E018: How To Price Your Products. A Deep Dive Special.

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Aug 23, 2023

The podcast delves into the evolution of pricing strategies, emphasizing the importance of affordable pricing and high quality products. It discusses the process of pricing, including gross margins and price optimization. The speaker shares their experience with passing audits and proper inventory management. The chapter also explores the use of price testing and navigating early decisions to avoid costly mistakes.

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ANECDOTE

Topgolf As A Sampling Flywheel

Callaway pivoted to Topgolf, turning entertainment and sampling into their growth engine.
Topgolf functions as a massive showroom that drives equipment consideration and sales.

INSIGHT

Limits Of Cost‑Plus Pricing

Cost-plus pricing sets price from internal costs and required margin rather than customer perception.
Mike warns this ignores competitor context and psychological thresholds that shape demand.

ADVICE

Price For Gifting, Not Just Cost

Find whitespace between commodity and luxury to create a giftable, high‑demand product.
Ridge chose $95 entry price to maximize gifting and customer acquisition.

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[00:02:23] Close relationship with Callaway and Travis Matthew. Topgolf is future of company. [00:05:54] Late to market, focused on value. [00:08:33] Cost Plus pricing: Calculate costs, add markup. Weaknesses: Customer perception, competition's pricing. [00:13:32] Extensive price history, AOV increase, wallet market. [00:15:02] Gucci wallet: affordable gift with high demand. [00:18:39] Affordable premium product, strong email deliverability. Exceptional. [00:21:44] Pricing strategy: gross margin, cost optimization, discounts. [00:25:38] Failed auction website experiment reveals psychological pricing. [00:29:49] Differentiation is key in pricing strategy. [00:33:46] Audit costs and lack of systems explained. [00:37:42] Price psychology and price buckets are important. A Dutch auction maximizes revenue. Consider industry-specific price buckets for better pricing. [00:42:18] Supply and demand is real, price affects demand. Testing pricing can be helpful. Successful retailers discount. Higher pricing acquires fewer customers. Luxury brands target fewer customers. Understand who you're trying to talk to. Pricing drives customer acquisition. Lower prices can introduce people to a brand. [00:48:14] Surviving middle market through omnichannel pricing. [00:49:56] Multiples mean nothing. Factors: growth, profit, sector, supply, demand. [00:53:57] Zimmerman sold for $1.6 billion, impressive. The importance of actual money in deals. Value determined by what someone pays. [00:57:47] Think like competitors, know your value, sell. In the world of eCommerce, a legendary WhatsApp group is rumored to hold the secrets to unimaginable success. The catch? You must have nine figures in revenue to gain entry. The world's biggest brands have denied its existence for years, until now. Three titans known as "Operators" are leaking the secret contents in an effort to share their wealth of knowledge with people like you. Powered By: Northbeam. https://www.northbeam.io/ Sendlane. https://learn.sendlane.com/operators Fulfil.io. https://bit.ly/3pAp2vu Visit Our Website: https://www.9operators.com/ Follow us on Twitter: Sean (Host) https://twitter.com/SeanEcom Jason (Host) https://twitter.com/JasonPanzer Matt (Host) https://twitter.com/mbertulli Mike (Host) https://twitter.com/mikebeckhamsm Finn (Producer) https://twitter.com/finn_radford Northbeam (Partner) https://twitter.com/northbeam Fulfil.io (Partner) https://twitter.com/fulfilio Sendlane (Partner) https://twitter.com/Sendlane We Rise Together.