Taylor Wells

10/09/2026

Just because you can change a price instantly, should you?

Electronic shelf labels could make supermarket prices change multiple times a day.

An Instacart pilot found the same grocery item could vary in price by as much as 23% between customers.

Technology makes that level of price differentiation possible.

But value based pricing charges differently because customers receive or perceive different value.

Charging more simply because an algorithm believes someone will pay more is price extraction.

And it relies on a growing information asymmetry: the business knows more about what you are willing to pay than you know about how your price was set.

Price extraction can lift margin today while destroying pricing power tomorrow.

03/09/2026

Amazon just got sued for tens of billions by the FTC and 22 states. Not because it tested what advertisers would pay. Because it tested what they'd fail to notice.

This is the fourth time in three years Amazon has been sued over how it prices things. Internal documents cited in the FTC's case show Amazon added an undisclosed "soft reserve price" surcharge starting in 2018, on top of what it told advertisers was a straightforward second-price auction.

One executive reportedly hoped advertisers "don't notice and decrease bids." The share paying full bid price jumped from 30-40% in 2021 to roughly 80% by 2024.

Amazon's defence: cost-per-click stayed flat, conversions rose 24%, advertisers saved $8 billion overall. Possibly all true.

But there's a difference between testing what a customer will pay, and testing how much deception they'll tolerate before they notice. The first is pricing strategy. The second isn't, because it's measuring the size of the lie you can get away with, one basis point at a time.

01/09/2026

B2B buyers want the exact transparency their own customers say they're not getting.

74% of B2B buyers want clear pricing upfront. 69% call unclear pricing their biggest frustration with vendors.

Meanwhile Reynolds Wrap is quietly raising foil prices through small, frequent changes as aluminium and resin costs spike. Yeti is scrambling to requalify raw material sources. And at the end of the chain, Australian shoppers are the ones absorbing it, one told the ABC her toilet paper "shrunk in width by two centimetres," while supermarkets post record profits.

Every business in that chain wants transparency from the supplier above it, and gets accused of hiding the ball from the customer below it. Nobody is actually giving what they're demanding from someone else.

31/08/2026

Nestlé, HUL and Kraft Heinz just proved price-pack architecture works. Mondelez just proved what happens when you skip it.

Nestlé's volume is now growing faster than its price, a clean reversal from a year ago when growth was almost entirely price-led. HUL built a separate architecture just for quick commerce, a channel growing 40-50% that buys nothing like a weekly shop. Kraft Heinz is using pack optimisation to protect volume through inflation, not to dodge it.

Mondelez kept pulling the price lever instead. The market's already called it: customers moved on.

Here's the catch even the good players face. 85% of Australian shoppers have noticed shrinkflation happening, and 6 in 10 don't trust brands to be upfront about cost-driven changes.

Good architecture no longer speaks for itself. Explain the value before the customer starts asking, or someone else in the category will.

Sources:
How FMCG Firms Can Get Their Price Pack Architecture Right Using Analytics https://taylorwells.com.au/analytics-for-fmcg-companies/
Inside FMCG, "The grocery value equation is changing – and shrinkflation is testing trust," August 24, 2026. https://insidefmcg.com.au/2026/08/24/the-grocery-value-equation-is-changing-and-shrinkflation-is-testing-trust/

27/08/2026

Your costs are rising faster than your prices. That's not a guess, the RBA just confirmed it.

The RBA spoke to around 240 Australian businesses this quarter. The finding: firms report elevated cost growth, but customers are pushing back hard enough that selling prices are expected to grow by less than costs, real margin compression, not a one-off.

Wages are a big part of it. The Fair Work Commission just lifted award wages 4.75% in June, more than most businesses expected.

The answer isn't a smaller price rise across the board. It's working out who can absorb 5%, who can only take 2%, and who shouldn't see an increase at all.

That's value-based price-rise strategy. Not softer numbers, sharper targeting.

Read more:
Is Margin Expansion Still Possible Amid Rising Cost Pressure? → https://taylorwells.com.au/margin-expansion/
https://www.rba.gov.au/publications/smp/2026/aug/box-a-insights-from-liaison.html?utm_source=chatgpt.com

26/08/2026

A $2 trillion SaaS crash. A partial recovery. Another selloff this week. The market isn't panicking for no reason, the pricing model underneath SaaS has a real structural problem.

Supply side: per-seat pricing worked when software cost almost nothing to scale. AI breaks that math, real compute costs scale with usage, and usage is exploding. Even Microsoft lost an estimated $112 billion this month, despite Azure revenue up 43%, because it's racing to build the data centres and AI power needed to run products like Copilot at scale. Costs are up, hard.

Demand side: customers now believe a cheaper AI alternative exists, whether or not it's actually better. Atlassian and Salesforce, both built on per-seat pricing, took the hardest hits, exactly the workflows AI already automates well. Belief alone weakens pricing power, proof or no proof.

Costs climbing. Confidence in the old model cracking. This is the same "value gap" that nearly sank Splunk in 2013, using software for years without ever proving what it was worth. AI just made that gap impossible to ignore from either direction.

Sources:
https://www.chargebee.com/blog/saas-business-model-ai-monetization/
https://tech-insider.org/saas-stock-crash-ai-agents-2-trillion-2026/

The $1 trillion SaaS selloff wasn't a verdict on software. It exposed something more specific: companies that built strong products on brittle business models. Here's what that means for incumbents navigating AI.

25/08/2026

Just Because Woolworths Cut a Thousand Prices Doesn't Mean It's the Cheapest. Aldi Still Wins the Comparison.

Woolworths has cut prices on more than 1,000 everyday items, long-term but not permanent, on the staples people buy every week: meat, eggs, cheese, household basics. Read one way, that's less about winning on price and more about ending the psychological guessing game of whether a "special" is real or just marked up first. That kind of consistency only works if it holds up under scrutiny. CHOICE's most recent basket comparison found Aldi around nine dollars cheaper on a comparable list. If the strategy is asking shoppers to stop comparing, it needs to survive the moment someone does.

Sources:
https://taylorwells.com.au/everyday-low-pricing/
https://au.lifestyle.yahoo.com/woolworths-major-cost-of-living-move-for-meat-cheese-pantry-staples-spend-less-220932824.html

25/08/2026

You Bought AI to Boost Productivity. So Where's the Return?

Even AI can't estimate its own token cost, out by a factor of 30, per the researchers who tested it. You bought the productivity story eighteen months ago. Can you now name which three AI use cases are paying for themselves? If not, you don't have a strategy, you have a subscription nobody's audited.

Sources:
https://taylorwells.com.au/ai-pricing-strategy/
https://www.abc.net.au/news/2026-08-24/ai-costs-rise-for-australian-business-despite-cheaper-tokens/106995044

24/08/2026

Two central banks, two economies, one B2B manufacturing sector, the exact same warning: your customers have stopped absorbing your price rises.

The US Fed's own manufacturing survey found it: 37.5% of manufacturers say their customers are more price sensitive than last quarter, and 80% expect competitors to raise prices anyway, within four months.

The RBA found the identical pattern in Australian manufacturing. Costs are still rising, but selling prices are expected to grow by less than costs, real, deliberate margin compression, because B2B buyers won't wear the full pass-through anymore.

Same signal on two continents, same sector. "Just raise the price, everyone else will too" isn't a strategy for manufacturers anymore, it's cover for not having one. If you can't say exactly where your customer still sees value, you're not pricing. You're gambling that nobody notices.

Read more: How to Increase Profit Margin in Manufacturing Despite Rising Costs → https://taylorwells.com.au/how-to-increase-profit-margin-in-manufacturing/

18/08/2026

The better AI gets at doing the work, the more the traditional SaaS seat-based model breaks.

One employee can now oversee agents handling work that once required several people, creating more value with fewer licences. That is why SaaS companies are shifting towards usage and outcome-based pricing. Intercom’s Fin charges per resolved conversation, while Salesforce uses conversation and credit-based pricing for Agentforce.

The challenge is protecting margins while charging for value. AI creates variable costs through compute, inference and orchestration, making flat fees risky for high-usage customers. But pure usage pricing creates unpredictable bills, while outcome pricing can create disputes over attribution.

When AI changes how value is created, pricing must change how value is captured.

Read more: Is It Time for SaaS Companies to Embrace Usage-Based Pricing? → https://taylorwells.com.au/saas-usage-based-pricing/
https://techround.co.uk/business/what-happens-to-saas-revenue-when-ai-product-works-so-well-customers-stop-buying-seats/

See why SaaS usage based pricing model adoption is rising fast and how your business can benefit from the shift.