Mental Exercise: Price Free Retail Stores

This past summer, I entertained the idea of purchasing a couple tables at the community garage sale and loading them up with my basement full of stuff-in-need-of-a-better-home.

And price everything at $0.

Primarily, because I can’t imagine spending the time determining a price for each and every thing, labeling it, handling money, and risk justifying the price to sophisticated hagglers. None of which sounds attractive. All of which keeps me from the goal of unloading unwanted inventory.

For what? Just a couple of greenbacks. Definitely not enough to cover my time managing the inventory, renting the space, even writing this post.

So, why does Wal-Mart, TJ Maxx, Target, Goodwill, and your resale shop put price tags on their inventory?

What if they didn’t?

What if we could walk into one of those stores and walk out with whatever we wanted, free and clear?

That’s very similar to what we do at Google, Craigslist, Kernest, and Facebook every day. We visit the sites, get the answers and resources we came for – and paying in our time, effort, and return visits.

Back to our imaginary price-free store.

Without prices – there’s little need to have a checkout area. So, the costs of pricing items, handling money (cash, credit) and the costs associated with fraudulent transactions are all eliminated. As is the costs of security to watch the employees, customers, and inventory.

Without prices – I doubt we’ll have carts or baskets – or even product packaging (little need for UPC codes – and it deters ‘re-sale’). All of those things would make moving lots of things easy. A freetail store will probably be structured to make moving more-things-than-you-can-carry very difficult; narrow aisles, narrow doors, etc.

Inventory would probably be more volatile – runs on bottled water and toilet paper during severe storms would be more pronounced. A similar problem exists at TJ Maxx, Costco, et al, today. Sometimes when something out of stock – it’s never coming back. Probably wasn’t in my size anyway.

But how are the shelves stocked in the first place?

Perhaps this freetail store is 100% financed with market development funds – like broadcast television being 100% financed by advertising. Manufacturers use it to quickly get their newest, most innovative products in front of potential customers – without the barrier of a price. Or like TJ Maxx and all the stuff in my basement – these things are obsolete just need to be unloaded fast.

Think of a product like your free mobile phone or your XBox 360. Without network connectivity – these products are far less useful, and those service plans heavily subsidize the device cost already. Why not completely?

I’ve only just started Chris Anderson’s Free. I’ll update this post with any A-HAs I pull from it.

Have you heard of any retailers that have experimented with rolling back the price to $0 – or sci-fi novels describing how a freetail world might work?

Elsewhere:

“Also, freeing yourself (pun intended) of paying customers early on would seem to allow you to make more radical moves (pivots), since you don’t have to worry about angering anyone that has given you money and expects you to deliver on their expectations in return.” – Michael Harry Scepaniak

“A new economy. Nobodies pay, but important people are paid to use your brand cell phone/mobile device. I’m sure that’s the future.” – Dave Winer

“People were in there getting groceries and just leaving money at the register because there was nobody to take the money.” – resident Leanna Havens on a Roseville, CA Safeway store left unlocked on Christmas Eve

UPDATE: Listening to Chris Anderson’s ‘Free’ audiobook – I heard about Sample Lab, a franchise retail environment very close to the model I describe above.