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Sabre-like Bargains

If someone offered you a useful new handbook, print edition, for 2$, would you be skeptical of its value? I know I most probably would.

While Croatia was still classified as a “transitioning economy” we got free educational books from the Sabre Foundation. Every Saturday, a literal wagon-load of various handbooks, encyclopedias, etc. was made available. The books were high quality, brand new, and stamped with “not for resale”.

They were not free to take but had a blanket cover price of roughly 2$. Whether you chose a 400-page, illustrated encyclopedia or a pocket-friendly handbook that was part 7 of a 13 – part series (with other parts not being available) the price was exactly the same.

This is the difference between a (full) price and a cover price. It was clear that the price had nothing to do with the value of what we were getting. The cover price was there only to discourage tragedy of the commons type scenarios – people collecting books to recycle or burn them, for example.

If you really need to price something at a low price (because of benevolence, wider access, faster market penetration, etc.) make it abundantly clear that what you are charging is not the full price, but the cover price. This will enable you to sell at lower prices without automatically casting doubt on the value provided.

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