The product with the highest markup

Shopping at Zales for a Christmas present yesterday, I began to wonder about how much it actually cost for these shiny little rocks to get processed into earrings, rings, etc.

But then I thought about how much profit is made at concession stands… mainly Cotton Candy! The margin on that must be in the thousands of percents! Surely soft drinks are up there too.

But not being sure, I turn to the Dope for the answer.

Depends on if you want to look at dollars, or just percentages. Luxury items have a higher percentage markup than comparable low- to mid-range items, so profit on a Ferrari is higher than on a Ford. The difference could be many thousands of dollars. But just for percent markup, I am looking at movie theater popcorn, selling at something like 100 times direct costs, and sodas are probably close behind. It is an open secret that theaters make more money from the snack sales than the movie tickets.

Truffles? You find them for free with the help of a dog or pig, but they sell for hundreds of dollars per ounce. In fact, I just checked prices. The white truffle is in a deep recession and it only selling for a mere $193 per ounce. The year before, it was over $200 per ounce.

Perfumes are up there.

Computer software. The cost of a DVD is about a dollar (less in bulk). Time and equipment to burn them probably doesn’t add more than another dollar, and maybe another dollar for packaging. Yet software sometimes sells at retail for hundreds of dollars.

Developing the software is expensive, of course, but the markup on the individual disks once the software is developed is very high.

But you can’t exclude the R&D costs here. The money spent on product development is in fact included in the final product cost.

There ain’t a lot of R&D in popcorn, OTOH.
Bottled water’s gotta be up there.

Copier Toner. Hands down.

Homeopathic medications are probably up there.

Leaffan already mentioned bottled water. :smiley:

Saffron gotta be up there.

Saffron is expensive, but is the mark-up really that high? Gathering it is incredibly labor intensive.

Yeah, but you’ve got to consider the man-hours going into that harvest. I’m under the impression that truffle-hunters spend hours wandering before they usually find any, IF they find any.

I’ve heard a quotation from the guy who used to run a successful printing company 50 years ago that “Ink is made up of water plus profit.” Considering the markup on copier toner I’d say things haven’t changed much.

On a percentage basis, banks’ markups on their various fees and charges has to be pretty huge too. They get the customer to pay a dollar to use their card, when the transaction costs the bank a penny or two, plus the bank gets to fire a couple expensive tellers.

Monster cables?

My first thought was “texting”.

I remember reading an article about how much texting costs the company vs. how much you pay for it.

It was a huge markup.

Some works of art are made from very cheap materials . . . and look like the artist didn’t spend a nickel on art school.

payday loans has to be up there, too.

400% interest (markup), thank you very much

(it’s probably not a markup in the sense of the OPs question, so I’d also add that fountain soda (not so much canned pop) has a high markup too)

Percentage-wise, designer (or any) glasses frames. Costs maybe twenty buck to make, sells for hundreds.

Prescription drugs (in the U.S.).

Finding the item with the highest markup is going to be pretty hard, but here are some for your consideration:

Any item for a backyard pool - I used to need to replace the gears in my Shasta pool circulator, and they would charge $5.99 for a piece of molded plastic that could not have more that a nickel’s worth of plastic in it.

Appliance repair parts - I just bought a HV diode for my microwave. I figured that it would cost $6. It cost 29, and could not have cost more than .25 to make.

Automobile trim - another category with astronomical prices for simple molded parts.

An anecdote:
Years ago, I was eating at a Wendys with a friend, right about closing time. I was drinking an iced tea, and I mentioned to my friend that it just had to be the highest profit-margin item in the place; after all it’s just Tea leaves and hot water. The manager, who was cleaning up nearby, over heard and said “nope.” I asked him what was, and he said “The Frosties.”
He went on to explain how they buy the concentrate for a surprisingly small amount, and dilute it with water, and since they are relatively expense items, they have the highest profit margin of anything Wendys sells.

From back when I was growing up, operating a family western wear & tack shop, I remember that markup was significantly higher on goods that had a higher chance of having some left unsold.

So clothing, which would go out of style, had a higher markup than regular horse tack. Because at the end of the season, you could be left with unsold out-of-style clothes (and nearly unsalable, except on huge markdowns). But regular blue jeans never went out of style, so markup on them was lower.

There was also a higher markup on fly spray, etc., because here in Minnesota, any that you hadn’t sold by Fall then didn’t sell again until next Spring – it sat on the shelf tying up your inventory money. But wormer medications were slightly lower markup, because they sold year-round.

The concept of ‘turnover’ was very relevant in setting the markup on items.

Also, note that high-markup items subsidize the cost of loss leaders. Movie theatre popcorn pays for the building, the insurance, the staff, etc. I think the ticket prices only cover the cost of the film itself.