Is a Ferrari Expensive?

During an interactive session at an e-commerce expo in Atlanta years ago, where I was a guest speaker, someone asked me an intriguing question: "Do you think Ferrari is expensive?"

To most people, that might seem like a no-brainer—of course, a Ferrari is expensive! But for anyone familiar with the nuances of luxury goods, the question was less about the car and more about perspective.

In that moment, it felt like my credibility as a speaker and my understanding of business were being subtly tested. If I said yes, they might question my grasp of wealth and market dynamics.

If I said no, the next question would likely be whether I owned one—and admitting I didn’t could lead them to draw the same conclusion as if I’d said yes. It felt like a trap, where any response could invite scrutiny.

But I wasn’t going to let that moment pass without turning it into an opportunity to explain perspective-based pricing. Whatever the intent behind the question or the assumptions in the room, there was only one honest answer: it depends.

You see, products that go beyond basic commodities aren’t priced solely on factors like quality or demand. Their value isn’t dictated by a standard formula. Instead, their price is shaped by perception—by who’s asking the question and, more importantly, who’s being asked.

To someone who views a car as just a way to get from point A to point B, a Ferrari might seem outrageously overpriced. But to others—collectors, business leaders, or entrepreneurs who see it as a collectible, a status symbol, or even an investment—it’s just another luxury item in their portfolio.

This is the essence of perspective-based pricing. The value of a product often lies not in the product itself but in the eye of the beholder.

Steve Jobs once said, “People don’t know what they want until you show it to them.” Luxury brands like Ferrari thrive on this principle. Their marketing isn’t about the car's technical specifications alone—it’s about selling a dream, a lifestyle, or an identity.

When someone buys a Ferrari, they’re not just purchasing a vehicle; they’re buying into the brand’s story and its association with power, prestige, and exclusivity.

Statistically, this principle can be seen in the luxury goods market, which was valued at over $310 billion in 2023. A Bain & Company report revealed that 60% of luxury purchases are driven by emotional or psychological factors rather than rational ones.

It’s not just about what a product does; it’s about how it makes the buyer feel and what it allows them to communicate to the world.

And it’s not just Ferrari that does this to buyers. Take Apple’s iPhones—priced significantly higher than many competitors despite offering similar core functionalities. Why? Because owning an iPhone signifies innovation, sophistication, and an alignment with a globally admired brand.

Similarly, in the fashion industry, brands like Chanel and Gucci don’t sell clothes; they sell exclusivity, heritage, and the promise of being part of an elite community.

As sellers, it’s crucial to understand this principle. If you can position your product as more than just an item—if you can tie it to a story, a status, or a transformative experience—you open the door to premium pricing.

After all, as Warren Buffet aptly put it, “Price is what you pay. Value is what you get.” And in the world of non-commodities, that value is often a matter of perspective.

But the question is, can you apply the same pricing principle or strategy if you’re an online seller who sells low-ticket items?

The short answer is yes—but with a twist. While perspective-based pricing is more evident in high-ticket luxury goods, the same psychological factors can influence the perceived value of everyday items.

Consider the success of Starbucks. Is a $5 latte inherently superior to a homemade cup of coffee? Not necessarily. But Starbucks sells more than coffee—they sell convenience, atmosphere, and the feeling of indulging in a mini luxury.

For online sellers, the goal is to elevate even low-ticket items into a category where buyers perceive added value.

Several factors affect the pricing of online products. These include the perceived quality, the uniqueness of the offering, the brand’s reputation, and even the story behind the product.

A handmade ceramic mug, for instance, can command a higher price than a generic one if its description highlights the artisan’s skill, the sustainable materials used, or the cultural heritage it represents. Customers are willing to pay more when they feel connected to a product’s story.

Winning without following the low-price trend means creating differentiation. It’s not always about lowering prices to compete; it’s about building a niche and finding your ideal customer. Online sellers who master storytelling can carve out a loyal audience.

As Seth Godin, marketing guru and author of Purple Cow, states, “You can’t be seen until you learn to see.” Seeing your product’s potential to stand out in a saturated market is the first step to creating value beyond its price tag.

So, how can you price your products to capitalize on the ever-changing perceptions of consumers?

To make the most of perspective-based pricing, focus on three key areas: branding, experience, and communication. Start by creating a brand that connects emotionally with your target audience.

If you sell fitness equipment, for example, make it about the journey to better health, not just the product. Highlight testimonials or show transformation stories to create a sense of community.

Second, craft an experience. Packaging, delivery, and after-sales support can all enhance the perceived value of your product.

A report by PWC revealed that 73% of consumers say a good experience is key to brand loyalty. Even for low-ticket items, investing in thoughtful packaging or personalized thank-you notes can create a lasting impression.

Finally, communicate your product’s unique value. Use high-quality visuals, compelling descriptions, and authentic messaging to connect with your audience.

Take eco-friendly brands like The Honest Company for example. They sell everyday items like diapers and cleaning supplies but charge premium prices by emphasizing sustainability and ethical sourcing.

At the end of the day, perspective-based pricing boils down to understanding what your customers value most—and delivering on that in a way that makes them feel it’s worth every penny.

Whether you sell Ferraris or handmade candles, your success hinges on your ability to create a perception that resonates deeply with your buyers.