[PoignardAzur]

> Often, AWS's prices are _really_ high for new services. I think this is useful for two reasons: it ensures your early adopters are those who get the most value, and it gives you a big buffer when discovering how much it actually costs to operate.

I've thought about this concept a few times lately.

Like, I get the impression that a savvy business, when starting a new product with very little competition, should start with prices as bad and guarantees as low as they can get away with, because they can always improve their offer later, whereas going the other way runs into loss aversion and consumer alienation.

Eg it's better to start at 40$/month and lower to 30$/month after a year than to start at 20$/month and get a lot of angry users when you realize you need 30 to break even.

I wonder if there's a name for that concept.

[ayewo]

The name of the concept is price skimming. The rationale mentioned by the parent is also stated in its Wikipedia entry [1].

Many may not know that behind the scenes, Amazon hires economists just like their big tech peers MS, Google.

[1] https://en.wikipedia.org/wiki/Price_skimming#Reasons_for_pri...

[supertrope]

Anchoring