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If it makes you think pay $1.99. More pay(ne) will mean more gain.
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Friday
Apr092010

selling using the lego principle

Any parent proud of his or her IQ must wince and squirm when facing the prices charged by Lego.

Lego, especially outside the US, is incredibly expensive. A kit to make a small space pod or tracked vehicle will cost $20 or more. But all the cheapo copies of Lego are useless. I know because I started to buy them and discovered there were always a few bits that didn’t fit. I began to really appreciate the very high quality of Lego and its ongoing inventiveness. I played with Lego as a child and it’s better now. I now feel good, almost, when I spend big amounts on Lego kits. I feel I am buying something really worthwhile and lasting. Crazy? Maybe- but what is monetary value except the value we arbitrarily give to something? Scarcity makes things expensive- but it changes not a whit the real value of something. If Lego halved in price it would still be great- but maybe I wouldn’t have looked so carefully at it and consequently appreciated it so much.

If you are worried what you offer is too expensive remember we live in an abundant world. If people want what you have to offer they can always find the money from somewhere. And the more they pay the more they will FIND value in it. Experiment with the Lego principle: the more you charge the more people will discover the hidden value in what you sell. This is different from snob value, I'm not proud of my kid's lego in the way I might be proud of a Montblanc pen (which are inferior to Sailor pens from Japan I might add). It's not like designer perfume which loses perceived value when it is lowered in price. What interests me beyond the great microeconomic example of how a monopoly (kind of) can charge what it wants, is the way I have psychologically come to terms with paying insane sums (80USD once for a kit my son made in minutes. minutes!) for small bits of plastic. It's like those penniless villagers from upper Egypt who somehow get $5000 together to stow away on a leaky boat to Italy. Even a 'wealthy' westerner like me thinks that's a ton of money for a one way trip in the hold. When you have decided that you need this thing you'll pay. I think maybe that when pricing something to sell you shouldn't even consider the purchasers capacity to buy, the size of their purse, their income. You should focus entirely on increasing their desire. Certainly when I've been 'sold' that's what happened.

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