Switching Costs

Every article of clothing you own was set for your 300-pound body. But then you decided to go on a diet. Now you're 200 pounds, and everythign swims on your body. Switching to non-fat cost: a whole new wardrobe.

Switching costs are actually something technology companies really push. Sign up for an Oracle-style database to hold your data and it'll cost you a fortune to ever switch to another database maker.

When switching costs are high, customers are loathe to switch. And they don't, without enormous reason. So they keep paying and praying that...nothing changes.



Find other enlightening terms in Shmoop Finance Genius Bar(f)