I was going to say "introductory premium price", but I think we're a little muddy on the meaning of "premium".
When I hear "premium", I think "better". But in fact, premium means "a sum added to an ordinary price or charge." It's what you pay extra to get something better.
Normally, we expect introductory prices to be lower -- a discount offer used to ramp up sales volume quickly, and to prompt people to buy now, before the offer runs out.
But what if the introductory price were higher? Would anybody buy?
Here's a bit of speculation:
Soon, there will be three kinds of books on the Kindle.
$1.99 ebooks. This is the clearing price for virtually all ebooks going forward.
$5 ebooks. This is the price for bestsellers, hot titles and books you have no choice but to buy because they were assigned in school.
$10 ebooks. This is the price you will pay to get the book first, to get it fast, to get it before everyone else. There might even be a subset of books for $20 in this category.
Interestingly, that's the opposite of what Seth himself has been doing with the Domino Project. Often, their new releases will be free for a week or so -- the introductory discount to ramp up volume and get people buzzing. Apparently, the introductory premium model isn't for everyone.
Where it would work is with books that people are chomping at the bit for. Harry Potter and the Octogenarian Octopus. The Lion, the Witch, and the Space Elevator. Twilight, New Star Rising.
Okay, I made those up. But you get the point. How much do you think those people who lined up to get the last Harry Potter book at midnight would have paid to be able to read it two weeks early? Enough to pay off a large chunk of the national debt.
And what about books where there's a monetary first-mover advantage to having the information early? (Okay, I don't have any examples, but it's easy to imagine something like that existing.)
What Seth is talking about is new eBooks being priced at a premium until the physical book hits the shelves. The time it takes to distribute books to retail locations is a great justification for...er, gouging those who want to be at the front of the line.
Kindle Paperwhite – Now Waterproof with 2x the Storage – ...
List Price: $129.99
Amazon Price: $99.99
All-New Fire 7 Tablet (7" display, 16 GB) - Black
List Price: $49.99
Amazon Price: $49.99
First-mover advantage is another great justification.
I'm sure there are others.
The point is, you couldn't get away with charging an introductory premium for just anything. You've got to give people a reason -- they've got to get some kind of extra value in return for the higher price.
With internet marketing product launches, sometimes you'll see extra bonuses that only the first 100 buyers get. What if the first 100 had to pay extra to get those bonuses? Would that work?
They'd have to be good bonuses -- that's for sure. And it'd probably work a lot better if there was a concrete reason why quantities had to be limited. For example, the first 100 buyers of a new make-money system got a half-hour consultation with the creator after they'd gone through the course to help them apply it to their business.
Reason for the limit: one person has limited time.
Value of the bonus: very high (if the creator is known and respected).
If snob appeal is part of your image, you could even halt sales for a few weeks after the limit was reached and make everybody who wasn't willing to pay the premium wait behind the velvet rope till the big players were done with their exclusive party.
Would people may more? Some would. Some wouldn't. So you have to be careful how high you set the premium, and how high you set the limit on how many can get it. (If sales grind to a halt at 98 because everybody else is waiting for the price to drop at 100, that's a catastrophe!) If you not sure how much demand you'll have, you might want to set a time limit in addition to a limit on quantity.
Well, it's an interesting thought. I wouldn't be surprised to see Seth right on this one. It'll be interesting to see whether and how the model gets applied outside of the book market.