those times that we help at cost or a loss. If it because God is telling us to, great. If not, what good are you when you go out of business. I have taken a loss on a mortgage loan in order to protect my client. I did what was in her best interest despite the fact that there was no longer any room for me to make a profit. I felt that God was telling me to protect her. I treated her the same as all of my clients, but in this situation it was for free. Later, I found out that she was a Christian and had been praying for God's help. I felt blessed to have been able to help as I knew that I had been obediant. If I had been stuborn and made my \"usual\" rate on a loan then I would have put her in a position to lose her home AND I would have missed a blessing from God. I do not charge a flat fee. Every transaction is different. Some take more time and others less. My committment is to take care of my clients as if they were a loved one and to make a fair profit. I have a responsibility to my clients to stay in business. I manage mortgages, not just sell home loans... I truely do not believe that this is a matter of ethics or morality. More than anything it's a matter of what is communicated and the integrity of the situation. Ultimately, each of us know where our heart is. www.pdx-mortgage.com

I believe it is ethical to charge an amount the customer is willing to pay for your services, IF your services are of more value to them than the money they give you. I publish a stock investment newsletter and at certain times the \"market\" can support a higher price - I charge it. At other times, I lower it.... but in either situation, they get a great deal of value more than I charge. The customer has the right to say the service is not worth that price to them. I sleep well at night because my price point is not based on what I want to make (greed), but rather based on whether or not I can give the customer more than they give me.

I just wanted to clarify my post for Lorisa and possibly others. My first sentence was not a conclusion that lying was taking place in this circumstance. My first two sentences were juxtaposing two principles, being lying and faith, that could be at work depedning on the person's heart or conscience toward God. If God is telling me that I undervalue myself and my services and to change, then my faith in God on that point will override the fact or be trying to overcome the fact that I feel like I'm lying when I try to charge more than I am worth. That was the point of my first two sentences. I agree that Michael's post did not clearly suggest lying going on. Thanks! Roy Huddle

It seems to me one of the issues that has to be brought in to the discussion is full disclosure. It would seem that if the seller fully discloses this issue that they can only provide the service at a premium rate and the buyer sees value and is willing to pay that rate then there is no ethical issue. However if the seller does not disclose the reality and the reason for the cost that would seem to be unfair. As a buyer if I were being charged a premium or higher rate I would want to know why from the seller and not find out from another source. One principal I would use here is the Golden rule

First, I I would like to point out that God examines the motives of the heart, so many of the different scenarios offered here could be sin or not sin simply depending on the individuals motivation. If God is directing you a certain way and you go another, you are in sin. The second issue here seems to hinge on the definition of value. If I have a full schedule and the finances to meet the needs of my family, and clients are wanting me to take on additional work that would cost me time with my family and friends, I decide what that is worth, not my clients. The client has the right to go somewhere else and I have the right to refuse the work, but I still decide value. If I left it in the hands of clients, I would be out of business and doing a disservice to my family, clients, and ultimately God. Everyone wants a good deal. It is my responsibility to add value to my service. If I am lying to do this, then I am in the wrong. If I am pointing out why my services may have more value than someone elses, then I am simply prioviding information for the client to make an educated decision. I have had several examples where clients chose to do work with someone else based on price and then called me later wanting me to come fix the problems with the original work. They got a lesson in value. They would have paid more for my service upfront, but less in the long run. As Christians in the market place I feel we should have the best work ethic and the highest quality product or service. We should be the nicest to work with, and we should always live up to our word. It should cost more! I know my business has this kind of reputation. I have worked hard for it. So when a client wants me to do work and is willing to pay a higher rate, this is what I have been striving for. By being ethical and doing things right I have added value to my business. I have done a greater job serving my family, because I may be able to work fewer hours with the same pay and have more time to spend with my family. If I am simply price gouging, then it goes back to the heart issue.

My spiritual father once told me when struggling with issues like this. To take it to The Word on an individual basis. If you can find justification in your heart based on your individual interpertation of God's word then go for it! Proverbs 28:8\" He who increases his wealth by interest and overcharge gathers it for him who is kind to to the poor.\" on a personal note in my business everyone of my customers talks to each other. So even even when tempted by the world, there is no incentive. Additionally, if I'm to busy? Taking on the job at any price would sacrafice family & fellowship which is priceless! A win/win solution in this scenario is to hire someone & and allow another individual to be blessed by the gifts God has given you.

In scenario persented the services requested must be in strong demand. Let's take a step further and for simplicity sake lets suppose that this service you offer is critical to the survival of a persons life or mental health etc... How ethical is it then to increase pricing beyond the market rate knowing you will prevent those lacking financially from seeking your help.

Wes, let's take your thought a step further. Is it more ethical to charge a higher price than to turn the client/patient away completely? A person only has the capacity to do so much work without it affecting their ability to serve their existing clients, their family and their own health. We can always fit one more thing into our schedule, but it always takes the place of something else. I still believe that he central issue is the heart motive. If it is greed based (taking advantage of the situation, or maipulation), then it is wrong.

With all the comments saying that a variable pricing system is unfair, I'm surprised no one has brought up Jesus' parable in Matthew 20. Here a businessman hires a group in the morning for a set daily wage. He then hires another group at noon promising them the same sum of money for half a day's work. Finally, he hires some more workers a scant hour before closing and entices them with the identically sized paycheck! Was this \"fair\"? Think of the laborers as independent contractors. Perhaps the businessman had to pay these variable fees in order to obtain the labor he needed. An hour before closing and there's still a lot to be done. He has to bring in some additional manpower, he needs them quickly and he needs them to work quickly. Thus he's willing to pay a higher price to get exactly what he needs. I have no problem with charging based on value. Ultimately, though, as nearly everyone has concluded, motivation of the heart is the key.

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