The Notion of Charging What People Will Pay For

The Notion of Charging What People Will Pay For

Today I was talking to a person who’s business is very seasonal where all of his customers usually come around this time of year when the weather gets hot. The interesting thing was because he knows he will get more customers he tends to price his products higher as well. At first I was asking if this was simply due to a supply and demand scenario which made sense to me. However, he said no as it was simply based on the notion that for some reason people are willing to pay the higher prices as during this time of the year if they want to buy something then they will. Therefore, he may as well get more profit.

I was just thinking that must feel a little strange. For example, imagine doing something like offering an E-book where you originally sold it for a certain amount and because you know there is going to be an influx of customers then suddenly you increase the price. Like in this case, it didn’t really require you to do anything more or less. This is one of those things where probably a big shot would say you would be silly not to increase the price if you knew people will pay for it anyways.

However, I tend to think at this day and age information and can easily be found and if people are more aware of a company’s pricing tactic like this that the negative publicity from that is probably not going to be worth the few extra dollars you made. Unless this wasn’t exactly a long term business as you are simply looking to get in and out really fast I suppose. I personally think in a situation where if it doesn’t have anything to do with say an increase cost in doing business that your pricing should be fairly consistent as I know from a consumer point of view the word of mouth can end up costing the business more sales if people perceive it as like price gouging.

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