If you want to sell more units, do you raise the price or lower the price? The obvious answer is to lower the price. It makes sense. On what occasions do you raise the price to sell more? Its seems counterintuitive, but one answer is to sell luxury goods. Is that the only answer?
Another answer is to bribe the other person’s buying agent! This was highlighted by Charlie Munger. What he means is that there are many instances where ‘bribery’ is common. You don’t see it as bribery, but you raise the price to enhance sales. He uses mutual funds as an example. To pay salespeople more, you raise your price to sell more.
In other words, products become expensive because they have a high cost included to sell the products.
Why are the products sold by companies like St James Place so high? To encourage the salespeople to sell more. There are many more examples.
As a consumer, do you like the idea of paying more to pay the salespeople?