The 'markup' in this context means the difference between what it cost to produce a product and its selling price...so this does not include the cost of advertising. I suspect the highest markup in the economy is to be found in the high end wristwatch market. As an example, this is a Vacheron Constantin Overseas Chronograph Automatic on sale for $37,884. http://www.prestigetime.com/item/Vacheron-Constantin/Overseas-Chronograph/49150~000r-9338.html But you know you can get a replica for a few hundred dollars. So what is the difference? First, the replica is going to have a gold plated case, not 18K solid gold, but that only accounts for less than a thousand dollars in raw material. The replica movement will be very slightly less accurate and durable...but is that really worth an extra $35,000, the price of a luxury car???
I don´t know why this thread by long time poster carcano got moderation required. Perhaps all new threads will be moderated? - I sure hope not. I don´t think this tread is going to hang around very long before sinking into the archive abysis, but that is no reason IMHO not to OK it -i.e. remove the moderation still required (so all can see it, I think.) I´ll even be kind and make a comment: It is my understanding (a few years old) that $150+ Tennis shoes leave Asian factory at less than $3 production cost. So when volume times mark-up product is considered, they are a bigger rip-off on the buyers than the OP watches. While here I´ll note that new thread: "how to draw spongebob dragon art" with links to sales points did not get my moderation OK, but when it was denied, it still appear in the B&E listing I see (perhaps only I see?) so I then killed it, but did not yet band the poster - perhaps later if tries to hide comercial spam in B&E again.
A $5 toothbrush costs %0.02 to produce. How about Vitamin C tablets? Or blood-sugar test strips? Very small items can have a huge % markup and we don't even notice.
That doesnt sound right Billy, the highest fashion markups are up around 1000%...ten times the price of production, according to these articles. http://www.toptenz.net/top-10-biggest-price-markups.php http://money.howstuffworks.com/personal-finance/budgeting/5-retail-markups4.htm Your $3.00 to $150.00 leap would be 5000%. We have to take into account the cost of the factory itself, not just the daily cost accounting.
My "a few years ago" is a little more than a decade, when China had very low wages and sweet shop factories that for shoe production were mainly just a chair for the exploited rural girl to sit in while she either hand cut pieces from sheets of rubber or cloth for two girls seated next to her to sew and/or glue together. Back then the materials were not expensive and there were no LED flashing when you walked etc. Even today shoes produced in the poor third world have very little "cost of the factory" in their "factory exit price" but few are made in China anymore. In Vietnam or Indonesia, etc. the cost of making shoes is almost all the labor and materials cost still. Brazil was once a major maker of shoes for the world, but no more as the value of it currency has become too high and salaries have risen in both nominal and real terms. Like the rest of the world, Brazil now imports most of it shoes, except in the warm climate many use simple "flip-flops" (slab of rubber like plastic with thong to go between big toe and one next to it.) They are very cheap and still locally produced. I think Brazil, with it Familia Bolsa* program is second only to China in the millions it has lifted into lower mid class from deep poverty in the last decade. * In president Lula's 8 years, now ending, 20% of the lower class has be come middle class, in large part because of "Bolsa Familia" a very significant wealth redistribution system which directly paid to the poor families who would keep the kids in school until 18 (normally those kids went to work in the fields with their father after a few years of schooling.) Bolsa Familia basically pays for itself in increased economic activity via the "multiplier effect" as these previously cashless people spend in stores now. Its long term economic benefits will be enormous as the now educated kids get factory jobs etc and pay taxes - much more economically beneficial than even the US's GI bill of right as those GI already did have some education. From: http://www.sciforums.com/showthread...ed-(or-not-)&p=2627437&viewfull=1#post2627437 (My post from about two years ago but program is at least 12 years old now and has grown bigger as its great success was understood better.)
Joe could save it if he suddenly decided that markups must be a libertarian conspiracy. Please Register or Log in to view the hidden image! Now that I think of it...it does speak to the problems inherent in the economic liberty to advertise a product. Advertising creates a scenario in which consumers can spend more than 50% of the purchase price toward whatever it cost to persuade them to buy it.:bugeye: Most people would find this vaguely criminal if exposed...its possibly capitalism's greatest flaw.
Wheat that was grown before it was genetically modified gave 10 boxes per acre but the new modified wheat gives 100 boxes per acre but costs us 100 percent more than before it was modified. Talk about a mark up.
Would you like the exact yield amounts before and after the genetic enhancement? For example, in 1999 Scientists in Thailand claimed they discovered transgenic wheat in a grain shipment from the Pacific Northwest of the United States, even though transgenic wheat had never been approved for sale and was only ever grown in test plots. No one could explain how the transgenic wheat got into the food supply.
What i asked for was a clarification of the markup comment. From your previous post, i make it 10x yield @ 2x price, which would be a 200% increase in profit, if the cost of production, processing and transport per box were constant, but it's only a 100% markup.
Generic prescription drugs must surely be in the running with markups of up to 3000% and more according to some sources. http://www.snopes.com/medical/drugs/generic.asp
I'd be interested in knowing what raw materials cost as a percentage of the total production cost of a wristwatch. For example, this chinese made watch is price tagged at $17.00. http://forums.watchuseek.com/attach...er-watch-under-20$-usd-winner-loser-watch.jpg It claims to have a stainless steel case, but chemical testing has revealed an alloy of copper and zinc plated with chromium. This is what used to be called 'pot metal'. This means lower temperatures are required to cast and stamp out the parts, but I doubt the raw material per watch is anymore than a dollar cheaper. This is where government has a role to play in establishing manufacturing regulations, and I suspect this happened in Switzerland, resulting in a long standing reputation for quality.
