How much does a gallon of paint cost? You probably don’t have an exact price in mind. And there are many different types of paint, so there naturally cannot be 1 single price. But let’s say a gallon of paint costs about $20. If that paint not cost $20.20 would that impact your decision to buy that paint?

Imagine you decided to repaint your house and you created a perfect design concept and determined the ideal color for every room. You go to the hardware store to make your purchase and you have 2 options. You can get the exact color you want and it will cost you $20.00 per gallon. But, for $19.80 per gallon you can get the same paint, but the color is slightly different than the one you wanted. Will you choose to save 20 cents and go with the off color, or simply pay a few pennies more to get the color you want?

In both these cases, price is not a significant driver of your purchase. Even if price was important to you, the difference in price would not make it a relevant factor in your decision. That is why a 1% price increase at LL will boost profit without negatively impacting sales.