Freak Shots: Honest Mistake or Snack Gouging?

Blog reader Abe Mirrashidi sent us this photo of a vending machine at his workplace which has a most unusual pricing scheme. The Cheetos and Doritos in “A0” and “A2” sell for $.65, and are identical to the Cheetos and Doritos in “B0” and “B2,” both of which go for $.75. You can guess which slots get sold out first.

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Tonya

Supply and demand!

Raymond

Price discrimination. Short people must pay the more expensive price if they can't see the top row.

mannyv

Isn't this a great example of demand-based pricing?

-BKHKNY

So the vending company does not have to work so hard, spend so much on supplies, yet still make the same amount?

Me

I wouldn't be surprised if this increases the sales of the chips over just having them all at 65c, since people will feel like they are getting a deal.

BSK

Or maybe they just forgot to switch out the labels...

James

Maybe the machine re-filler ran out of 75-cent chips and just decided "hey, let's shove these extra cheetos/doritos up there so I don't have to carry them back to my truck"

Tim

Would be interesting to see if after all the Cheetos sold out in A0, would people pay the 10 cent extra to get the Cheetos from B0, or would instead rather just get the Doritos for the same price from A2?

Georgia

A simple case of over analyzing: perhaps this is just the result of the delivery man being too lazy to pay attention to what slot he is stocking. I've seen them re-stock the vending machine in my office and they don't seem to pay to much attention. They also seem very hurried.

Maybe I'm being too naive. Then again, is accusing someone of laziness much better than conjuring up a conspiracy theory? Nah, I'm just a cynical New Yorker.

DaveyNC

There is a website out there (sorry, can't remember the name) that puts up a new t-shirt design every day. However, they only sell 100 of that design each day and the number of the shirt is the amount you pay. So, the first shirt is $1, the second shirt is $2 and so on. All 100 slots are displayed and the buyers can choose their price. The cheap shirts, not surprisingly, go first and the $69 shirt sells early, for stupid reasons. Same product in each slot, only the price varies.

Jim Purdy

Maybe it's a test site for niche marketing.

Will locations with affluent consumers, believing that "You get what you pay for," and that there is high-status in conspicuous consumption, choose the pricier items?

And will the blue-collar price-conscious shoppers buy the cheaper ones?

Or will both groups be happy with their snacks that cost 11 cents each to manufacture and distribute?

And the frugal buyers will buy the 65-cent snacks, complain about them, and demand a 75-cent refund.

blogsthatmakemethink.blogspot.com

Harvey

heck, I'd pay an extra 10 cents to save my chips from that extra 9 inches of free fall.

mike

Why not? You sell the first row out and as the supply dwindles down to the 2nd row, you charge a bit more. I might now buy from that 2nd row, but others would.

While we are on the subject, I cannot tell you how many times I see products sell out quickly while others remain unsold and yet the vendor or supplier does not adjust. This happens in stores, not only in vendor machines.

I've been on million dollar IT projects to use forecasts for orders, yet this simple knowledge seems to be overlooked.
In IT jargon, look at product 'deplenishment' and increase or decrease 'replenishment' inversely.

Sorry if I sound like a nerd....

David Jones

A vending machine guy told me, after I mentioned that it would be a good idea to stock the machine with things people actually buy, rather than cheese crackers etc. that never seem to move, that a bunch of guys in the Midwest somewhere decides what to put in the machines and he had no control over it.

I guess those guys had a hangover when they decided what went into this machine.

As a side note, it looks like vending machines are a bit like self-service groceries: producers offer "incentives" to hilite their product at the expense of others, and may also indulge in "blocking" by supplying something, like the cheese crackers, that occupies space even if it doesn't sell, thus denying that space to rivals.

Leon

There's an interesting pricing joke in the canteen at my work place. They sell o-juice in transparent plastic bottles and the same brand, same volume, same o-juice in tin cans. Tin cans are 50 cent cheaper than the plastic bottles, but much less popular. Salespeople there say people buy many more bottles. My guess is--they are always on the lower shelf, people somehow mistrust tin cans to contain something healthy.

Cal Skeptic

So why not just buy a five pound bag of chips for $4 at Costco and take a few to work each day in a sandwich bag? Much less expensive and no gouging worries!

Scotty

The ones on the bottom are more expensive because they will incur less damage on the way down then the ones on top (more damage prone).

Peter

No, no...surely you've got it all wrong. The chips in slot A0 are the knock-off/generic brand. If you read closely, the package states: "Cheepos".

kevin

Next up: future contracts on Cheetos. Put $0.10 into the machine to reserve Cheetos at a guaranteed price, and let the price float.

I'm an engineer. I'm far more concerned with the coke bottle machine that has a very complicated automated retrieval system/ conveyor that wastes far too much time and energy to deliver the product.

East Coast Phil

You can get Doritos in a vending machine for 65 or 75 cents in the US?