If You Can’t Sell Something, Double the Price?

Here’s an interesting idea: if you are having problems selling a good product, don’t slash your prices, double them. People are more likely to respond to the perceived high value than a decrease value of the product.

I was just reading a great book, Influence – the Power of Persuasion. It is a great book with some good insights into the psychology of persuasions. I love books that explain human behavior, especially when it’s counter to what most people would expect.

Double The Price To Clear the Inventory

There was a story in the book that the author recounted about a friend who owned a jewellery store. The author had some turquoise pieces that she could not get rid of no matter what she did. She eventually got so frustrated with having the jewelery taking up space that she left a note for one of her employees before she left for vacation, asking her to sell everything for 1/2 price. Unfortunately, the employee misread the note and thought that the owner wanted to double the prices of the jewelery. But a strange thing happened – when the owner returned, all the inventory was gone.

The jewelery stored catered to tourists on vacation who didn’t know much about turquoise. They saw a high price on the jewelery and jumped to the conclusion that it must be high quality. They based their decision on the quality of the product by the price of it.

This is not an uncommon occurrence – it’s a shortcut that we humans take. Instead of learning all about turquoise jewelery – what is a normal price, what determines good quality, etc., people trust that an expensive price equals high value.

This Does Not Always Work

This doesn’t mean that you can go out and double the price of anything that you sell. For example, if you sell website hosting service and you tried to double your prices, you would lose a lot more revenue than you would gain. There are a few conditions that have to be in place for this to work:

  1. Your product is not a well-known commodity. If you sell bread or milk or TVs, you won’t be able to increase your prices. Your product is almost identical to your competitors and your customers will know enough about the prices to realize that your prices are too expensive.
  2. Your product is of good quality. Remember, the key is that consumers expect high quality for high prices. If you sell an obviously shoddy product (e.g. – obviously fake or bad turquoise), you will end up with an angry customer base. You might be able to make a few sales but this is not a business model that will last.

There are other benefits to doubling your price: You have less customers to deal with, which means less headaches and less overhead to deal with.

The real benefit, though, is that you can differentiate your product. The very fact that people will pay high prices, means that they stop seeing it as an everyday commodity – bingo! If you can differentiate it, you set the price level.

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  1. Paul Kevin says:

    Diff approach….not bad

  2. Almost sounds like the cheap doesn’t always sell well. Most people know that when they price their products cheaply they prepare for massive sales and profits.

    Unfortunately that is not always the case. See what Apple is doing with their products? Expensive but selling like hot cakes (in certain seasons).

    Thanks for this.

  3. If you believe your item is worth it and stand by that price, someone will buy it. I knew this guy once that sold cars. He didn’t own a dealership or anything, just bought cars from around the area. If he saw one for sale, he would offer to pay them 1/2 of what they wanted. He heard the word NO quite a bit but then again, he also purchase quite a few cars that way. That was an example of doing the opposite of what this article says but if you put them together, you can make a killing. Buy for 1/2 and sell for double the original price. Good luck!

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