Usually for some businesses such as companies that sell tickets for event one would usually start to offer heavy discounts if sales aren’t going very well. Because if things are going well why earn less and some even raise the prices based on demand. This is what got me thinking as I kind of saw two companies use a different approach but ended up making similar money.
There was one business that needed to sell tickets and so right from the beginning there was a huge discount such as $30 tickets literally selling for like $10. They were getting good reactions too to the point where they were selling out. Once they sold through about ninety percent of their inventory they started to raise prices. Sometimes even as high as $60 per ticket. It would appear that there were people that bought it as they wanted to attend and there weren’t many tickets left. So the fear of missing out came in.
The other company did the more traditional tactic of trying to sell at standard or high markup price hoping to take advantage of all the people who absolutely wants to be there regardless of cost. With that strategy, they didn’t sell much due to the high price and eventually they had to drop it to a very low price in order to try and sell what they can as it was better than not filling capacity. Financially, both companies ended up with almost the same results. But it’s interesting to see the two paths that one could take in these instances. If you are a brand new business then it kind of makes sense to have the heavy discount first as this will give you the security of knowing you have the basics covered to then be able to sell at a premium afterwards without much stress.
If you are a bit more establish then it would make sense to not give a heavy discount first. Reminds me of say crowdfunded companies that don’t have the resources of a large company where providing a heavy discount to secure funding early can help them to then takeoff afterwards more comfortably.