Last week, a drive by a 99¢ Store (see photo) reminded me of my first real job in an industrial marketing department. During the 1970s, one function of this department was to set prices, a task simplified in the early going by the market’s acceptance of whatever surcharges we added each year.

In some years prices were increased twice. My job was to gather cost data on each product family, and multiply costs times our expected profit to determine a new price. The basic formula was: Price = Cost + Profit

There were no reviews of costs; there was no need for reviews. Nobody blinked when prices went up. In fact, each price increase created an opportunity for distributors to stock up just before the increase at a lower price: more sales for us, at least in the short term, and more profit for distributors. This was sales’ perpetual-motion machine.

The customer determines the price at the 99¢ Store

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