Recently, while walking through a local store, a shiny new blender marked down from $99 to $59 caught my attention. On the surface, it looked like a great deal!
But a question stopped me in my tracks: “Why exactly am I so ready to believe that this blender’s worth is $99? Just because the store told me? How much is a blender really worth?”
It’s a question that doesn’t cross our minds often. But maybe it should.
Let’s face it. Most of us don’t know the actual cost of manufacturing a blender, delivering it to a shelf, or staffing the store. Or forget blenders, we don’t know the actual cost of any item we purchase—be it a pair of pants, a purse, a car sunshade, or a new set of golf clubs.
We just take the retailer’s word for it.
They tell us that the blender is worth $99, but we can have it today for only $59! Or that this purse usually costs $250, but since it’s on clearance, we can own it for $109. Or for two days only, this Fire TV Stick 4K which is usually $49.99 can be gobbled up for just $22.99.
There are even entire stores dedicated to selling products marked WAY down below “Actual Retail Value.”
Basic economic principles like supply and demand have a role to play in free market pricing, certainly. But it doesn’t end there. In fact, that’s only the tip of the iceberg.
Beneath the surface, there’s an entire tangled web of clever retail strategies and pricing tricks designed to part us with our hard-earned money.
Consider decoy pricing, for instance, where a company offers at least three products: a high-priced one, a low-priced one, and one in the middle. The middle-priced product is supposed to be seen as a “compromise” choice. Customers perceive it as not too expensive, but also not of lower quality, making it the most attractive option.
Then there’s the tactic of anchoring, where a high initial price is set, then ‘slashed’ to create an illusion of value. And don’t forget charm pricing—selling something for $59.99 rather than $60.
Prestige pricing is another trick up the retailer’s sleeve. Here, higher prices are used to convey quality, luxury, or exclusivity. The $300 designer shirt you’re eyeing does more than fulfill your need for clothing—it’s a statement about your style, your status, and your personal brand. Sometimes it’s just priced higher to trick your mind into thinking its higher quality.
But do these retail prices accurately reflect an item’s intrinsic value or its manufacturing cost?
Most often, they do not. These prices are carefully crafted psychological tricks designed to drive consumption, exploiting our desire for value, status, and a good deal.
So, before you’re lured in by that “50% off” tag, clearance rack, or coupon offering $10 off if you spend $50, pause and take a moment.
Ask yourself, is this something you genuinely need? Will it add long-term value to your life, or is it the bright red “sale” sign that’s doing the talking? Is your purchase motivated by a genuine need for the item or is it a knee-jerk response to the retailer’s cunning pricing game?
Remember, if you didn’t need an item before it went on sale, you don’t suddenly need it today just because it’s on a clearance rack. Don’t let a sale tell you what you need.
Last week, Amazon congratulated itself posting its single most profitable day ever and most successful Amazon Prime Day. The two-day event saw consumers splurge an astounding $12.7 billion across the web—a whopping 6.1% jump from a year ago.
Did we really need an additional $12.7 billion in products in our homes? Or was most of the spending driven by perceived bargains and the illusion of savings, rather than an actual need or desire for the products purchased?
If we want to take back control of our resources and lives, it’s time we stop letting price tags and clever retail strategies dictate our buying decisions.
The real worth of an item shouldn’t be dictated by numbers arbitrarily printed on a tag or website. It should be determined by the value it brings to our lives.
And it’s time we, as consumers, adopt a more suspicious eye towards pricing, especially those enticing marked-down prices.
So the next time you see a slashed price on a retail shelf or an online clearance sale, pause for a moment. Look beyond the flashing red sign, beyond the “limited-time offer.” Ask yourself, “I wonder how much that blender is actually worth…”
Start to see the game for what it is and take back control of your consumption.
Aurelia says
Great article and eye-opening data shared. The tricks used in retail are no longer secret and no longer tricks, yet they still work. I was blown away by the figures, spent in 2 days by Amazon Prime. There are no words.
I’m happier with my minimalist life. It has become clearer and calmer. I don’t go for “retail therapy”. I refuse to be told by any source online what and when I am to buy. Leave the decision making to me please :)
Betsy says
I had a backpack in my cart I was thinking about. The day of the big sale it was a different price. $34.97 before the sale, $50. the day of the sale. Decision made. There would be no backpack. I’m getting better and better at talking myself out of stuff. So much bait and switch.
Lauren says
I quite enjoyed this piece, Joshua. Thank you..
I did not and generally do not participate in this annual craze but watch it with a great deal of interest. First I will not be suckered into paying for “free shipping” (plus other “goodies” in which I have no interest) just so I can have access to this sale madness. (Why do I find that insane when so many others find it necessary?)
But the pressure is amazing. I subscribe to the NYT Wirecutter because I find it interesting and often useful but I only rarely buy off their recommendations. Before and during Prime Day it goes absolutely bananas to the point where I don’t even open the multiple versions per day; it goes straight into the trash. The overwhelming onslaught is exactly l like eating candy, and nothing else, for days on end. It’s guaranteed to make me very sick.
I did recently place an Amazon order: a vegetable scrub brush (recommended by Wirecutter and carefully considered), a box of safety pins (needed for the last two years), and toothpaste. And that’s what most of my purchases have come down to–needs.
I love watching my bank accounts grow. The money I save is “spent” on those. While I do not yet have six months of living expenses, and it will take a while to get there, I do have the immense satisfaction and peace that comes with knowing that almost any emergency can be paid for out of those funds and not put on the credit card. That knowledge and that ability is worth far more to me than any Amazon discount could ever provide.
Tammy says
Overwhelming is exactly how I feel about Prime Days. I do need some new electronics and thought Prime day would be a good time to get them. But I was so overwhelmed with comparing all the prices and features that I ended up walking away from my computer not purchasing anything. In the future I will do research in advance and then look to see if what I’ve already decided on is available for less on Prime day – IF I actually still need anything by then.
Martha says
The last step in my journey to minimalism over the last 4 years is control over spending and my “need” for something new all the time. Also love that statement Purchase what you need, not what you greed.”
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Christie says
This article is spot on. We get excited about “deals”, when in fact the retailers just hike up the prices to then put them “on sale”. It’s all a game.
Denise says
Great article. I volunteer at a charity resale store and the profits all come from items people donate. The amount of barely/rarely used items that come in still amaze me. I do most of my non-consumable shopping there. Saves things from landfills as an equally important factor. I also did use Prime Day for home fixtures, pre-chosen shoes and consumables.
Brad Folkers says
Good timing.. I’m reading the exact same stuff in Dan Ariely’s book “Dollars and Sense: How We Misthink Money and How to Spend Smarter” (bought when the Kindle version was on sale for $1.99). Certainly worth the read if anyone’s interested in a deeper dive on this subject.
I did buy some stuff on Prime day. Some stuff that I needed and was nice to get on sale. An upgraded Kindle that I didn’t “need” but at 1/3 of the listed price for something I’ll use for several years was well worth it.
Awt Harper says
Thank you for your ‘taps’ on the shoulder. I now say, “Purchase what you need, not what you greed.”
Susan says
I love that saying… I think it needs to become my new mantra!
Margaret says
Yes! It does!!
Judy says
I knew a lady who worked in a factory that made black t-shirts. All the t-shirts were identical. Depending on where the t-shirts were shipped to, the price changed dramatically. Discount stores sold the t-shirts for cheap and upscale stores sold the same t-shirts for a lot more.
Alice says
Excellent piece, Joshua. I did purchase on Prime Day, but it was consumable items for my cats (food and treats) that I buy weekly. I did get better pricing on those. I did not; however, purchase ‘stuff. I will never be the reckless consumer I was less than a year ago. I came to my senses in January…or was it a miracle Universe intervention?!…and began my mission to free myself from the burden of my possessions. I’m still in shock of how much stuff I have that isn’t, or never was, used. What a waste of time and money. I’ve learned my lesson. I read your posts daily and continue on the path to my minimalism. Thank you for all the encouragement you render.