How TO Make A TON Of Money (in just a few minutes)

Summary

• Always consider selling more expensive products or services; there's no strategic advantage to being the second cheapest.
• If you're not built for lowest cost structure with operational efficiencies, competing on price will lead to slim or no profits.
• Aim to have offerings that are 10x, 50x, and 100x more expensive than your current average product price.
• Price anchoring can effectively make your other offerings seem more reasonable by presenting the most expensive option first.
• When setting prices, organize them strategically so that customers perceive an increasing value, making the higher prices seem like better deals.
• People are willing to pay for expensive items if they perceive the value as high, similar to buying a Ferrari at a significantly reduced price.
• The key to selling something expensive is to ensure the customer understands and believes in the value it provides
• Always have an extremely high-priced offering, known as a "price anchor," as some customers always opt for the most expensive option.
• If the pricing of your most expensive offering doesn't elicit a shocked response, it's not high enough.
• Your pricing strategy should reflect the value delivered to specific customer avatars or segments.
• Offer a variety of price points (e.g., $100/month, $200/month, $1,000/month), so customers can choose based on their needs and perceived value.
• Create your offerings at 10x, 50x, and 100x prices, ensuring the fulfillment matches the promised value and place these at the top of your pricing menu.

Video

How To Take Action

A good way of doing better business is to focus on selling more expensive stuff. Don't compete on the lowest prices if you're not the most efficient. Instead, sell products that are way pricier than what you've got now. Think about what's your average price, then imagine 10 times, 50 times, and even 100 times more expensive items. Write those numbers down.

When you're pricing, you want to make sure the customer sees the value they're getting. Make a really expensive option, the "price anchor," and show it first. This makes your other offerings seem like better deals. For example, if you sell a membership, start with the most costly one. Then, when customers look at cheaper ones, they feel like they're getting a bargain.

Make sure you have a variety of prices. Like if you have something for $100 a month, consider also offering something for $200 and $1,000. Different customers will pick based on their needs and what they think is worth it.

To really nail this, you need to think about what you'd have to give to make someone feel like they're getting a huge deal, like a Ferrari for cheap. If folks believe in the value, they'll find a way to pay for it. And always remember, some people love buying the most expensive thing because that's just how they are. Don't be afraid to have a super pricey option. If no one gasps at the price, it might not be high enough.

Lastly, your prices should reflect how much value you're giving. If you’re helping big companies, you can charge more because the value you give is bigger. So write down those big prices, be ready to talk about them, and watch how people are more comfortable buying your other stuff.

Quotes by Alex Hormozi

"There's no strategic benefit to being the second cheapest person in the marketplace, but there is for being the most expensive"

– Alex Hormozi

"Price anchors have two benefits"

– Alex Hormozi

"Price is what you pay, value is what you get"

– Alex Hormozi

"People want to buy great deals, they don't want to buy cheap stuff"

– Alex Hormozi

"If you didn't get a gasp from the price, you didn't go high enough"

– Alex Hormozi

Full Transcript

about to make you a ton of money in a few minutes i'm gonna walk down exactly how you can price stuff to get more people to buy really expensive things that you sell and if you don't sell something really expensive you're gonna want to by the end of this video right now if you can write down on a piece of paper what the average price of the thing that you sell is let's say it's a hundred bucks what i want you to do is i want you to put 10x i want you to put 50x i would put 100x next to it now once you write the price of what that would be if your main thing's 100 bucks 10x is a thousand 50x is 5 000. 100x is 10 000. it doesn't matter what business you have if you want to make lots of money sell more expensive stuff there's no strategic benefit to being the second cheapest person in the marketplace but there is for being the most expensive there's only one strategic benefit to being the lowest cost person in the marketplace which means that you went in with that strategy and you built an entire business around operational efficiency automation and you built the whole strategy of the business on being able to provide the same thing for less if you did not do that and are simply trying to do the same business as other people and compete on price you will lose you will have no profit left over and you will get price to the point of breakeven and you will just run a non-profit thank you that's probably not why you got into business no matter what you sell you should have something that's 10 50 100 times more expensive than thing you're currently selling when i bought my first nice suit for myself a friend of mine was like fashionable and he like took me to the store or whatever i put a suit on i remember checking the price tag and it was thirteen thousand dollars homie didn't have thirteen thousand dollars and i was like [ __ ] and then what they did is after i took that off they put me in a suit that was like twenty nine hundred bucks or twenty 2 500 and i was like okay i can get with this right i didn't realize it then but they had completely price anchored me and that was 100 the strategy was get put you in the most expensive suit and then you're like geez but the thing is is that some guys will look at that and the right guy will be like done i'm in price anchors have two benefits and this isn't the only point of the video this is the first point for everybody who isn't going to buy the really expensive 10x 50x 100x thing you anchor the rest of your pricing against that first price so you're showing them this thing kind of like ripping off the band-aids like stretching the length through which they see your pricing if i say a thousand dollars first and then i say a hundred thousand dollars it's like [ __ ] that's huge but if i say a thousand dollars first and then i say a hundred dollars or ten dollars that sounds like less if you have a pricing menu for a membership for example of any kind you want to have the most expensive one first not the least expensive one and then everything else will look cheaper by comparison if you do it with wine you can do with software you can do with memberships it works in every situation because it works on psychology now let's talk about the other side of the equation all right so we've got the anchor and then we've got other options of pricing so how do we organize the other two options good question i like to use the small medium large example to kind of like break this down so you can use this as small medium large popcorn small medium large cokes whatever but let's say you've got 10 bucks five bucks and you've got this middle price where you put this middle price will indicate which product gets sold the most of a certain percentage people always buy the cheapest thing because that's who they are and that's fine the next people are influenced by the pricing in general so if i have a five dollar thing and a ten dollar thing i can make this medium six bucks so i make my medium a dollar more than my small and it seems like a great price but the thing is to ever forget is that we make up all the prices all of these are made up so we got 510 and we got six or 650 or 6.99 and we're gonna get a lot of people are gonna buy this one now if i bump this to here nine dollars and i make this 10 what are people going to do a lot of people are gonna buy this one because by comparison it's like wait just for a dollar more i get twice of the small well that sounds like a great deal and so fundamentally people want to buy great deals they don't want to buy cheap stuff think about the difference there price is what you pay value is what you get the deal is the discrepancy between the two for example and this is a big one this is a i want to break this belief for you if right now you sell expensive stuff five thousand dollar things or ten thousand dollar things if i were giving you a ferrari brand new and i said it's ten grand and i'm walking up to people on the street and they believe that i was actually going to give them the ferrari how hard do you think it would be for them to come up with 10 grand what would they do they would call their friends they'd call their family they would take out of their credit cards they'd take a loan why because they know it's worth more than 10 grand whenever you are selling something expensive the reason someone is not buying it is simply because they do not understand the value because if they understand the value and they believe that you're giving them a ferrari they will find a way to get the money i want to banish this whole concept of like they can't afford it everyone can afford it if they believe the value is there and so the idea is not that we're giving cheap stuff away we want the value relative to the price to be a huge bargain when you're coming up with the stuff that you're going to sell the first thing that i want everybody to do 10x 50x100x pick one and then figure out what you would have to fulfill to make it worth that they are getting a ferrari for 10 grand and that's how you get people to say yes over and over again and the other thing is is that it'll start to teach you that people are willing to spend more when they see the value the other benefit of having this huge price anchor is that whales will buy it so a certain percentage of population just like i said certain percentage population always buys the cheap thing because that's who they are there's another percentage of the population that always buys the most expensive thing because that's who they are it doesn't hurt you at all to have something that's super expensive on your menu put it there with the expectation that you're never gonna sell and be surprised when you do if you didn't get a gasp from the price you didn't go high enough you want that gas because that gap shows that you've broken the rubber band of pricing that they associated with what they expected your product or service to be priced at and so if you're like oh it's 100 grand they're like whoa i was not expecting that you're like oh no worries and then you can explain why it's worth it but then it's like you know what i think we can do 80 of that for 10 because that's our our silver that make more sense for you yeah that would make a ton of sense for me now if silver's 10 bronze is 8 and gold is 100 you need to sell a lot of 10ks because now it seems like nothing it depends on the customer or segmentation but one of the big mistakes i see people do is that they'll have like 100 a month 110 a month and 120 a month you want to meet buying personas so you might have a hundred dollar a month you might have a 200 a month you might have a thousand dollar a month because the people and the needs between those customers are different so you want to price based on the value delivered to a specific avatar like if i'm selling something to coca-cola it's going to be more valuable to coca-cola than it is to a local brewery so you can price it accordingly if you are a cro expert conversion rate optimization and you can help an e-commerce store buy 10 if the store is making a million bucks a year 10 is 100 grand if the store is doing 100 million dollars a year 10 is 10 million you literally can provide more value to them because of who they are not because of who you are so 10x 50x100x think about what you provided for each of those levels put that at the top of your menu be the first thing that you explain to people expect 1 out of 20 to say yes to it and for everybody else to feel much more comfortable taking the other options bye