Sat, Jan 8, 2005, 10:17pm firstname.lastname@example.org (Guess who)
Which makes your opinion credible, of course?
110% more cridible then his, and that's no bullshit.
Success is getting what you want.
Happiness is wanting what you get.
- Dale Carnegie
In my line of work METAL I could turn those things out by the 100's if I
had too. They are so easy to make. We have a laser so I could cut them
accurately......I agree that a piece of plywood cut in a triangle wood do
the same thing. I could make the aluminum ones for less than 10.00 a
I'm sure you can. What you can't do for $10 a pair is print a catalog,
mail it out to your customers, inventory them in a warehouse, buy the
shipping supplies and pay someone (along with their benefits and insurance)
to pack and ship them, do the billing and deduct them from inventory on your
database. I'd be happy to call you on your 800 number and order a pair
Seriously, I'll take two pairs for 20 bucks.
Typical selling price for items sold through the retail distribution system
have selling prices about 4X the cost of material. Next time you chug a
beer, drink a store bought cup of coffee, replace a printer ink cartridge,
apply a gallon of paint, see if you can justify your statement in light of
the cost of raw material.
Yes, often the cost of materials AND labor is bumped 50 -100% going to
the wholesaler, who then bumps it again 100%, and then the retailer
bumps it 100% again.
So, if it cost 3$ in material, and $2 in labor, it goes out the door
to the wholesaler for $10, who then sells it to the retailer for
$15-$20, who then marks it up again. Everyone at EVERY LEVEL has to
make a profit off that item that cost $3 in materials
That markup seems pretty high Edwin. There is more than just the cost of
raw material to be considered. There's the cost of manufacturing and
potentially middle- costs. That would make the markup on the "produce" less
than the 4X for raw materials. The poster we both replied to and the
comment we were both commenting on was a finished goods cost of $10.
The finished cost of $10 is from someone that intends on making an
equivalent himself; nothing to do with actual cost. He has not responded
yet to my offer to buy them at that price and probably will not. The cost of
these brackets is less than the $10 he mentioned.
I'm basing my opinion on what I see and what I have experienced. Take a
look at the parts in question. Now look at the operations to make them.
Shear a blank, punch press, brake, polish, check tolerances, package, label,
warehouse, ship, bill. Now the seller orders them, receives, warehouses,
prints a catalog, advertises, receives orders, warehouses, picks order,
packs, ships, bills. We've not even considered insurance, operating costs,
utilities, employee benefits, taxes, and finally some profit.
I'm basing my opinion (and we both only have opinions) on my experience in
doing pricing of manufactured items in both the retail and industrial
markets. If you have experience with this, can tell me the steps of
manufacturing and associated cost, travel through the supply chain, I'll
willing to listen and perhaps change my opinion.
Not related to just this item:
Funny how many people complain about the perceived high cost of an item and
also complain that industry and retail don't pay their employees enough of a
wage to make a living. The retailer is gouging us and making a fortune and
at the same time retailers are filing for bankruptcy and their employees are
complaining they don't get paid enough and have poor benefits. I do know
that I sure don't have the answers.
Likewise I base my comments on certain experiences. Mine might not totally
parallel yours but I do have a great deal of experience in goods in the
supply chain and the incremental markups. I have never seen the types of
markups that have been spoken about here as a normal part of the supply
chain. What I have seen and in this point we might be closer to agreeing
more completely, is that specialty shops will tend to price higher simply
because of what the market will bear rather than because of costs incurred
throughout the supply chain.
A well taken point. To a degree, I'm a walking contradiction. I'm a
capitalist at heart and have no philosophical problem with profit at all.
Especially large profits. On the other hand, I'm not often inclined to
contribute to those profits without seeing the value for the product. I'm
fine with the merchant or the manufacturer getting all they can get, but I'm
equally fine voicing my opinion on the worth of the product. Likewise, I am
amused at those who complain about high prices and then complain about low
wages at places like Wal Mart, etc. For the most part, I don't believe that
most major retailers are really gouging all that bad. Competition keeps
things somewhat in check. It's just too easy for people to sit back -
usually too uninformed, and complain about the huge profits the corporations
are making. The simple fact is that profits generally only come through
providing what people want.
Ah yes - a somewhat unique industry. Furniture is likewise marked up in
huge ways, but both of those stand out quite uniquely in terms of the mark
up they enjoy.
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