What would a world without price tags look like? Well, if you actually travel around the world, you would notice that much of the world already does look like that. And for much of human civilization, price tags or fixed prices, did not exist.
In the early markets of the old world, the apple cart merchant did not post a price for the apples on his cart. There was no price. Every transaction was a personal one on one negotiation that took into account the individual need of consumer and merchant at that moment in time. In other words, if the consumer was really hot or hungry, his value for the apple would be higher. And if the merchant had a large supply of apples left at the end of the day, his price might be lower. Every transaction was a unique negotiation that started with a pricing offer that took all this into account for each situation. When the consumer and merchants needs were both met and they both benefited, only then did a transaction occur.
So most of our ancestors, and many of our relatives in other parts of the world, understand this offer model of commerce. Yet, as merchant operations grew out of the local market, long distance distribution and mass selling changed the individual pricing model and gave rise to a fixed pricing model.
Now, most Americans believe that is the only way to buy, and that when a fixed price is reduced, that it is some mini miracle and they need to make their transaction before the fixed price label goes back up. We know this fixed price model is contrived, yet, shoppers continue to play that game and become very motivated consumers during ‘White Sales’, ‘Blue Light Specials’, or ‘Black Friday’. Yet if the merchant can reduce their price by 50% on Black Friday, they are not losing money on the sale or they would not do it. What this really means is that their margin the rest of the year is simply much greater. And many of you pay these fixed prices not really understanding that you have the power to make every day your Black Friday.