Momopi, Terrence, does 99 cent pricing still work?

[Winston]

Momopi, Terrence,

A quick question. Does $19.99 still sell better than $20? Or is that an outdated sales trick that no longer works?

For instance, if my ebook sells for $19.99 instead of $20, would that increase sales?

How effective are such cheesy sales gimmicks?

What do you think?

Thanks,
Winston

[momopi]

Momopi, Terrence,
A quick question. Does $19.99 still sell better than $20? Or is that an outdated sales trick that no longer works?
For instance, if my ebook sells for $19.99 instead of $20, would that increase sales?
How effective are such cheesy sales gimmicks?
What do you think?
Thanks,
Winston

If it improves your sales by 5%, it's worth the "cost" of a penny per sale.

[Winston]

So it still works then? I imagine it must, since everyone is still using that tactic in their prices.

What i don't get though, is why anyone would look at $19.99 and think it is $10 rather than $20. I certainly see $19.99 as the same as $20. So why does this silly technique work in increasing sales? Kind of dumb.

[momopi]

http://en.wikipedia.org/wiki/Psychological_pricing

At this point, the dollar 99 thing is more cultural than psychological. Everyone knows 99 cents is same as a dollar, but we'd still stick our heads in 99 cent stores to see what's "on sale", which is an oxymoron for a 99 cent store.

[Winston]

Here is an interesting article about why 99 cent pricing works on people.

http://www.post-gazette.com/pg/06351/746545-28.stm

[adam917]

The funny thing in the Internet age is that now the difference might mean something. I see stuff priced many different ways. I am one of the few Americans who really wishes stores got rid of the x.99-style pricing & stuck with whole numbers, especially if the sales tax system of adding to the end price will stick around. Mental maths becomes easier to calculate say an 8 % sales tax on a 50 $ item (extra 4 $ in that case) rather than a 49.99 $ (extra 3.9992 $, probably rounded up at registers but sometimes down) item.

I wouldn't mind an x.99-priced item if I were in a country where items are priced with the tax already included, as I'd still be saving something.