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sonaltr

I understand that...but when you are spending 1k does $5 really matter in that context?

I'm genuinely asking -

1. 999 - looks cheap

2. 998 - mmm..why not this?

3. 995 - nice number divisible by 5

4. 990 - well...why are we loosing $10 here?

5. 1000 - 4 digits might be considered expensive but 3 might not?

Trying to learn & understand selling to B2B.

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Most of the purchase departments need one plus additional level approval for say 500, 1000 limits. So if you keep pricing at 999, the department purchasing your product need to go through one level less approval, hence chances of you as a vendor getting paid earlier is better.

Maybe sometimes. Purchasing cards sometimes have limits per line item, and you want to be able to slide under it as strictly less than comparison.

500 limit? $499

1000 limit? $995

While this could sound sketchy, business absolutely love it. If that monthly charge is $1000 or $1001, now I need another level of approval and signatures.

I don't think there is a logical answer to this question. Why is everything priced either 1 cent or 5 cents below round numbers (9.99 or 9.95 or 3.99 ...)? Human brain is weird I guess. It would be better logically if things are priced whole numbers (including tax) like 10, 50, 100. We don't have to worry about pennies and it will probably be easy for accounting purposes too.

One additional motivation is a historical approach to reduce losses due to employee theft. In a cash economy "rounder" numbers would make it easier for employees to take payment without having to ring up the transaction on the till. For example if a magazine was offered at a price of $5 the employee could simply ask for the $5 from the shopper who is more likely to have a $5 bill on hand, the exchange of goods for cash could then take place with the employee pocketing the money and the customer walking away having happily made he purchase (not necessarily aware of the employee's malfeasance). If the goods purchased are not nice round numbers, there is more of a likelihood that the customer will be more invested in the transaction being run up in order to get their change from the transaction.

The same psychological pricing cues also apply to businesses. After all - there's people making the purchase decisions and they're affected by this as much as anyone.

Starbucks pricing: Everything is in multiples of a nickel. Even at places that charge tax on top.

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