Yesterday, I had an interesting chat with a colleague at work regarding his friend who was able to retire and enjoy life at the age of 35. It's fascinating how a man with $200 in his bank account creates multiple businesses using his business strategy and credible marketing skills. It's hard to believe that there are people who can build something out of nothing and come out successful.
With the help of technology in a good location, there is a high chance that anyone can achieve the success that they want in life.
According to my colleague, it all started when online selling was about to take off. His friend had this idea to set up an account in an online shopping app but he didn't have money to invest. So, he gathered some funds from investors by shilling his business plan. He was able to acquire investments from 5 people who were good enough to purchase the initial stocks of the phone casing.
The sales were not so good in the first month so he asked for more money from the investors to support him with the overhead cost. It continued until the 3rd month but then the investors lost the motivation to be part of the business. So, all of the investors exit the business. There was a proper procedure regarding the exit through signing a contract.
What they are not aware of is that the business owner is forcing them to exit the business by controlling the sales of the business. The business is selling some products to the extent that the overhead cost will be greater than the profit.
After, all the investors exit the business. He (the business owner) opened a few more online shop accounts (2 more shops)on the platform to sell the same products (phone casing). The strategy that he used was to price the same product into different ranges.
For example, he will sell the same item in his 4 online shops at varying prices:
- Shop 1 is $8
- Shop 2 is $9
- Shop 3 is $12.
As expected both shop 1 & shop 3 can sell the casing. With shop 1 as the top-selling shop among the 3.
It turns out that consumers thought that they were getting a good deal for buying from shop 1 because the price was cheaper. But the reality is that shops 2 & 3 are overly priced. The perception of the consumer changes whenever they see varying prices for a specific item.
We tend to judge the value of an item by comparing the price tags of different shops or places. But what we are not aware of is that we are simply being manipulated by the situation that was created by whoever is behind the scheme.
The consumers who bought from Shop 3 think that they are buying a legitimate product because it has a higher price which could indicate that it's of higher quality than the ones sold at Shops 1 & 2.
It was a trick that many of us, (including me) would fall into because we lack the knowledge about the real value of a product.
