Beyond Cost Plus Summary: December 2015

"Free" is powerful, and when we start thinking, even hoping, that something might be free we can start to act irrationally.

Businesses know this, and are keen to exploit it. They'll jump through hoops and stretch the truth so that they can present their product as "free".

Unfortunately very few things are really free, and "free" usually just means a different pricing model. And often a pricing model that will ultimately be far more expensive than traditional pricing models. This is why the seller is so eager to exploit the magic allure of "free".

A post this month looked at "free" floral websites that are trying to compete with more established vendors of websites for florists. It shows very clearly that these websites are not free – in fact they are probably the most expensive website a florist can ever get.

Two other posts looked at "stealth" price increases – the practice of effectively raising prices by decreasing quantity. That empty space at the top of the can, pouch or box? It's referred to as "slack fill", and it probably means that the seller is charging you the same amount for a little less... and hoping you won't notice. Consumers are generally more sensitive to price than volume so it often works.

But not always! Sometimes aggressive stealth price increases do get noticed and cause a lot of resentment.

Both of these posts also discuss stealth price increased and the flower business.