https://www.youtube.com/watch?v=iFhiK5zORGk

1 00:00:00.000 --\> 00:01:00.000 what's going on everyone in today's
video i'm going to show you how to charge exorbitant prices for your
goods and services so not that long ago my wife and i were at a charity
event for after-school all-stars at arnold schwarzenegger's house and i
saw some of the most beautiful displays of understanding market
economics um that i've ever seen and so at the end of that night i had
my hand raised and i donated a million dollars alone that evening based
on the way that they had manipulated the event and so to rewind this
story for you briefly um right as i was coming into the event right as
people were meeting each other they wanted me to introduce me to some of
the other board members of the charities the ceo of the charity ben was
talking to one of the other gentlemen there who's a big donor and he
said ah what uh what he did and what he what his recommendation was was
brilliant and i was so afraid to do it but i'm so glad we did and i was
like well what did he say to do he said well last year we sold the
tickets for ten thousand dollars uh ahead just to attend the event and
play poker he said but this year it was 25 000 and we actually sold more
people and

2 00:01:00.000 --\> 00:02:00.000 i was like that's crazy and the
gentleman i found out later had made all of his his fortune in the ultra
high-end jewelry business and so that is a business of purely
understanding the demand curve supply and demand and how to raise prices
and so he said something to me and he said it's so smugly and so like
content with himself in this moment that i just it just like etched into
my brain he said you always have to remember when demand increases he
said you cut supply and he said it just like he said you cut supply and
what that does is it jacks prices through the roof because now you have
more people who wanted it than before and there are fewer items for sale
and so by doing that you get these massively inflated prices which
plenty of us probably saw during the the whole pandemic and things like
that that happened on some goods that were there all of a sudden demand
increased right and so as extension and supply went down and then that
is what jacks up prices and the thing is is you can harness that in your
own business all right so if you've ever looked at chanel for example if
you if you want to

3 00:02:00.000 --\> 00:03:00.000 buy a chanel bag and these are the best
people to look at the people who've been doing this for hundreds of
years you know at least 100 years like you know i think don't correct
around that but long time right louis vuitton they have figured out they
have hacked how to generate and stimulate demand all right so in a
channel store for example they have one to two bags that are available
corporate doesn't let the stores know how many and of what bags they're
going to receive it's a complete mystery complete surprise and they
don't tell them when they're going to stop producing stuff and they do
it all the time and so what happens is they create this experience where
when you walk in the door there's absolute scarcity there because every
bag is limited edition there's only one of a kind there might that might
be the only bag you ever see you can't even buy these things online and
they do that by design so they can stimulate higher prices and so just
as a as a quick one on this um i don't know if you've ever really wanted
to buy something and you uh you know right as they were about to tell
you the price on the thing you got kind of scared just like you know
you're exposed because you're

4 00:03:00.000 --\> 00:04:00.000 like i really want this thing right and
all of a sudden they tell you the price and you're like thank god i
would have paid so much more than that that is a missed opportunity
because you would have paid so much more and as the business owner you
need to know how to stimulate that and so i'll tell you one final
example and then i'll get into this price curve behind me if i were to
sell um a a day of my time for five people right i could probably say
tomorrow hey it's twenty thousand dollars for a day there's five of you
in the room it'll be intimate click here to buy right sure but what i'm
missing is the number one and number two people of those five might have
been willing to pay two hundred thousand dollars for that day and so the
thing is is as you as you cut cut units so this is supply this is demand
this is microeconomics 101. as you cut supply right as supply goes down
then what happens is you can look all the way on this demand curve right
supply goes down you can raise the price here what ends up happening
most times is that people will cut their supply but then they will keep
their price

5 00:04:00.000 --\> 00:05:00.000 uh at a lower price right it's like
they'll cut the supply to here but they'll they'll price here rather
than pricing all the way here and the thing is is there's so much extra
juice in the squeeze that's available for you if you just know this and
so my first recommendation for you is if you can create a limited or
very scarce service or service level or product that you can release i
guarantee you that you will make more money this is the reason and one
of the things that isn't taught about this microeconomics demand curve
is that they assume a static condition meaning perfect marketplace all
people have perfect information and as you shift the price you know that
you you try and find the sweet spot but what they don't think take into
account is that this demand curve can shift based on marketing so if you
think about marketing isn't in a general perspective marketing is
artificially stimulating demand you're purposely letting more people
know about what you do so that you can generate demand inwards so you
can shift your way this

6 00:05:00.000 --\> 00:06:00.000 way on this on this graph right i'm
sorry this one described excuse me and so what we can do here is that if
we have stimulated demand demand goes this way right boom it goes all
the way down to here which means that our prices we actually can go even
further along this curve to increase the price and here's one of the
magic things about when you control supply if i were to sell three
people that hundred thousand dollar day for example i made a more money
than i did selling five people a 20k a day but not only that it's easier
for me to fulfill for three people so i create less operational drag i
have way more profit right and i create an error of premium and i can
also delive over deliver to those clients even more than i could before
all right and so if you have a fundamental understanding of how this
works the supply demand curve then you can work in your favor and one of
the biggest mistakes that i see with most entrepreneurs is that they
spend too much time trying to supply and not enough time trying to
generate

7 00:06:00.000 --\> 00:07:00.000 demand demand is the power that's
coming towards you stimulate is you satisfying and so you want to think
about it like a seductive dance right where you someone someone has this
desire right but you want to delay you don't want to satisfy me you want
to delay you want to delay right now there is a snapping point where
someone eventually feels rejected but it is far far far longer and
further away than most people think right and so what you can do is you
you tease things you you you flirt with them you whisper things that are
coming out you drop these little hints drop these little hints right you
create a waiting list right if you had a service and you said hey to
work with me i'm all the way over here because i can only take five
clients period period and you cap it and you cap it right you have five
clients period well i can i can uh i can set you up with a waiting list
and i'll let you know when we have more slots you will generate more
demand because also the allure around what you do he must be good or she
must be good because they have a waiting list because they they are no
longer at capacity and so one of the interesting things about being at
full capacity is

8 00:07:00.000 --\> 00:08:00.000 it's completely up to you what full
capacity means you can say today that you are full think about that you
could say oh we're completely capped out you could cut off your supply
to zero right and so as soon as you cut your supply to zero your price
shoots that way right and so you cut your supply to zero saying i don't
take anyone and then what happens is this pressure builds and it looks
it's like a pot right and then you you want to periodically let off the
steam you don't want to be letting off the seam all the time because the
pressure never builds and that pressure is your pricing power and so to
wrap this all up for you the reason it was such a such a tremendous
experience for me to see this happen in the real world is i saw them go
from ten thousand dollars to ticket to twenty five thousand a second and
i saw them sell more right and so by understanding this when you have a
limited edition t-shirt and you drop it you will actually sell more
units not because this curve is wrong but because the way you marketed
it by creating scarcity shifted the demand curve in your favor people
who might other not otherwise buy or say i'll buy

9 00:08:00.000 --\> 00:09:00.000 later now feel forced to buy and by
extension we can jack our prices and actually end up selling more units
overall and so to wrap this up for you one if you can create an ultra
high very very very scarce very very small supply type service or good
or product i guarantee you'll sell for more money you'll get more people
to buy it and i think that if you just do that in your business in some
way you will see this power harness to your advantage and you'll see the
pricing and profit around these things and you'll never want to go back
so hope you enjoyed this click subscribe and i'll see in the next video
