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Head of Kobo Mike Serbinis with his e-reader device in Toronto, April 28, 2010. (Kevin Van Paassen/Kevin Van Paassen/The Globe and)
Head of Kobo Mike Serbinis with his e-reader device in Toronto, April 28, 2010. (Kevin Van Paassen/Kevin Van Paassen/The Globe and)

Value: John Warrillow

Same product, different pricing Add to ...

Coffee bars in Italy often have a three-tiered pricing system.

If you order your caffe latte while standing at the bar ( al bar), you’ll be charged less than if you sit at a table ( al tavolo), even though your brew is identical.

Some coffee bars even differentiate their pricing on whether you take a table inside or outside – charging a premium for occupying one of the prime outdoor tables.

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Although it is tempting to think of Italy as an entrepreneurial backwater, the land of Fiat and Ferrari didn’t become the world’s seventh-largest industrial power without knowing a thing or two about supply and demand.

As you contemplate how you might find new revenue streams in your business, consider not only what you sell but also how you sell it.

Self-serve versus. full-serve

Not only gas stations charge more for an added layer of service for an identical product. Your full-serve, barista-brewed Americano will cost you more if you have it in a Starbucks store than if you buy the beans and make it yourself.

Is there a way you could charge more for a full-serve version of what you sell? Or is there a way you can get the do-it-yourself customer to take on some of the work and offer a cheaper price?

Forms of distribution

If you want to pick up Tim Ferriss’s new book, The 4-Hour Body, you could walk into a Chapters Indigo store and buy it for around $20. Or you could download the identical book to your Kobo e-reader for $9.95. You get the same “Uncommon Guide to Rapid Fat-Loss, Incredible Sex, and Becoming Superhuman” for about half the price because of how you choose to consume the content.

Is there is a way you could offer the same product with a cheaper form of distribution?

Timing

If you want to see the movie being billed as this year’s first summer blockbuster, X-Men: First Class, this week, it will cost you $12.75 in a Cineplex theatre. If you wait a few weeks and see it in a small, independent theatre, the same movie might cost you almost half as much. Wait a little while longer, and you can download it to your iTunes library for $5.99.

Is there a way to rethink your pricing model so that people who get first access to what you sell pay more than those who are willing to wait longer to buy?

Nobody ever said you have to charge the same amount for the same product. Tinkering with how and when your customers get your product or service can create a number of new revenue streams without having to reinvent what you sell.

Special to The Globe and Mail

John Warrillow is a writer, speaker and angel investor in a number of start-up companies. He is the author of Built To Sell: Creating a Business That Can Thrive Without You, published by Portfolio Penguin.

Join The Globe’s Small Business LinkedIn group to network with other entrepreneurs and to discuss topical issues: http://linkd.in/jWWdzT

Follow on Twitter: @JohnWarrillow

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