Our BrandingIrons became a huge hit thanks to BoingBoing, Wired, a lot
of other blogs and many twitter peoples. I then decided that it would
be interesting and a good idea to raise the price of the BrandingIrons
by $20. Instead of $25 they would now cost $45. The idea was that these
custom BrandingIrons could then do more to subsidize the Shapeways
community. It was an experiment in reversing the ‘loss leader’ idea to create a ‘profit leader’ that would build the foundations for thousands of new creations in the future.
This was a mistake and we are going to go back to our
original pricing of $25. So the marketing person’s headline for this post should be, “Huge price cut on customizable branding Irons”
Sales of the BrandingIrons slowed from a torrent to a trickle. And I spent a lot of time listening and discovering my error. Nick Taylor, summed it up best in a blog comment, “I think
you’re breaking an unspoken social contract that there is a
meaningful relationship between the value of something, and the price.”
Price and value always fascinate me. Why is one shirt for sale for $200
and the other for $10? What value & perceived value operate on your
buying decisions? How we do we compare a price when we’ve never
considered a comparable product? How much does “unique” cost? What
ideas are worth paying for, which are not?
With all my supposed thinking, my little experiment
completely missed the simple idea that there would be people out there
told about the $25 price who would find the new $45 price disagreeable (and might even find us annoying for changing it).
We did sell less and I would attribute this to the ‘sticker shock’ and justified feelings of unfairness. We also received feedback from people explicitly stating that they found $25 to be a good price point and $45 to be excessive for the product. All in all it would seem that 3D printed customizable BrandingIrons are a rather elastic good. I really liked the discussion on the blog and all the emails that I received. But, I must apologize to the people that were annoyed or confused by the price change. The mistake was mine, my apologies.
We want to be as simple, as easy and clear as we can. This is why we
are reversing the price raise and reimbursing the people that brought
BrandingIrons at the higher price. We will also never again flippantly play with price but stick to the calculated prices as we have in the past. From now on: prices on Shapeways
will only go down, as they should.