The $3 Sunglasses Problem
No matter where you look, the same “thing” is sold at a wide range of prices.
There is no such thing as a single “right” price.
What’s the right price for a down puffy coat?
$3,000 from Bogner
$300 from Patagonia
$30 from Target
Which one would you buy?
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What’s the right price for sunglasses?
$300 for Ray-Bans
$30 for Goodr’s
$3 from a NYC sidewalk
Do you prefer cheapies because you lose them fast, or expensive ones because you appreciate style and visual clarity?
…
What’s the right price for water?
$1,300 for Fillico jewelry water
$13 for Vitaminwater
$1.30 for Costco/Kirkland
$0 from a fountain
Same hydration. Wildly different prices, including free.
…
Markets don’t settle on one “right” price.
Markets support multiple prices at the same time, for multiple segments of the marketplace.
Low prices don’t mean buyers can’t pay more.
Low prices are designed to capture a specific segment of the marketplace.
Full-price buyers already exist in every market.
They just don’t shop in the bargain aisle for that particular thing, at that particular time.
…
When Bonny raises her prices, it’s not just to ask people to pay more for the same thing.
It’s also to signal to new buyers who her product is for, and to give higher-price buyers permission to choose her.
Pricing is never just about the number – it’s about who you’re inviting in and what kind of firm you’re building.
It’s what we work on inside Peak Freedom.
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