Does The Pink Tax Exist? Signs Point to NO. Here’s Why.

“The Pink Tax” is a term of ignorance used by people who seem to observe that products with pink packaging or otherwise feminine themed packaging, are charged a higher price than essentially the identical item but packaged in a more masculine way.

Here is one example of someone complaining about it, who doesn’t realize how it works:

The Pink Tax!

I asked my instagram followers what videos they’d like to see, and I got an overwhelming response: The Pink Tax! The thing is…i had never actually heard of it! But once I researched it, I realized I knew aaaaaaall about it. 😳Nobody likes taxes, especially hidden ones. Allow me to introduce you to…The Pink Tax! 💕Join Girls Gone Global (by Dear Alyne) – an all women group to discuss "The Pink Tax" and many other female based topics!Not a girl? Let's be friends on instagram @dearalyne

Posted by Dear Alyne on Wednesday, July 4, 2018

(incredulous tone) “Companies put higher price tags on products marketed to women, simply because we are women.”

No dear; allow me to economics-splain.

Let’s say you have a single product, and want to sell a bajillion of them. Different kinds of packaging will sell differently as a matter of observation; if you sold the same product, separately, yellow packages and purple packages, even if the yellow version outsells purple, you’re still making the purple number of sales above what you would have made by only selling the yellow, assuming there are no shortages where people had no choice but to buy the yellow if purple ran out.

Let’s say you’ve tried most of the colors and some seem to sell okay, but more specifically, pink and blue sell far and above the best of any of the others, so you focus all your efforts on those two. Keep in mind you’re not even bothering with marketing to male or female yet, you’re just experimenting with colored packaging.

If you’re a maker of this product, chances are you don’t really have a lot of ground for insisting that your product sell for a very specific price. In many situations you just get lots of orders from a big retailer demanding a large volume of your product for x price, and you focus on cranking those out.

If you’re a retailer, for the most part you get to choose what you sell something for. You pay the maker a big sum for a zillion of them, and it’s up to you whether you want to sell it for $0.05 more than you paid for it, or $5.00 more than you paid for it.

Now, there is a team of sales analysts that will raise and lower the shelf price of the items in their store, by cents at a time, to gauge whether shoppers will stop buying them if the price gets too high, or will buy them more frequently if the price only goes down just a little.

They have a zillion of this one kind of item, so they’re still making a profit off whatever price they set it at, but are constantly analyzing whether they can make more profit by doing certain things to the price, such as by having sales so people will come to their store to check out the new price and hopefully buy something else too.

They can also market a “new lower price” when it is reduced from a price they had raised it up to, when erroneously testing whether anyone will buy it that high, but realized “oops, that was too high” and drop it back down again to try to bring shoppers back.

Now imagine that, for whatever reason, the pink version of the same product still sells consistently as the price rises, but the blue version of the same product loses sales when the price rises by only a little.

This isn’t a tax, it’s just a normal market observation. It’s not because you’re a woman; it’s because you personally insist on paying more for the same item because of the packaging, rather than just buying the cheaper blue version.

If men bought the pink version, there wouldn’t be really any way to tell whether they did — the analysis is essentially on the hard sales figures, regardless of who buys it.

The retailer doesn’t really care if you’re actually a woman buying the razor or whatever, and therefore trying to tax “you” for buying it “because you’re a woman” but rather that, very simply, whoever keeps buying the pink ones, will still buy the pink ones even if the price goes up.

If the pink version will keep selling for higher, then the pink version’s price will stay high. If the blue version won’t sell for higher when it is raised, then the price will go back down, or may become discontinued to be replaced by something else that might sell better like how the other colors were also eliminated.

A lot of people will have “their brand” they always get regardless of the price to make shopping simpler, and may never waver from it unless the product itself changes too drastically.

As for the male/female aspect, there’s not really a motive necessarily to intentionally sell to specifically women or men — they just want higher sales figures regardless of who buys it. If women buy the pink one at a higher price, great. If it’s men who are buying it at a higher price, great.

Regardless, whoever keeps buying the pink one, will be willing to pay the higher price just because it is pink and offers no other additional features than the blue one.

If there is a feminine hygiene product, they may try to market the identical pad/etc to “sporty” women or to more casual/feminine women, even though the pads/etc are identical. They aren’t creating a “sports” tax or raising the price “just for being a sporty woman”; they’re just increasing sales of the same item based on variations of packaging that seem to sell regardless of how much they jack the price for, within certain tolerances.

Same goes for multi-packs of something. You may see a shelf price of $4 for a 2-pack, and $3 for a 1-pack, or $4 for a 1-pack and $3 for a 2-pack.

If the very idea that you’re “saving” more by buying one or the other, or that the company is “losing” more, gets you to buy the thing that they’re originally only paying $0.50 for, they’re still making a large profit off either kind, and can raise the price of the differing packs as if they were their own unique items, to see whether specifically 2-packs sell better or worse if lowered, independently, of whether 1-packs sell better or worse if lowered, independently of the pack-size.

Let’s say you’re a retailer and have 100 different products, and some of them are duplicate items just with different packaging, and you raise the price by a nickel on everything. You may observe that 75 items will still sell well, while the other 25 dropped in sales, so you put the 25 back to their lower price and can now advertise a “new lower price” on the those 25. You’d still be making a profit on all 100, even at the lower price, but you could be making more profit by bumping up the price more on the 75.

Out of those 75 items, you find that bumping the price up $0.15 reveals only 30 still consistently sell, so putting the other 45 back down to the +0.05 price (with a “new lower price” ad, even tho it’s technically still higher than the original 100 price) will resume your previous sales figures.

Now, out of those 30, you bump up $0.40 and 16 still sell really well, but the other 14 need to be reduced back to the +$0.20 (0.05+0.15) price. You’re not “taxing” people $0.40 just for buying whatever those items are, but just experimenting to see whether they will-or-won’t sell just from raw numbers.

You could even drop the price back down to the original 100 low price for a week, and get an influx of customers seeing the larger price difference (all while you still make a profit off the original 100 price), and that influx will possibly buy several other things while they are on site, and therefore increase sales of your other things.

You might even notice that since certain items at a reduced price will increase sales of other similar things, such as toilet paper when there is a sale on plungers, and you can voluntarily sell one thing at below the amount you paid for it and essentially lose money from its sale, if the increase of the sales of the other thing they bought with it at the higher price fills in the gap.

Long story short: There are easily a zillion things happening all at once to explain why any single product is priced higher or lower, and none of those reasons are “because you’re a (people group).”

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