How Did it Get So High?



How does the cost get so high? We look at our products we wish to buy in the store and we wonder; how is it that this piece of crap costs this much?!?!? Well if you bought it directly from the producer you might understand the costs. It would just be the cost of the product plus a little service fee for producing the good. So what happens from the producer to the market where we shop? The producer tacks on that “service fee” for actually making the product but they sell to a wholesaler. The wholesaler then tacks on another “service fee” almost just for getting the product. Sometimes regular consumers can buy from wholesalers but typically the wholesaler will then sell to a retailer that normal consumers buy from. In order for the retailer to make a profit from this whole chain, they too have to hike up the cost just finally selling it to the final consumer. So regular consumers are paying not only for the product itself but the labor put into making it, the transportation of the product, and just the convenience of the product being in the store where we buy other products. Generally the producer does not have a high mark-up, the wholesaler has a decent sized mark-up, but the retailer is the one who marks up the  price by sometimes as high as 100%. They can do this because the normal consumer does not know how to get the product cheaper or just doesn’t care. The retailers are charging us $100 for a shiny $20 bill that they didn’t make. Bottom line, look for the sales but make sure they are really sales before you purchase.

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