The $9.99 price point remains a powerful strategy because many consumers perceive products under $10 as noticeably more affordable than those priced at $10 or higher, even though the difference is only a penny, The Wall Street Journal reports.
Companies are increasingly struggling to maintain these prices due to rising costs from inflation, fuel, tariffs and production expenses. To stay below the psychological threshold, businesses are cutting packaging costs, adjusting product sizes, improving manufacturing efficiency, and accepting smaller profit margins.
Major brands are redesigning products to protect the under $10 price range. Toy companies are simplifying packaging, beverage companies are offering smaller quantities and retailers are expanding their selection of affordable items. Some companies also use pricing strategies to attract new customers, believing that a product beginning with a nine feels like an easier purchase decision than one starting with a 10.
Research shows that shoppers categorize prices into mental ranges, so crossing a price barrier can change how they view a product’s value. This effect has become even more important as inflation has pushed many everyday goods above familiar price levels. Smaller brands are also keeping prices low to compete with larger companies, even when it reduces their profits.
Beyond $10, other important psychological price points include $5 and $20. Businesses continue to focus on these thresholds because staying below them can make products feel more accessible, encourage trial purchases and help customers feel they are getting better value.
