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Matt Douglas, Founder and CEO of Punchbowl.com

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Stupid Pricing

As an entrepreneur, one of the things that bothers me is when I see another business using stupid pricing.

Let’s start with a simple example. Most pizza shops charge additional for each topping you want on your pizza. But many times, I’ll order a pizza that is half one topping and half a different topping. For simplicity, let’s say that I want a 1/2 mushrooms and 1/2 green peppers pizza. There are far too many pizza shops that will price this pizza as two toppings. But isn’t it really just one topping? If the cost of goods is (roughly) the same to the pizza shop, then why am I being charged for two toppings? Are mushrooms really 2x as as expensive as green peppers? I don’t think so. It’s just stupid pricing.

Sometimes stupid pricing comes in the form of a credit on your bill. DirectTV is an abuser of this kind of stupid pricing. They make it very difficult to see the actual price you’re paying for the service. Instead, there are a bunch of charges, and a bunch of credits. Just tell me the price Direct TV. It’s ok.

Contractors are notorious for stupid pricing. A few years ago, I went through the process of getting a quote for a major project to be done on my house. The quotes were all over the place — it was as if each one of the contractors had an initial price in mind and simply used the quote as a way of justifying the original number. There was one quote that was literally 5x higher than any other quote, and it was full of mistakes and errors. It’s too bad, since we liked the person. Stupid pricing.

For contrast, have you ever thought that Apple’s pricing was stupid? You might not like the price, but at least it’s clear. I know exactly how much it costs to buy a song on iTunes, and the pricing for computers, iPods, and iPads is clear. Each price increase gives you additional capabilities. It’s this simple pricing that helps make Apple a consumer-friendly company.

One more note about simple pricing. It’s too bad that Saturn made such inferior cars, because their pricing scheme was really a breath of fresh air for the auto industry. The first car I ever purchased was a Saturn SC2, in part because I liked the no-haggle, no-bullshit approach of Saturn.

Pricing is something I think about a lot for Punchbowl. Even if you don’t like the pricing, I hope you’ll agree that it’s clear, and not at all stupid.

Can you think of other examples of stupid pricing? Please share your thoughts in the comments.


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©2019 Matt Douglas