Products/services with huge mark up

hfallada

Cigarettes. Warren buffet said they make them for pennys and sell them for dollars. A packet of marlboro reds cost 50 cent for a pack of 20. But I think less taxes which are like 70% and I imagine the shop gets about 15%. The cigarette companies are still making a huge profit

MadsL

BNMC wrote: »

Gillette razor blades. Mad money, that's why I invested in an electric razor. Cheaper and less time consuming.

Or....

Double edged safety razor or straight razor. Pennies per shave and no more ingrown hairs.

MadsL

Jimoslimos wrote: »

Homoeopathic "remedies"

Sure it costs more to ensure there is no mathematical possibility of a molecule of the active ingredient in your vial of water or sugar pill.

Marketing on the other hand consists of fools telling other fools how to part with their money. Sure isn't it "all natural".

IM0

so how many of the people here are familiar with overheads, he will sell you it for cheaper if you agree to pay his staff costs, electricity, transport, rent, you get the idea, deal?

didnt think so

monflat

IM0 wrote: »

so how many of the people here are familiar with overheads, he will sell you it for cheaper if you agree to pay his staff costs, electricity, transport, rent, you get the idea, deal?

didnt think so

Obviously you do quite a bit of marking up with a comment like that

Yes we are fully aware but there is markin up and there is pure and utter taking people's money taking people for a ride.


Tske the euro spar shops during the boom years they could name their prices now that they have to compete there are plenty of offer s available

L1011

Pumpkinseeds wrote: »

That isn't my experience of generic anti-convulsants. I was given them in the UK once and had massive problems with them. The Irish Epilepsy Association is against this move as well. This is about saving money, not what's in the best interests of the patient.

Bio-availability is a different issue than the molecule being different. Its generally accepted that if someone is started on the generic that they'll have zero issues, except if they then change generic. This is where the need for sensible D-A-W rules is, but they are known to be abused in some cases by doctors in the pockets of their favourite drug rep. Which is why the US has banned drug reps giving doctors *anything*, not even pens, which does seem a bit serious.

There are very few drugs where this is a serious issue, mainly because there's very few drugs where a minor alteration in release time is an issue.

There can also be some issues where a generic is not sustained release, e.g. as far as I know one of the generic proton pump inhibitors on the market here is not, when the brand and all the other generics of the same molecule are.

ItAintMeBabe

I dont know for sure, but I'd imagine condoms have a huge mark up price? they should only cost a few cents to make, compared to what big companies like durex sell them for?

Wompa1

Bottled Water, Take out Pizza, Razors, Concessions at sporting events, cinemas etc. Food in an airport. Food on a plane. Pretty much all Apple Products. Trainers. Not so much any more but CD's and DVD's etc. use to have a huge mark up

L1011

ItAintMeBabe wrote: »

I dont know for sure, but I'd imagine condoms have a huge mark up price? they should only cost a few cents to make, compared to what big companies like durex sell them for?

Huge markup by the manufacturer, and the retailer, and then 13.5% VAT which most countries don't have. 5% in the UK and 0% in most places.

Asda sell 10 packs of Durex for £5, with the equivalent 12 pack costing nearer to €14 here.

You'd almost think they were trying to reclaim the lost profit for the years they were banned here...

locum-motion

Reading through this thread, some people obviously do not understand the concept of a mark up, so for clarification purposes: The term "mark up" is the the profit that a seller makes when they sell an item, expressed as a percentage of the price for which they bought the item.

So if a shopkeeper buys an item for €10 and sells it for €15, he has put a 50% mark up on it - the profit (€5) when expressed as a percentage of the cost (€10) is 50%.

"Mark up" does not relate the cost of production of the item to the selling price. Or at least, not in the singular. A product goes through several stages on its journey from factory to end user, and each stage will have a separate mark up of it, so there are actually several mark ups.

What I mean is this: Let's take a different item, like a jacket for example. Suppose it costs the factory €10 to make the jacket and they sell it to a distributor for €11. The factory's mark up is 10%

The distributor then ships it from Taiwan to Ireland, where they sell to the wholesaler for €12. The distributor's profit is €1, and that means that their mark up is 1/11*100 = 9.0909...%

Let's say the wholesaler then sells it to the shop for €18. The wholesaler has applied a mark up of 33.3...%

The shop then sells the jacket to a punter (you!) for €54. The shop's profit is 54-18 = €36. Express this as a percentage of the cost (to the shop) and you get 36/18 * 100 which is 200%.

What some people (not everyone) seem to be thinking about on this thread is the difference between cost to produce the item in the factory and the retail price on the high street. However, the term "mark up" on its own, without any further distinction of what is meant, means "retail mark up". In these examples, that is the 50% from the very first example, or the 200% from the last step of the jacket example.

K.Flyer wrote: »

Most things that comes out of a pharmacy has a very high mark up.

No, they don't. Typical mark ups charged in community pharmacies are in the 25-33% range for stuff that they're competing against supermarkets etc on, or in the 45-55% range if its pharmacy only, and a big fat minus 8.2% if it's one of the 72% of all the prescriptions in the entire country that the Government is paying for. Yes, that is right - the Government reimburses pharmacies 8.2% less than it cost the pharmacy to buy the drug. Overall, a community pharmacy is doing well if they can achieve an average mark up of 8-10% across the whole pharmacy.

Chucken wrote: »

Prescription drugs have a 500-3000% markup.
Buy generic folks!

pharmaton wrote: »

antihistamines, drugs generally

Complete bull54it, both of you.

Mickey H wrote: »

Petrol
Diesel
...
Take your pick...

Retail mark ups are virtually non-existent on either.

pharmaton wrote: »

just doesn't happen like that, the chemist buys at cost at a value determined by other forces. I know of one or two drugs that actually cost a pharmacist more to buy than what they can be reimbursed for on say the govt drug scheme.

Not "one or two". All drugs.

Glico Man

Soft drinks in pubs/bars.

Caught a glimpse of our stock ordering sheet the other day, £4.60 for a crate of 24. We sell each bottle for £1.95.

MadYaker

Ha I worked in a bar a few years ago, those little glass bottles of coke were around €2.50 as mixer or whatever, we used to buy them in for 22c.

seven_eleven

All take away food.

Qualitymark

Cigarettes

Gambling

Booze

(all these are stupidity taxes.)

Plenty of the other products mentioned seem expensive because labour costs haven't been factored in, like some of the pharmaceutical drugs, which may have cost several years of expensive labour (scientists' and doctors' wages) in development. (Though in Ireland, our government has negotiated fees that are over the odds; who knows why the honest folks would do such a thing?)

Others, like ex-politicians' and businesspeople's speaking fees, are a combination of stupidity tax (who in their right mind wants to listen to these leeches?) and pay for the speakers' years of experience.

Illegal drugs have huge markups, and at every level of the market they're cut with all kinds of disgusting junk to increase the profit of the seller. Also (in the case of marijuana) the most genetically engineered plant on the planet.

The markup on a lot of services - lawyers', accountants, journalists', etc - is dropping like a stone at the moment, except for those who work for the government.

Sky King

Surprised nobody has mentioned tea and coffee yet... (in liquid form I mean not in the supermarket).

Massive markup on tea and coffee in a petrol station or a busy cafe.

donegal_road

Strangely, considering Ireland is undergoing the biggest property crash in any Western country since WW2, no one has yet mentioned the huge mark-up there was, and seemingly still is, on selling a house vs cost of building. Depending on the size of the housing development, a developer could build for 1 and sell for 8, so a house built for €20k could be sold for €160k if he got his sums right.

Then the bank would take their pound of flesh with a huge mark-up on interest repayments over 30 odd years. So what will have cost €20k to build, will eventually cost (by the time the mortgage has been paid off) approx €290k.

Sky King

donegal_road wrote: »

Then the bank would take their pound of flesh with a huge mark-up on interest repayments over 30 odd years. So what will have cost €20k to build, will eventually cost (by the time the mortgage has been paid off) approx €290k.

Yes but you'd sell it on for 2,900,000 after 2 years anyway so what's the problem!!

Stinicker

Rafa1977 wrote: »

Timing Belt. Use to work in car parts warehouse that sold to all of the garages in ireland, and some timing belts would be sold for as little as 5 euro.

I have a timing chain in my car! far superior system, snapped timing belt = blown engine usually.

I know a person who buys in her product from the far-east and for every €1,000 she will spend, she will earn between €18 - €20,000 by the time she has the product sold in this country. Her product you ask? Small tourism knick knack souvenirs and memorabilia of Ireland.

lmaopml

Rafa1977 wrote: »

Timing Belt. Use to work in car parts warehouse that sold to all of the garages in ireland, and some timing belts would be sold for as little as 5 euro.

The problem with a timing belt change is not it's manufacturer but the labour charged for changing it, which can take a couple of hours granted - it takes time no doubt, but the 'genuine' belt is totally overpriced, especially when it's made by the same company as the spurious one is...

Buyers beware!

martinedwards

All righty, another one...

draught fizzy water in a bar.

in the 90s, just after Perrier bombed because of traces of benzine in thier lovely pure (!) mineral water, the restaurant I worked in got a fizzy water filtration system.

about the size of a VCR.

two taps on the bar top, on chilled still water, one chilled fizzy.

we had the Environmental health bloke check it for us and it was within a few atoms of being medical grade pure.

At the time, the going rate for a glass of ballygowan (in a classy restaurant) was £1.20

we sold ours at 99p

the customers loved it and thought it was a bargain (we still had ballygown bottles at £1.20 if they wanted them.... no one did)

and the cost of putting half a litre of delicious chilled fizzy water in a glass?

1/8 of a penny.

is that 79200%?

the machine cost about £3k and it was paid for un under 6 weeks.

BUT IT WAS WHAT THE CUSTOMER WAS HAPPY TO PAY.

if we charged 5p a glass thay'd have said "must be poo, not touching that"

incidentally, it also saved us a fortune personally, because rather than staff paying cost for soft drinks (the boss was a decent spud, ANY drinks were at cost, but we were only allowed softies on duty) but we were allowed fizzy water and cordials for free, and it also helped ourstock control as there were fewer non payments.

Crooked Jack

I used to work in dominoes and even their most expensive pizza costs them less than a quid to make. its then sold for about £18 to £22. Even the average £10 to £16 pizzas render a huge profit when you consider they cost 50 to 70 pence to make.
Ill admit theyre nice though. especially when i made them. i was a master.