Whoa, is that Gucci model wearing a Camel Flage Fanny Pack from punmug.com!? Phenominal!
I used the image above as a teaser for what you are reading now. Thank you for authenticating its validity.
Today I would like to explore the question of pricing. Why did I make all my store prices end in .99? And is that what I should keep doing?
I remember seeing some video in an economics class in high school that touched on the subject. Because you read a price you read from left to right they associate the first number more than the 99, so it does subconsciously appear much more than one penny cheaper.
I have to admit, even though I am aware of the implied illusion, I have been susceptible of falling for it too. Racking my brain to remember how much a listed item was will often have me recalling a 24.99 item as 24 bucks.
A trip to the grocery store has me scanning and comparing food items without factoring in the cents. I guess it works, but should I continue to use this strategy for punmug?
After some research I learned about some other pricing strategies at play in the world of retail sales.
Whole Number Pricing
According to this article from Strategy+Business customers prefer whole numbers. When I'm a customer I appreciate seeing whole numbers because it makes me think the seller doesn't underestimate my intelligence, even though I've already admitted to falling for the .99 trick.
I think it looks cleaner and it kinda makes the products appear as though they are of better quality and that is just how much they're worth, no bullshit. I don't want bullshit on punmug and I also have very high quality items so that's worth representing.
Luxury brands like Gucci and Rolex don't use .99 and they're considered pretty high end on the quality scale. I wouldn't say I'm on par with a company like Rolex. They're estimated worth is something like 8 billion. Mine is more like 800. So, even though it's cool we share that 8 the real issue is the amount of zeros the eights are hanging out with. Check out this lovely piece from Rolex it's an $8,800 gold watch. And I'm not rounding up. It's not $8799.99. If you're dropping almost 10g's on a watch you don't want to be hassled with the nickels and dimes.
This Gucci jacket racks in at $3,145. What a shame, all those pockets and no spare change to put in them. I think this jacket is priced rather high but considering Gucci is a pretty respected brand I guess they can get away with them. If I ever sell jackets at punmug I promise to never price them above $2,999.
There's even another strategy for pricing I learned about. it's THE RANDOM PRICE STRATEGY!!!!
You see this at Wal Mart and other high volume box stores that are everywhere with enough space to hold them. 4.62 for shoe racks, 0.83 cents for bananas from China.
I guess the strategy for this is to give the impression that the prices were stretched to their absolute lowest so as not to afford the ability to round to a more comfortable number. I'm not buying it though. I don't think this is the strategy for me.
I think I'm leaning towards changing all my prices to whole numbers, because I respect you, the customer (If you haven't purchased anything yet please buy something to make this label accurate) I don't want to jerk you around. I'll let the taxes do that. hah. Or! Maybe I can factor the price of the tax into the listed price and then all the customer (you) interacts with is just the price and the shipping. Damn the shipping. If I factored that in it would be weird because it is automated to give you, the customer the cheapest possible shipping price available (you're welcome). Hmmm maybe that will be the subject of another blog post.
Thanks for reading and if you find this entertaining or valuable in any way let me know with a comment! Also leave a comment if you would like to expand on this idea because I'll be the first to admit my amateurishness when it comes t.. holy shit that's a real word? According to spell check it is. weird. Where was I?
I'm a newb looking to discuss this stuff with others so discuss already and buy a mug or a t shirt or a throw pillow or something.