0.02 shy

It's not a ploy to get you to spend more. It's a price competitiveness issue for new customers. If you have products in the Google Shopping feed, and you are $20 and someone else is $19.99, then the new customer will go with the other supplier instead of you. It's stupid, but that's just the way people's brains work. I would love to have even numbers for all the products, but then we lose sales with new customers who don't know who we are. We have tested it out. It's a real thing. Everyone here on /r/NootropicsDepot is going to buy from us because you know who we are and what we are doing. New customers are not exposed to that info till later. To even get them to click on your product and get a chance to learn who we are, we have to at least play the bare minimum of the game to get them to do it. Like it or not, people treat $19.99 as different than $20 when they are comparing products online. If we ignore that real mental situation, then we just lose new customers for no reason. You have to understand the mental thought process of people who are looking for a product, but have no experience with us. They have no way to value what we are doing, so they price compare in a very high-level fashion. If they see a ton of products that start with a $1, and yours starts with a $2, they don't even stop to assess. They just skip over you. It's dumb, but it's just how it is. Once you get them to come to your site, and they start actually researching who you are, then you can help educate and build that relationship. If they never click on your product? Well you never get that chance.

People need to decide on which hills they want me to die on. There are many that I can take a principled stance on. If we set everything to even numbered pricing, and new customer acquisition drops 30% because of it, is that a win for everyone? Does us losing out on gaining new customers because of 1 cent justify it? Contrary to what people might think, at no point does anyone on my team think of ways to trick people into buying more. The closest we get is upselling in a cart with an extra % off of a product to get people to try it; like we are doing right now with 10% off Microzinc. That's usually because we think it is a cool product, and getting more people to try it is good. That's Microzinc's case. Sometimes it is because it is a slow seller, and if we don't get sales velocity up on it we might have to drop it as a product. That's Pomella's case. However, we never try to price things as a "gotcha" to force them to get more. It's not something that pops into my head, and I speak with my marketing team every day as well. Trust me, it's not something that pops into theirs heads as well. Sometimes we even lower the price a bit from where we actually want to be just to get it below that threshold. So let's say we calculate costs and margins, and we really need to be in the $21/$22 region. Well we have lots of data showing sales to new customers are going to be affected negatively by being in the $20 region than the $10 region, so we will actually lower it to $19.99 and take a hit on the margin because we know the total sales will make up for it. We also consider that people will most likely add something else to their cart as well, so we can justify taking a margin hit on on that one product. So you all benefit from this stupid pricing thing in many cases, too. It's just not obvious on the outside, because we don't really talk about it.

Now one hill I have been willing to die on is price consistency. There is also a lot of good data out there showing that constantly changing pricing increases sales, too. This is why you see prices for many products on Amazon changing daily, or even hourly. They have bots that adjust pricing on the fly based on algorithms. I absolutely hate that shit. Price consistency is something that I value very much, so that is a hill we will die on. We set prices and keep them there as long as we can make the margins work. This is absolutely to our detriment. We would make a lot more money if I implemented a system to have bots change pricing on the fly. There are whole companies that specialize in it. However, that is a step too far, in my opinion. When I buy something for $19.99, and then I go back the next day and see it for $17.89, I get upset. On the same token, if I buy something for $19.99 one month, and it has gone up to $21.49 the next time I need to order it, I get frustrated and sometimes skip buying it altogether. I value consistency, so we maintain consistency as much as possible. This also means that we absorb most of the fluctuations in changing raw material costs. Raw materials don't just cost the same for us every time. They fluctuate a lot as well. We often absorb price increases that happen over time, in the interest in maintaining consistency in pricing. Only once the raw material increases get too high for us to make the numbers work do we even consider adjusting our price. We discuss the details about the price increase, and if we think it is temporary or permanent, and then make a decision from there. Sometimes we have a big price increase, but we know it is only a temporary 3 month thing, so we keep the pricing the same with the understanding that it will normalize in a bit. So we eat the margin hit to keep it consistent. If we think it is a permanent or long-term price increase, then we consider the decision to increase. Then a price change proposal sheet gets created and passed to various people on my executive team to sign off on. I am always the final sign-off on it. I take price increases very seriously, and we only do it if we have to. Many times that is very much to our detriment.