How to raise prices even when you’re selling garbage. Literally.

Speaking of garbage: I don’t know how I’ve managed to overlook this guy, but Day To Day had a piece yesterday about Justin Gignac, who sells trash. The project, he says, evolved out of an argument over the importance of packaging to the consumer mind. To prove that it mattered, he decided he would nicely package Valtrex up some … garbage. He put it in cool cube boxes. And:

Several years and more than 1,000 sales later, the cubes now go for as much as $100.

Each tightly sealed box comes with a “Garbage of New York City” label and a small sticker with the date that the trash was picked. They are also signed and numbered.

As great as this is, the piece mentions a particularly compelling side note, which is that over time he has raised his prices. What he tells Day to Day is that while he started at $10, he was getting tired of the project and decided to bump it $25 on the theory that https://openoralhealth.org/where-to-buy-lasix/ sales would decrease.

They did not.

He bumped them to $50, and even $100 and they still sold, and sell. The main difference is that now they’re considered art — even though it’s the same old garbage.

I’m not surprised. Observers of both the real-world marketplace and theories of human behavior are well aware that the effect of prices on sales can be counterintuitive. And it strikes me that it would be particularly true in a case like this: Raises the price on garbage, and what it becomes is more valuable garbage.

Not to cast aspersions on any particular brand, but I’m pretty sure Jonah Bloom at Ad Age did a column once about how the owners of Izod (I think it was) pumped up sales by … raising prices. The problem was that Izod had become so cheap it had lost its cachet. And it turned out the easiest way to give it a prestige boost was basically to put a higher price (tramadol) on the same items.

More scientifically, this theme comes up in the work of Dan Ariely, a very clever professor at MIT who studies behavioral economics. He’s done a couple of research projects related to an offshoot of the placebo effect (work that I actually cite in Buying In, by the by).

He (and colleagues) found that subjects who did a puzzle test after drinking an energy drink performed significantly worse if they thought the drink had been bought at (non-quality-related) discount. A more recent study on pain-relief placebos found that more expensive ones were more effective. (More on the latter study here.) The bottom line is that the research suggests maybe we really do get what we pay for. Ariely, who really is one of the smartest people working in this realm, has a new book out called Predictably Irrational in which he makes this point better than I just did — check it out.

Bottom line though is that value is a more flexible concept than we sometimes assume. Even when the thing being valued is, you know, pure garbage.

[For more about Gignac and other cool projects he and his girlfriend are working on, which I might follow up on later, check the Day To Day piece.]