Then auctions like eBay are another example of dynamic pricing.

It turns out we made this pretty easy.

Set a price for this item

Let's take a look.

I could actually price on specific customer segments or on features I know they need.

They want to encourage high volume purchases, and so they have stepped pricing that is oriented to create volume.

licensing and intermediation and direct sales, etc.

But there's another type of pricing.

What s the revenue stream. That s our strategy.

It should be a value based decision.

That just means that the last three yield management, real time, and auctions are examples of dynamic pricing.

In companies do you know how much each individual department can sign off for?

And then kind of the third common errors, my price hast to be less than my competitor's price.

What was the market size? What share could you take?

But how do you think about pricing itself?

The stock market is a real time market.

Cost plus market, value pricing, and volume price are all examples of fixed pricing tactics.

That's a mistake.

And you will see later that pricing is a tactic.

Is it a license or subscription model?

As we said, the same with pricing.

Here's how it is. It's the fixed price.

But there are two types of prices.

And you know that it's going to be 100.

The first three cost based pricing, value based pricing, or volume based pricing are all examples of fixed pricing tactics.

That revenue model is different than the pricing tactics.

It's very simple. It's cost plus markup.

We'll just add a markup that is a profit, and therefore we have a price.

How hard can that be?

I'm going to talk about two stories today.

There's no haggling.

Negotiated prices is a dynamic price.

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Preston promised his car would sell for 1,000.

But what's interesting is inside of each revenue stream, you may have different pricing tactics.

I mentioned them earlier, but a common startup error on day one is let's price on cost.

You're going to have an incredible advantage in thinking about revenue and pricing.

One is fixed prices.

And that's the real big take away I wanted you to get at, is that high utilization of anything, of our aggregate capacity, prices will increase.

Price

Well, let's put a tax on oil that is a non revenue tax, and it basically says for the next 20 years, the price of oil will be whatever you want, 35 bucks, 40 bucks.

We are essentially saying the demand, the Price Quantity demanded relationship is held constant and we can pick a price and we'll get a certain quantity demanded.

Par value