I commented this week that if an item sells really well, it is probably priced too low. The reverse is also true. There are no bad products, only products priced wrong!
Is this really true?
Part 1: if an item sells better than expected, the perceived value is bigger than expected, which should show in the pricing analytics. Demand > expected demand is a pricing signal… Giving away profit. (assuming of course elasticity supports this, and new retail X lower units is better than old lower retail X original units.) If not true, then the signal is wrong.
What about the reverse, the part 2? If an item sells worse than expected, can’t we just lower the price until demand is where it should be? Hmmm. Unless it is not profitable, in which case it was a bad product, bad timing, bad presentation even- and pricing is not the (only) issue.
When you run out of pretty, ugly sells?
But, how do you know what the right price is to start? What if your comparison items are wrong too? Comparing to competitors? We KNOW we are smarter than those guys!
Perception. Where is day 1, and where will day 2 end? The route to success can not be short-cut.
Note: Athena was the Greek Goddess of wisdom, justice, math… and war. Is the connection that direct between wisdom and war? Perhaps the natural order, linear context, direct path … Next, let’s look at some SunTzu – Art of War. Always some fun things to discuss.
-That Planning Guy