Steven Pope

Here's what the math looks like before ads.

Current five pack, $3.15 profit per satchel.

Three pack at $1.76 profit per satchel.

So the question then becomes, if you have a lower price point, you're going to make less money on it, but you'll get more sales because there are more people who will buy at the lower price point.

And then how does that math break out?

Does the math mean you're going to sell more five-packs or less five-packs over time?

And some people are going to assume that this is a zero-sum game.

They'll assume that if I put a lower three-pack option, that the five-pack sales are going to go down.

And they might temporarily.

But over time, here's what actually happens.

Let's say you normally would sell 500 five-packs a month.

Then you launch the three-pack.

And your three-pack starts selling 1,000 three-packs a month.

Now, technically, you're selling less product and making less money.

However, when you sell the 1,000 three-packs, the ranking and the conversion on the listing

goes up and you end up getting additional keywords ranking at the SKU level.

And so that five pack that would only sell 500 units a month, when the three pack is selling a thousand, the five pack ends up gaining further traction and you might be selling 700 or 800 five packs.

You'll never sell more five packs than the three pack over time.

but you will sell, most likely, more five-packs after set time, might be like three months, than before that you launched the three-pack.

And so this is an interesting thought exercise, and a lot of people don't understand this because they, like human nature, in my opinion, defaults to zero-sum game theory.