How Pricing Works
Where a recommended retail price comes from and what it is for
The number a manufacturer prints on the box was never a prediction of what shops would charge. It is a reference point with a job…
Charu Sanghvi
Contributing writer, Deals Ka Baap
Charu writes about pricing structure and how a discount is designed before it is offered.
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17 articles
How Pricing Works
The machine is priced against the refill it will need
When a product only works with something you must keep buying, the price on the box is a deposit rather than the cost of ownership.
How Pricing Works
Two shops, one street, one product, two prices
Identical goods sold within walking distance of each other routinely carry different prices, and the reasons are structural rather…
How Pricing Works
Markup and margin are different numbers and shops think in one of them
The same price expressed as a markup and as a margin produces two very different percentages, and confusing them makes discounting…
How Pricing Works
A loss leader is an advertising budget spent through the till
Selling something below cost is not a mistake or a gift. It buys a visit, and the visit is what the seller is actually purchasing.
Household Spend
Own-label tiers are built as a price ladder
Value, standard and premium own-label ranges exist to occupy price points. Reading the ladder tells you where a category has room…
Household Spend
Why the same bill costs more depending on how you pay it
Payment method, frequency and channel all carry costs for the biller, and those costs are frequently passed on in one direction or…
How Pricing Works
A price rise can arrive as a smaller pack
Quantity sits on the same shelf as price, and moving it produces a rise that most shoppers never register.
How Pricing Works
Some prices can move and some cannot, and sellers know which
How far demand falls when a price rises decides which items get pushed up, which get discounted, and which never change at all.
How Pricing Works
The exchange rate moved months ago and the shelf has not heard
Imported goods are priced from the rate a buyer locked in long before the stock arrived, not from the rate on the news today.
How Pricing Works
Costs go up like a rocket and come down like a feather
Input prices fall as often as they rise, but the tag rarely reflects both movements with the same speed or the same enthusiasm.
How Pricing Works
Free is a price, and it behaves like no other number
Dropping a charge to nothing does not simply reduce it a little further; it changes how the whole offer gets judged.
How Pricing Works
When every shop shows the same number, something upstream decided it
Identical prices across unrelated sellers are rarely coincidence, and the reasons run from the entirely ordinary to the legally…
Household Spend
The excess is the part of the risk you agreed to keep
Insurance pricing is a trade between what you pay every year and what you pay when something happens, and the two move against each…
Household Spend
Fixing a rate buys certainty, and certainty has a price
A fixed price for a household service is not a prediction that prices will rise; it is a charge for removing the question.
Household Spend
Charges small enough to survive every review you do
A recurring amount below the level at which anybody investigates can persist for years, and that threshold is a design…
Household Spend
The household paying twice for the same thing
Overlapping services accumulate quietly when several people arrange their own, and nobody is looking at the household total.