Buy My Car for Less Than I Owe

6 Comments

car for saleI was browsing cars for sale on Craigslist last week, and I cam across a listing stating this:

“I am looking to get at least $15,000
because I owe more on it than that.”

I don’t think a dummer way exists to price a car than to figure out how much you owe and go from there. As a buyer, I could care less how much you owe on your car. Did you pick the slow payment plan over 10 years, or are you paying it off fast in two?

The most irrelevant thing to a buyer is how much you still owe on your car.

Unfortunately, many businesses also price their products this way. They figure out how much it costs to manufacture, then they price it from there.

Those numbers aren’t irrelevant and should be calculated, but the last thing a consumer cares about is how much it costs you to make your product.

At $120 a pair, you won’t find a single woman who buys Lucky Brand jeans and first calculates the cost of manufacturing. All they care about is how they look.

That’s how you price a product.

photo by The Car Spy

Posted on April 23, 2012

  • David M.

    You’re
    exactly right Justin,

    The price of
    any product should be based on the value the customer perceives it to have and
    the price the market is willing to accept. 
    Customers don’t really care what it costs you to make it.  Generally, the more value the customer gets
    out of a product the more they are willing to pay and the happier they will be
    if the product lives up to their perceived value.

    Great
    observation!

  • http://twitter.com/esggraphics Eric Gale

    Amen brother! I agree with David. People/the market pay based on perceived value-  not on the makers costs. The hard part of pricing is to price it from their eyes and not from mine. Why else do people pay more for an e-product vs. waiting to get the physical product. The information read today is more valuable than that same information in 2-3 business days.

  • http://coachradio.tv/ Justin Lukasavige

    It’s obvious isn’t it, David? I wonder why so many biz owners get this wrong.

    Here’s how to get your photo to show here. http://coachradio.tv/pic

  • http://coachradio.tv/ Justin Lukasavige

    I like that, Eric. Pricing would be much better if we put ourselves in our customer’s shoes.

  • http://www.facebook.com/people/David-Mehl/1206547422 David Mehl

    I set up a
    Gavatar account, but it does not post to my accounts – Facebook, Twitter, uTube
    … using the e-mail addresses associated with those accounts.

    Any advice?

  • http://coachradio.tv/ Justin Lukasavige

    Yes, it doesn’t interact with FB, twitter and YouTube. It does pull your pic in automatically for WordPress’s standard comment system. It also looks like you haven’t linked your disques account to FB or twitter. That will also pull your picture in automatically. Either that or you haven’t created a free account at http://www.disqus.com.