E-Commerce Resources For Artists & Crafters By The Liberty Jane Clothing Team
This is a continuation of our Pricing Power – 10 Proven Pricing Principles posts. See the prior post, #1, #2, #3, #4, and #5 here.
Principle #6 – Willingness To Pay Is Influenced By Time & Place.
[ This post has been truncated so that the full collection of pricing principles can be placed on the Kindle platform as Craft Pricing Power. For the spring of 2014 you can download it for free on the last Friday of every month. Get it here. ]
This is a continuation of our Pricing Power – 10 Proven Pricing Principles posts. See the prior post, #1, #2, #3, and #4 here.
Pricing Principle #5 – Your Price Can Vary Depending On How Presold Your Prospect Is. If your prospects are eagerly awaiting your new product, then you can charge a lot more than if they aren’t familiar with you or your product.
[ This post has been truncated so that the full collection of pricing principles can be placed on the Kindle platform as Craft Pricing Power. For the spring of 2014 you can download it for free on the last Friday of every month. Get it here. ]
This is a continuation of our Pricing Power – 10 Proven Pricing Principles posts. See theprior post, #1, #2, and #3 here.
Pricing Principle #4 – You’ve Got To Align Pricing & Business Goals.
[ This post has been truncated so that the full collection of pricing principles can be placed on the Kindle platform as Craft Pricing Power. For the spring of 2014 you can download it for free on the last Friday of every month. Get it here. ]
This is a continuation of our Pricing Power – 10 Proven Pricing Principles posts. See the prior post, #1 and #2 here.
Pricing Principle #3 – You’ve Got To Align Your Pricing Strategy With Your Marketing Strategy
[ This post has been truncated so that the full collection of pricing principles can be placed on the Kindle platform as Craft Pricing Power. For the spring of 2014 you can download it for free on the last Friday of every month. Get it here. ]
This is a continuation of our 10 Proven Pricing Principles articles. If you missed the first principle, (You Need A Pricing Strategy), read about it here.
Pricing Principle #2 – There Are No Winners In A Price War!
[ This post has been truncated so that the full collection of pricing principles can be placed on the Kindle platform as Craft Pricing Power. For the spring of 2014 you can download it for free on the last Friday of every month. Get it here. ]
Hi everyone,
Happy 2014! I hope you are ready to have a fantastic year!
In December I polled our Liberty Jane Partners (roughly 1,300 people) and asked them what topic or issue they wanted me to focus on more as I work on blog posts and ebooks.
The topic that got the strongest vote was – pricing. So I’m finishing up a brief ebook about it. But rather than just publish the ebook, I thought I’d put out the entire thing and ask for your feedback & commentary. Then when all the chapters are released – I’ll consolidate all of it into an ebook, (which I plan to give away for free).
So – here is the introduction and the first principle. Over the next few weeks I’ll put out all 10 principles for your review and input.
Pricing Principle #1 – You Need A Pricing Strategy. There are three common strategies to choose from.
[ This post has been truncated so that the full collection of pricing principles can be placed on the Kindle platform as Craft Pricing Power. For the spring of 2014 you can download it for free on the last Friday of every month. Get it here. ]
In Priceless: The Myth of Fair Value (and How to Take Advantage of It)
By engineering the context he means creating a context in which a $300 purse seems like a good deal. How do you do that? You set it next to a $2,400 purse. The $2,400 purse is the anchor, the $300 purse is the one they really wanted you to buy all along.
He goes on to say:
[Prada] paid over $1,700 per square foot for its Rem Koolhaas designed store in SoHo and is forking over equally stratospheric rents. It would not devote floor space to goods that hardly ever sell unless there was a reason for it. Trade-off contrast, (the system of setting a high priced item next to a low priced item), is part of the cost of doing business… It’s not unusual to find items similar to the high-priced anchor selling for a tenth as much. Anyone who can’t swing that can always try the $300 sunglasses. Or the $110 mobile phone charm.
What exactly is anchoring in the context of pricing? It was first described by two ‘behavior decision’ theorists named Amos Tversky and Daniel Kahneman. They described it like this:
“An initial value (the anchor) serves as a mental benchmark or starting point for estimating an unknown…” The unknown is the true value of an item.
Do you have an anchor? Can you create one? It might be a wise strategy.
Remember we said we think eBay has ‘treasure hunters’ and ‘bargain hunters’? And you want to appeal to the treasure hunters, right? Well, when it comes to pricing your items, there is a huge concept that really governs this whole idea.
Economists call it rival versus non-rival goods. It sounds fancy, but it’s pretty simple really.
It’s true, we don’t like selling items for fixed prices, aka ‘buy-it-now’ prices. Especially on Ebay. But please realize, everyone is different and what does not work for us, might work great for you. You really have to decide what’s best for you, and your situation. If our viewpoint is helpful – great! If not – no worries – you really don’t have to listen to us, (but if it’s helpful – great).
Our aversion to fixed prices has to do with 3 issues.
What is an auction?
One way to look at it is as a “Price Discovery Game”. Nobody knows what the final price will be, and together you’re all committing to participate in the process to find out. The more information that is revealed to bidders, the stronger their bids will be, and the higher your auction will go.