503-785-3485
bill@conerlyconsulting.com
  • Facebook
  • Twitter
  • Linkedin
Conerly Consulting Conerly Consulting
  • Consulting
    • Approach/Philosophy
    • Sounding Board
    • Economics and Business Strategy
    • Assessment
    • Case Studies
    • Testimonials
  • Speaking
    • The Package
    • Topics
    • Testimonials
  • Writing
    • Businomics Newsletter
    • Businomics
    • The Flexible Stance
    • Blog
  • Industries
    • Banking/Finance
    • Manufacturing
    • Other Industries
  • Video
    • Speaking
    • Event Promotion
    • Business Planning
  • About
    • News Coverage
  • Contact
  • Consulting
    • Approach/Philosophy
    • Sounding Board
    • Economics and Business Strategy
    • Assessment
    • Case Studies
    • Testimonials
  • Speaking
    • The Package
    • Topics
    • Testimonials
  • Writing
    • Businomics Newsletter
    • Businomics
    • The Flexible Stance
    • Blog
  • Industries
    • Banking/Finance
    • Manufacturing
    • Other Industries
  • Video
    • Speaking
    • Event Promotion
    • Business Planning
  • About
    • News Coverage
  • Contact
  • Home
  • Books
  • Many Prices for One Product

Books

27 Dec 2010

Many Prices for One Product

  • By Bill Conerly
  • In Books, Business Strategy, Economy
  • 2 comments

The Christmas tree included a great book that got me thinking about the economics of pricing. No, my family did not bless me with an economics text. However, my son Peter gave me a delightful book, The Man Who Loved Books Too Much: The True Story of a Thief, a Detective and a World of Literary Obsession. The title pretty much says what the book is all about, but as I learned about avid book collectors, I started wondering about rare editions of my favorite books.

My first searched turned up a first edition of Adam Smith's the Wealth of Nations, priced at $150,000. That's a bit out of my budget for a single book, even one printed in two volumes.

Wealth of Nations

A wider search for the Wealth of Nations turned up a much more affordable fifth edition, printed in 1789 (rather than 1776 of the first edition) and priced at only $6,500. That may sound like much, but it's actually affordable to many people, if only they made it a priority. The Survey of Consumer Expenditures shows that the middle quintile of households spends an average of $2,106 on entertainment goods and services. That fifth edition Wealth of Nations would require a few years of savings for an average family, but it is within reach if the desire is strong enough. There's also pure entertainment in some of the other categories of consumer spending. My car has heated leather seats, which aren't really a necessity. Similarly, our spending on housing and food includes plenty of luxury purchases mixed in with some necessities. So a middle income family could afford that book if they scrimped and saved across their budget.

I looked at my trusty copy of Wealth of Nations, which I purchased used many years ago for $4.95. It's a nice hardback Modern Library edition. I don't know when it was printed, but the introduction is copyright 1937. Similar volumes are selling on Amazon for about $10, so I've double my money–but over 30 years or so, I would guess. Not a great ROI.

When I want to grab a quote from Smith, though, I don't turn to my bookshelf. Instead I go to the Libary of Economics and Liberty online, which has a searchable copy–for FREE!  I can search, then copy and paste a quotation into my word processor. That's far better functionality than a physical book provides.

The Christmas tree also had under it a Kindle. I was able to get a free Kindle version of the Wealth of Nations, so I could take it with me on travels without lugging a heavy volume around.

So, what does The Wealth of Nations cost? Correct answers range from free up to $150,000. That may sound a little "soft" to you mathematical types, but it reflects an important point with significant business implications: different consumers have different desires and motivations associated with the purchase of a seemingly identical good or service. Those different desires and purchases can translate into different price points.

For example, a round a golf is, for some people, primarily a social experience. For others, it is the challenge of a difficult physical activity. For yet others, it is something to occupy oneself on an otherwise boring vacation. One activity, three different purposes. Possibly three different price points. Don't get caught up in the idea that your product has only one value. It's worth differing amounts to different people. Take that into account when devising pricing strategies.

  • Share:
Bill Conerly

    Comments

  1. Stan
    January 11, 2011

    I agree. A gallon of gas is worth $3 in town, $4.50 at the “last chance filling station” located at the desert’s edge, and $50 if you’ve run out along the side of the freeway.

  2. Todd
    January 12, 2011

    I did an interesting experiment a few years back with this very idea.
    I had a garage sale that lasted two weekends. I split half of my garage sale items up randomly and attempted to sell half of the items on different saturdays.
    The first saturday I told the customer what I wanted for the item when they asked (too lazy to write price tags). The second saturday I let the customers chose the price (as long as it was above my price floor I accepted).
    I made close to twice as much on the second saturday. I figured it would be a way to almost exactly price discriminate. The customers often valued the item more than I would have sold it for. Obviously I did not have a very high value or I wouldnt be selling it at a garage sale.
    Interesting backyard economic experiment!

Comments are closed.

Search

Sign Up For Our Newsletter!

View Latest Issue

RSS Bill’s Forbes Articles

  • Inflation Has Not Shown Up Yet, But It’s Coming February 25, 2021
    Inflation is muted, but not for long. Inflation is coming in the next two years, then will be followed by a boom/bust business cycle, or maybe two.

Testimonials

Dr. Bill Conerly opened our Ace Hardware Platinum Retailer Conference by helping our independent small business owners understand the current state of the economy in a straight forward and humorous manner that connected very well with the retailers I spoke with. Dr. Conerly provided information our retailers can use to lead their businesses. He connected with the audience and made a complicated topic understandable.
Mike Berschauer, Ace Hardware Corp
You are a master at your craft and a favorite of our audience.
Jim Parker, UBS Financial Services
Thank you for a wonderful presentation. Everyone who heard your presentation was impressed with your analysis, and strong command of facts and theory. More importantly, your ability to weave together substance with humor, in a very dynamic way, meant our attendees learned and retained more information than we would have typically expected. You made economics fun and you left our members with powerful insights on trends and issues to consider as they prepare for the future.
John Aguirre, Oregon Association of Nurseries
You made a complicated global picture understandable. I have received many favorable comments from those in attendance. I frequently heard comments like ‘Now I understand’ or ‘Wow, now I get it’ and ‘He was great to listen to. Thanks for bringing Bill to our meeting.’
Pete Van Sickle, Idaho Department of Lands
Every time you spoke, we got business.
Chris Rasmussen, Washington Trust Bank, Bank of the Northwest
We asked Bill Conerly to look at one of the major factors limiting the growth of our business. He pulled together data from a wide range of sources, as well as his own extensive business knowledge, to give us an insight into when conditions would improve and how we could be ready to capitalize on better times. He did so in a straight forward, easy to understand manner. A year later it was clear that things had evolved just as he had forecast. Ever since then he’s been my go-to guy on how the e…
Len Ludwig, former CEO, Vencore Capital LLC
Bill’s presentation was neatly balanced…rich with content.. and our audience really enjoyed his humor.
Bing Sheldon, SERA Architects
Bill Conerly has been an invaluable resource to our executive team and ownership by delivering superior, well-founded ideas that are critical to navigating the current economic climate within the construction industry. Bill assisted O.B. Williams Company with developing a strong business plan that we implemented 18 months ago. As a result and together with Bill, we are improving our position within our highly competitive market segment. We understand that navigating this current economy is indee…
David Wick, CEO, O.B. Williams Company
Bill did a great job. We look forward to a continuing relationship.
John Hamburger, Franchise Times
Bill Conerly is one of the most interesting and engaging speakers I have ever heard. The fact that he is a very funny man is a bonus.
James A. Kronenberg, Oregon Medical Association

Get in touch

(503) 785-3485

bill@conerlyconsulting.com

PO Box 2188
Lake Oswego, OR 97035

Useful Links

  • Consulting
  • Speaking
  • Videos
  • Blog
  • Press
  • Contact

Social Links

  • Facebook
  • Twitter
  • Linkedin

Newsletters

Copyright 2020 Conerly Consulting LLC