Monday, July 27, 2009

Price Cuts

I have noticed that almost every product I ever see in a store has an apparently reduced price. Another thing I've observed is that the original price was so high that I doubt it was ever sold for that much. I assume that most of the time the discount prices are the actual value of the product. It usually looks something like this:
Original Price: 34.99
You Pay: 29.99

Suggested Retail Price: 14.99
Your Price:12.99

But retailers are overlooking one major asset; They fail to recognize the full potential of this technique, but instead make very small discounts on the price tags. If I were to run a business I think I might just take this idea a step further and to every item in the store do something like this:

Original Price: $8.99
Your Price $1.99

Bag of Chips
Suggested Price: $12.99
You Pay: $1.99

Original Price: $3999.99
Only $499.99
This would not only make customers feel like they were getting a great deal, it would also allow me to charge more money on the final price while still keeping it much lower than the original price.


dwrichy said...

So, have you tried applying this brilliant principle?

Beckalita said...

This reminds me of when we bought our wedding rings from a lady that was a friend of Krista's. When we went to the jewelry store, she gave us 50% off, which we assumed was because she liked us because of our mutual acquaintance. We left thinking we'd gotten a steal on the set, only to find out later that we paid probably just over what it was really worth. Live and learn. It looks like that's what you're doing! :)