I was in a meeting today with a manufacturer from China who told me it costs $4 per unit to manufacture a certain bike helmet that retails here in the US for over $100.
Un friggin believeable.
Don’t forget that manufacturing is not the only cost of the product.
But from the sounds of it you better get you believer fixed 
Helmets are just a little foam and plastic after all. The markup is still huge no matter how much R&D, shipping, packaging, taxes, tariffs… etc. cost. What’s great is the less material there is the more they charge you!
here’s the real kicker.
They also manufacture a model that retails for $30.
Guess how much that costs to manufacture per unit?
No takers?
OK, the $30 helmet costs $4 to manufacture also.
What’s the raw material cost of:
A bike tyre? (Not a typo or misspelling)
A carbon fiber aerobar?
A power meter?
A carbon fiber aero wheel?
The computer you’re reading this on?
The last box of software you bought?
I agree w/you on the mark up… Though, as a rule of thumb, 70% of a product cost is built into the supply chain.
Usually the box, instuctions, and shipping cost more than what is in the box.
Pissed about the cost to make a lid? What do you think it “costs” to “make” Office 2007? Oh wait, there were a shit ton of folks getting paid high coin to create it. I suppose we need to pay them eh? Dont get me on the cost to “make a pill” - those evil drug companies.
There’s also significant cost in making the molds also. I’ve often wondered why the same issues isn’t raised on sunglasses. The material costs in $150 sunglasses isn’t much different than the $12 Foster Grants.
I’m going to support the “industry” for a change. At least a little bit.
What do think the cost of staying in a hotel room is? A few dollars per night, max? Clean sheets, towels, a few soap products, electricity, and water. About $20…right? So I profit about 12 times that for every room I sell? NOT!!!
Now…consider everything else that must be paid to keep that room open for your one night every year or two. New carpets each year, new sheets, new pillows, new matteras, new furntiure, , new TVs, insurance (in case you fall), signage required by the state, staff to clean your room, staff to man the front office to tell you where to go : ) interior/exterior maintenance, state/city taxes, chef to prepare your breakfast (in most places now), tons of advertising, Cable TV, Wireless internet, and on and on. The list is huge. My monthly cost, off the top of my head, for ONE room is nearly $5,000. I have to sell the room 20 times just to break even.
There are more costs then just producing a product to put on your head. That company that made that helmet has alot more expenses then just the $4 material in the helmet. Companies are there to “make” money. They can only charge what the consumer will cough up money wise for their product. Demand…is a great thing, trust me!!
OK…I’m done!! : )
You have a great point and for the most part, I agree.
But there’s a difference between gouging the consumers and trying to make a profit.
CDs that cost 10 cents to manufacture and sell for $25… I can sorta see. Maybe.
But when oil prices are at record highs, consumers are buckling down for a recession and airlines are shutting down- it sorta stings to see oil companies reporting billion dollar profits with tens of millions of that profit going to one man.
I’ll agree with the oil company complaint. They’ve crossed WAY over the line. The demand is and will always be super high and they can sell oil at ANY price they want. I can’t see any difference between annual profits of 10 billion compared with 5 billion. Its more money then anyone could ever spend in a life time. They’ve gotten to the point of sheer greed.
If you want to see greed, just watch “Deal or No Deal”. I’ve never seen so many people turn down a check of $100,000 in my entire life. People are greedy. “No deal…$100,000 is not enough free money for me, I want more”. Can you say “stupid”!!!