This transcript was generated from the episode audio and may contain minor errors.
[Music]
Today's listener has a moral dilemma. They made more money by raising their prices. Wait a second, what's wrong with that? What's the moral dilemma there? What is the ethical challenge with raising your prices and making more money?
Well, I guess we should listen to their question to find out. Welcome to Side Hustle School. My name is Chris Guillebeau. Every day I have the privilege of bringing you this quick action-packed episode, often listener questions, sometimes detailed case studies, sometimes tips, all kinds of things you can do to increase income without quitting your job, by using a skill you already have and without going into debt, all good things. And I tend to think that making more money by raising your prices is a good thing, but there could be a bit more to it.
So let's dig into the question and hear what our caller Ali has to say. [Music]
Hi there, Chris, this is Ali. And I've been following the show since at least season two. This is more of an observation than a question, but I guess I'm wondering how common it is. I sell hula hoops and party games on an e-commerce website.
I know that sales and discounts motivate buyers and you talked recently about having a permanent sale. I decided to try something. I made a coupon code for 20% off everything in my shop, but I actually raised most of the prices in advance so that the discount was more perception than reality. Guess what? I sold a lot more.
I even made sales to customers without the coupon code, which surprised me. Have you heard of this happening before? Do you think this is something others should try? Lastly, I don't think I'm doing anything unethical with this strategy, but I'd like to get your take on it. Thanks.
[Music]
Hey, Ali, I love this question. Congratulations on your hula hoop shop and congratulations on this very clever strategy. That's what I think it is. It's clever, it's not unethical in any way. So maybe to answer that more, how common is it?
It's actually pretty common. Like people do this in various ways. Lots of industries do it. You just don't always think about a side hustler or just a regular e-commerce seller adapting a strategy from a big company, but big companies do this all the time. As for this permanent sale, like putting the price at one level and then offering a coupon code, but basically you're kind of factoring in all those details in terms of your own margin.
Again, nothing wrong with that. Let's think about some of the businesses that do that. Airlines, furniture stores, delivery apps, so many more. Concert tickets these days are dynamically priced often to where the price is going up and down. And there was a story recently about the last Taylor Swift tour and how people in the same row sitting next to each other would often exchange stories and they would realize that one person paid hundreds of dollars more for basically the same ticket.
There was also a lot of attention with Bruce Springsteen's tour recently where a lot of tickets were going for thousands of dollars each. And of course people were kind of upset about that, but these are extreme examples. The point is dynamic pricing is here to stay. People are used to it. And so you're not doing anything unethical.
You changed the price on your website. You published a coupon. You gave people a chance to use that discount if they wanted. So everything is fair game there. And by the way, not sure if you've noticed, but prices are going up everywhere for just about everything.
So good for you on finding a clever solution. Listeners, learn from Ali and maybe learn something from me, but especially from Ali in this case. And if you have a question, sidehustleschool.com/questions let me know what you're up to, what your ideas are, what's going well, and what is difficult. We have a new episode every single day, seven days a week, including one coming tomorrow. That's it for now.
My name is Chris Guillebeau. This is Side Hustle School. [Music]
From the Onward Project.
