In 1969, the average pair of women’s stockings in the United States sold for roughly 79 cents. They were sold in department stores, tucked away in drawers or behind counters, requiring a clerk’s assistance to navigate a confusing array of sizes and shades. Hanes, a company then struggling with stagnant margins and a commodity-market trap, decided to ignore the 79-cent ceiling. They launched L’eggs, packaged the product in a plastic white egg, and placed it on freestanding carousels in supermarkets and drugstores. They priced it at $1.39—a 75% premium over the market average. Within two years, L’eggs became the best-selling brand of hosiery in American history. The product inside the egg was virtually identical to the one in the department store drawer. The difference was a calculated manipulation of the environment, the accessibility, and the perceived utility.

The tension in modern pricing is that most service providers and product manufacturers believe they are paid for the work they do. They are not. They are paid for the value the customer perceives, a metric that is notoriously decoupled from the cost of production. In a study of 2,000 corporations, McKinsey & Company found that a 1% increase in price, if volumes remain stable, generates an 8.7% increase in operating profits. Yet, most businesses remain terrified of the 1%, fearing a mass exodus of clients. This fear stems from a fundamental misunderstanding of why a premium is paid. It is rarely about the "thing" itself; it is about the mitigation of risk and the specificity of the outcome.