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Price Isn’t Cost

February 2017 Product, Selling

Once the investment is made, its cost no longer factors into the marginal cost of producing a product. Fixed costs are an important part of a go-or-no-go decision for a company at the onset of production, but should not factor into the price of a product going forward. Fixed costs are sunk costs.

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Pricing Cannabis Gummies

January 2017 Product, Selling

Different consumers care about different things. Some will care that their THC-laced gummies have fewer other chemicals, some won’t. But the ones that do are probably willing to pay a premium for those products. We certainly see that in the organics aisle at a grocery store. Why would cannabis products be any different?

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You Get What You Pay For

September 2016 Corporate, Product

One of the strongest arguments against advertising as the primary method of monetization is that you pay with your time and attention, which is a resource both finite and irreplaceable. Services like Spotify aggregate hundreds of labels on one easily accessible interface and payment system.

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How Can the Music Industry Bridge the Gap Between Physical and Digital Experiences?

August 2016 Marketing, Product

We’re visual creatures, too. Whereas programs like iTunes and Spotify will display album art, it’s not the same experience as standing before a rack of albums. Similarly with books, despite all of the advantages of e-readers, they have not captured the experience of examining a wall of books. Digital is great, but, unsurprisingly, there are features of the physical world that still have a certain primacy for, well, physical beings:

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Tesla’s Software Upsell

July 2016 Product, Selling

What Tesla has changed for the automotive industry is now that upselling process can continue long after the purchase of the vehicle. If you buy a S60 then get a better-paying job with a longer commute, you can choose to upgrade with essentially no additional cost to serve for Tesla. And spacing out the payments for the vehicle and later the capacity may make the original vehicle purchase more palatable for the consumer.

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Why is Gas Priced by Fractions of a Cent?

April 2016 Pricing, Product

The fact that consumers buy gas on a continuum rather than in discrete gallons (unless you’re a wizard with the gas nozzle handle) likely makes it easier for both sides to live with the current arrangement. The pump price and volume numbers go along until the tank is full or you release the handle, and there perhaps isn’t much analytical thought put into the final ratio that appears.

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About the author

Kyle Thompson-Westra is a Consultant at Wiglaf Pricing. His background includes digital strategy, marketing analytics, and international relations. He holds a BA from Tufts University and an MBA from DePaul University.

Kyle Thompson-Westra
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