Gumball Millionaire

Here’s a story about creative PRICING and VALUE and PROMOTION. Here it is…


I once listened to a business owner tell his story. He owned gumball stands – the pedestal kind with the glass bubble “head” and the “quarter-slot” payment mechanism.


He wasn’t doing great.


He had gumball machines in offices (lots of “traffic”) and everywhere he could think of — but he needed to do better or he would go out of business.


Here’s his dilemma:


He had a product that had almost NO VALUE, his product was sold everywhere (a SATURATED MARKET), it had a FIXED PRICE of 25 cents (you can’t change the price on a gumball machine), and there was NO SIGNIFICANT DEMAND for his product. But he figured out a creative way to make a killing.


Now, before I tell you what he did, STOP and THINK. What would YOU do in his situation.

  • How would you make a killing selling gumballs?
  • Don’t read further until you think of SOME STRATEGY.
  • When I tell you what he did, you can compare your idea to his.


OK. I hope you have stopped and thought about YOUR strategy to make a gumball killing.


Ready for his solution?

Here’s what he did…


In every gumball machine, he added a single gumball that he had specially made. It had a smiley face — which was worth a very special, high-value prize.


They just needed to contact him and they would get the free (but highly valued) prize.


He would then refill the machine and add
another special smiley-faced gumball
and the whole thing kept going.


Now, this REALLY WORKED well for him.

At some of his machines, he would have to refill them several times a week. I can’t remember exactly how much money each machine would hold, but it might have been around $80 per gumball machine (times 20 to 50 machines).


This promotion worked great because people were risking only 25 cents for a chance to win a SUPER-VALUEABLE prize package. So his promotion idea generated a good income for him.


But, HOW did he pay for the prize packages with his profits from his gumball machines?


He didn’t. 


He didn’t PAY anything for these prize packages. He contacted businesses and worked out a deal with them. He worked deals with places in Las Vegas and other resort cities.


For example, even in Las Vegas, an empty room for a hotel is ZERO income for that room.  And hotels often have periods when many of their rooms are empty. So it’s a benefit to them to have him send them leads–even if they are giving the room away for free.


The hotel can upsell the (gumball) buyer to another room (or an extended stay) for just a few dollars more, or they can make money when the person orders room service or eats in the hotel dining room, or plays in the hotel casino.


Anyway, it’s a WIN-WIN-WIN. The buyer gets a luxury package, the business man makes a killing at his gumball machines, and the hotel makes money during their slump periods.




So in this case, the value of his product was low, but he added VALUE to it by OFFERING the CHANCE to win something that was many times the value of his product (and the price of it too).


I really love this story because it shows real creativity.


Look again at what he had going AGAINST him:


  • He had a product with no real value.   


  • It wasn’t something that people needed to buy (like food)


  • People could get the same product anywhere (and probably cheaper if they bought it in bulk)


  • He had a fixed price


  • There was no real demand for his product.


  • And, with a 25 cent product, there was no way for him to drop his prices or offer a discount to undersell his competition.


So he was forced to be creative and it worked better than he could have imagined.


OK…here the business owner CREATED additional value for a common commodity.


It wasn’t a unique product at all but his OFFER was unique.


Whatever product you have, unique or not, it’s only a part of your OFFER (the way you bundle your product with other VALUEABLE benefits).


Any common product can be made unique by changing your OFFER.


It’s your OFFER that’s important, and it’s your offer’s VALUE that you want to protect by never discounting or devaluing it.


As always, I wish you continued success with the best products branded with YOUR LOGO!!! 🚀

Art Rothafel

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