Captain’s log, stardate 20220507
In the US at least, the vast majority of things for sale have a displayed price on them, and that price was set by the seller.
In the vast majority of cases, the price is not up for negotiation.
In the vast majority of cases, there is no way for the buyer to hold a reverse auction.
If you see a particular pair of sneakers in a Target that have a price tag on them that says they are $35, that price is essentially just as much an immutable property of that pair of sneakers as the size or the color.
This is why it makes no sense to me to talk about a fair price. The price is the price, the size is the size, and the color is the color.
The real question is this:
Is the price (and the size and the color) of these sneakers ACCEPTABLE to a particular consumer?
Whether or not the PRICE of these sneakers is acceptable to a given consumer depends on the consumer’s perceived VALUE of the sneakers.
If the VALUE to the consumer is less than the PRICE, they will not buy the sneakers.
If the VALUE to the consumer is higher than the PRICE, they will buy the sneakers.
Another way to think about it is this:
…the consumer would rather have the sneakers than the $35 and WILL make the trade…
…the consumer would rather have the $35 than the sneakers and WILL NOT make the trade.
If you asked 100 people, “What’s the price of these $35 sneakers?” all one hundred would answer, “Thirty five dollars.”
If you asked 100 people, “What’s the most you would pay for these sneakers right now?” you’d proabably get a hundered different answers.
The PRICE is the price. It’s objectively true at a point in time.
It’s the VALUE that is subjective and varies from person to person.
P.S. Have you been “planning” to start podcast for more than a year? Registration for my 5-Day Podcast Challenge closes tonight at 11:59pm ET.