Codie SanchezFounder @ Contrarian Thinking

Did you know a 1% increase in price can create an 11% jump in operating profit…

18 Oct 2026 · 1 min

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In this short monologue, Codie Sanchez warns business owners that they are leaving money on the table due to chronic underpricing. She cites research indicating that 80‑90% of mispriced products are priced too low, and that a modest 1% price increase—assuming sales volume stays constant—can raise operating profit by an average of 11%. Sanchez labels the hidden cost of this underpricing the "fear tax," which arises from owners' low confidence in their product, competitive matching, and habitual discounting. She argues the fear tax erodes margins, underpays employees, and shortchanges customers, and urges entrepreneurs to overcome this psychological barrier and raise prices today.

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Stop leaving money on the table with a problem that you could actually fix today. We did a bunch of research that shows 80 to 90% of all mispriced products are actually priced way too low, and just a 1% price increase with no change in volume produces on average 11% jump in operating profit. 1% to your customer, 11% to you. And if the math is that simple, what is it that's actually killing your margins? I call it the fear tax. Every time you don't raise prices because people around here don't pay that much, you match a competitor because we can't charge more. Every time you discount because you'll lose customers, that is this like tax that compounds. And it sounds obvious once you see it. But the problem is like, why do so few owners fix it? Simple. Their belief in their own product is too low. As a result, the fear tax can cost you millions. It underpays every employee who depends on you, and it shortchanges every customer you serve.