The 99 Cent Strategy

Dave Gold is amazing. He started a store where everything is 99 cents. No big news there, but his margins average 40%, which is, to be honest, amazing. Here's where the idea came from:

As a kid, dave gold worked at his parents' grocery store in Cleveland, and later he and his sister bought their father's liquor store in Los Angeles. It was there that he had his epiphany for the 99-cent concept. To move slow-selling wines, Gold slashed their prices and soon uncovered a reliable phenomenon: When a chianti or a chablis was marked 99 cents–not 98 cents, not $1.02–the bottles flew off the shelves. "It was like a magic number," he says. (Academic research into this phenomenon is mixed. A 1998 study on psychological pricing found some increase in sales for items marked below a round number, but other studies disagree.)

They even sell wine. Like I said, amazing.