I think you're thinking marginal costs. Only charging for marginal costs will put you out of business almost immediately. There are plenty of non-marginal costs that need to be covered, which will make it "not close to $0".

If you think I'm talking nonsense, make sure you know what the term actually means: https://www.investopedia.com/terms/m/marginalcostofproductio... There's a common misuse (unless it has become so common that it's just another definition, if you're a descriptivist grammarian) to use it to mean "small, negligible", but I'm using it in the real business/accounting sense. Of all the industries, tech is among the worst in terms of being unable to charge based on marginal costs; so often our marginal costs are effectively $0 but the fixed costs of what we have are millions to billions of dollars.

To think about this from another angle, imagine yourself as a worker selling your labor in exchange for money. Would you voluntarily negotiate a pay cut just because you can charge a fraction of what you do and still swim in cash, or would you take as much your company is willing to pay you to work there? If your answer is no, then why should a company selling a product act any differently?

If squarespace following free market 101 upsets you so much, maybe you should start a squarespace competitor and charge whatever you think is a fair price. If what you said is true then you should be able to undercut squarespace by a huge margin and still make a profit. Give it a try and tell us how it goes.

> Yeah, like I said, it costs close to $0.

> My point is, SquareSpace could charge a fraction of what they do and still be rolling in cash. Instead they charge ridiculous fees that simply go to pay for more ads.

This is the classic sentiment by which one can tell that the person has no idea how businesses/markets work.[1]

The only relationship between the cost and the price is that the former is a floor for the latter. The price is determined by the value it brings to the one paying for it. If it is less than the cost to build, you don't have a business. If it's 1000x the cost to build, then you charge 1000x. Why would you charge less?

If the cost was so close to $0, and they charge $20/month, all that means is that there's an opening for you to set up the same business and charge, say, $15/mo.

I thought SS charged a lot more. Frankly, $20/mo is a steal. If a restaurant can't afford to pay $20/mo to acquire customers, they're not in good shape at all.

[1] I used to be that guy.