February 29, 2024

$2 Thirst

On the way home from karate tonight, I was thirsty, so I stopped at a Cumberland Farms and bought a blue Gatorade.

I didn’t actually look to see how much it cost, but for the sake of argument, let’s say it was two bucks.

In my situation, two bucks was WELL WORTH IT to solve my “thirsty” problem.

Did I think for ONE SECOND about how much it cost PepsiCo to produce that bottle of Gatorade?


Absolutely not.

If it cost them ZERO DOLLARS to formulate, test, manufacture, market, and ship blue Gatorade to the Cumberland Farms near karate, I would still have happily paid $2 for it.

On the flip side...

If the bottle of blue Gatorade was FORTY DOLLARS and PepsiCo tried to justify that price with a sign that explained that it cost them $39.50 to formulate, test, manufacture, market, and ship it to the Cumberland Farms near Karate, I would NOT have bought it.


Because I had a $2 problem, not a $40 problem.

PepsiCo’s costs are PepsiCo’s problem, not mine.

Here’s the thing...

Trying to justify high prices to your buyers by pointing to your high costs simply doesn’t work.

As far as your buyers are concerned, your costs are your problem.