How Pricing Works
Cost-plus and value pricing put two different tags on one object
A price can be built up from what the thing cost to make, or worked backwards from what a buyer will part with. The two methods…
How Pricing Works
Margins, anchors, list prices and where the number on the tag comes from.
21 articles · updated August 11, 2026 · page 1 of 2
How Pricing Works
The anchor price still works after you have named it
Knowing that a crossed-out number is a persuasion device does not switch off the comparison it starts in your head.
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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…
How Pricing Works
Prices ending in nine outlived the reason they were invented
The nine on the end of a price is one of the most tested devices in retail, and the popular story about where it came from is…
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
One product, three prices, and why that is the design
Charging different people different amounts for the same thing is not a glitch in retail. It is the reason ranges, coupons and…
How Pricing Works
Landed cost: the number a shop is actually working from
The price a retailer pays a supplier is only the start of what the item costs before it reaches a shelf. The gap explains a lot of…
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
Dynamic pricing is a rule somebody wrote in advance
Prices that change through the day are not being adjusted by a person watching you. They are the output of conditions set before…
How Pricing Works
Good, better, best: what the middle option is for
Three-tier ranges are not built so you can find your level. They are built so the middle one looks like the sensible choice.
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
Every price contains the cost of the stock that never sold
Full-price shoppers pay for the markdowns, the returns, the theft and the damaged cartons. That is not a scandal, it is how the…