Wednesday, April 20, 2011

The Power of Nine

It's a phenomenon known well and exploited by most marketers who deal with price.  Price tags ending in the number 9 often compel shoppers to open their wallets, while a slightly lower price that ends in zero may not.   In light of the recent e-book pricing debates, it might be interesting to take a look at why 99 cent and $2.99 price points are so prevalent.  Yes, 99 cents is the minimum Amazon will allow an author to charge, and $2.99 is the minimum to receive a 70% royalty.  But why did they pick those numbers, and might it be possible that $3.99 or even $3.95 is a more compelling number for e-book shoppers than $2.99?  Check out this article from Psychology Today and experiment for yourself.


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