Imagine you’re starting a new business as a cat and dog photographer. So as the first step, you head to Amazon to check prices on DSLR cameras.
Hm. That Canon EOS Rebel you’ve been eyeing is priced very reasonably.
In fact, the price on Amazon is cheaper than at the specialized photography equipment website… and at your local brick-and-mortar photography store… and even at Walmart.
But here’s the trick.
I didn’t know about it until today — maybe it won’t be news to you — but of course Amazon gets its own back.
According to an analysis by Boomerang Commerce, Amazon dynamically reduces prices of its most popular items to make you think you’re getting a good deal.
That’s why something like a popular DSLR camera is cheap on Amazon.
But at the same time, Amazon dynamically jacks up the prices of less popular items — cables, lenses, carrying cases — that you are likely to buy with your main purchase.
End result?
You feel you’re getting a deal. Meanwhile, Amazon sits there quietly, with that trademark smirk on its face.
“Meh,” you say. “That’s nothing special. Businesses have a right to manipulate their prices however they want to maximize profits.”
I don’t dispute that.
My point is simply — well, actually, it’s not my point. It’s the point from the people at The Atlantic. They made the video I watched today, which clued me into this Amazon pricing stuff. And the video summed it up like this:
“People used to think the Internet would usher in this new age of transparency for pricing. But really it’s just given retailers new ways to manipulate the same old fundamental bias: People don’t know what anything is worth.”
Marketer Rich Schefren likes to say that marketing is getting people to value your offer.
I used to think that means sharing enough information for your prospect to see what your offer is truly worth.
But people don’t know what anything is worth. No amount of information will help them see the “true” value of your offer.
When you understand this, then Rich’s koan takes on a whole new level of urgency and meaning.
Suddenly, positioning becomes the most important decision you can make.
Because if you can put yourself into a marketplace of one… and given that people don’t know what anything is really worth… well, then you can manipulate the prices of your own offers how you like. And you don’t even have to be sneaky like Amazon about it.
So how do you get yourself into that magical marketplace of one? That’s something I write about on occasion in my email newsletter. If you’d like to read what I write about it the next time, sign up for my newsletter here.