KlondikeGeoff,
why aren’t there businesses selling glasses frames for closer to their cost of manufacture? What is the mechanism for keeping an overly high price on them?
If we’re going to include services in this, I don’t see how prostitution isn’t near the top of the list. It uses something the provider already has and would use anyway.
I would agree with this. Yes, art costs time and the materials to create it cost money. But the art can end up going for tens or hundreds of thousands of dollars. The artist’s time gets marked up considerably.
I don’t believe that texting costs the company anything, since it is done using spare capacity, and the bandwidth required for a text message is absolutely microscopic when compared to voice or data. I suspect 99.9% of the cost of text messaging is in the billing.
You have to include the cost of the helpdesk people keeping you on hold also.
When you take software overseas, you declare the cost of the media it is on, not the cost of the software. When I went to Japan to do demos and sales calls, I declared our $100K software at $10 or so, the cost of the tape. (It was a long time ago.)
There are plenty. You just have to go to the cheap-ass rack that your optometrist hides in the corner. The frames there aren’t very stylish – I’d describe most as pretty neutral looking, but there’s also standard-issue birth control glasses if you want. They’re functional enough and can be reasonably durable, and the price usually is around $30 IME.
People are willing to pay lots of money for fashion. Especially when lots of people are self-conscious about wearing glasses.
What I was going to say: depending on the medium, it’s the cost of materials and the time put into the creation. Works by accomplished minimalist or modernist painters (Rothko, etc) sold for tens of thousands of dollars as soon as they left the studio.
Behind that, I’d say audiophile gimmicks (cables, “tweaks” like Shakti Stones, Brilliant Pebbles and Machina Dynamica electrical outlet covers).
In Australia, ink and toner typically sells somewhere at 20%-30% margin at the retailer, plus whatever the distributor added on top (cite: worked in IT sales for 3 years). So not a huge gold mine, I’m sure there are products out there with much higher margins. Ink is typically expensive because the ink cartriges on alot of small photo inkjet printers have the printhead on the cartridge itself. Printers that have a seperate printhead are vastly cheaper to run, in some cases cheaper than a small laser printer.
I would reckon the designer frames previously mentioned would come up there. I paid something like $400 dollars for a pair of designer frames, which can’t have cost that much to make.
I’ve heard second hand that bikes (cycling, not motor) and accessories sell in Australia with 100%. Not sure if that’s realistic on the bikes but I could certainly believe that much on the accessories.
You’ve got it, you sell it, and you’ve still got it. It’s like a license to coin money. Hey, what about money? What does it cost to print a hundred dollar bill?
During his considerable younger days my son-in-law was manager of a movie theater. He says his most profitable item was popcorn. The bucket of popcorn that they sold for $1.75 had $0.03 worth of ingredients. Of course, this doesn’t include depreciation on the popcorn machine, but I think they last quite a while.
I undestand that the concession stands are about all that keep movie theaters in business.
I would assume it would be a product associated with scarcity, fame (same thing) or that was heavily based on proprietary information.
Some drugs cost hundreds a month but under $10 to manufacture. But there is the cost of developing that information, rather than just producing it.
I’d say artwork from famous artists.
Depends. Lets take the average simple men’s wedding band with a couple small cut diamonds in it. The two mines involved make a profit, as does the smelters/processors, the manufacturer, the store and the mall or building its in, and the salesman gets a cut in most cases. The band will probably cost you about $500 to $750. The marriage falls though and you bring it to where I work to sell. We’ll probably give you about $50 to $75 for it. We’ll pop out the diamonds, have the gold melted and when all is said and done our profit will be say $25 - meaning, in one sense, that the value of your purchase was like $75-$100. Don’t take it to a jeweler to sell unless the diamond is over 2k ----- we actually pay more than they do (from tests we have done locally - your results could vary).
Seems like a huge difference when you look at it that way but when you consider all the hands it has to pass through heading for Zales, you can understand where it comes from.
(Going by different things I have read and seen, the huge profits are soda and decorative items such as candles and wall hangings)
One thing to keep in mind is the difference between marginal cost and average cost. Marginal cost is what it costs to make the next unit, while average cost is (not surprisingly) the total cost of all units produced divided by the total number of units produced. These two figures are often very different.
For example (as someone mentioned), the marginal cost of the first unit of a new software program may cost millions, while the marginal cost of the second unit may be $1. The same holds true for any product with big upfront costs - whether research and development costs or physical plant (e.g., a factory) costs.
So, while the marginal cost to the bank or cell phone company may be minimal for an ATM transaction or text message, the average cost may be much higher given their capital investment in equipment and technology.
Don’t get me wrong - I’m not trying to defend banks or cell phone companies. I’m merely using them as examples as they were previously mentioned. 
A lot of the things in this thread aren’t really big markups; they’re big profit margins on a produced good. I would not consider charging multiple dollars for something you made with a few cents of raw materials to be a markup. That’s the cost of creating the product.
If you’re looking for something that a retailer or distributor buys, marks up, and then sells without changing, I submit fireworks. I worked for a company that imported fireworks directly from China, and retailed them in the weeks before July 4 in the US. People do not know how much to expect to pay for fireworks (since they only buy them once a year), and they do not really comparison shop, so competitive pressures don’t drive prices down. Markup percentages reached five figures in some cases.
We could import a pallet of roman candles at about a dollar per two hundred, and resell them at three dollars apiece. A big box of mortars would come from China at maybe a dollar, and would sell for $125. A long roll of consecutively fused firecrackers would cost us maybe twenty cents, but we could sell it for $99. I’ve never seen another product where a single middleman has such a huge markup.
All the comments on fashion are missing that Advertising and Marketing costs need to be worked out per unit sold to do a fair comparison. The reason that glasses sell for 100’s of dollars is the stylish models they’ve paid for, and the 100’s of millions they’ve spent establishing their brand as a household name, eg “Tommy Hilfiger” glass frames etc.
When total marketing costs are spread per unit sold the markup is probably pretty low on most fashion wear.
If we are talking retail markup, greeting cards are the highest markup items in your local grocery store/drugstore.
(Certain) Baseball cards and other “collectibles”.
Pussy.
Well ladies get 'em for free and us guys pay a fortune just to, well ya know 
AFAIK, texting is done purely in the “overhead” channels for cell phone connections. Depending on how you look at it, it costs nothing to almost nothing if you subtract the cost of providing just a phone service on “stand-by”. Wouldn’t be surprised if it had over a 100,000% markup in real cost.
Figure out the cost of water as sold for contact lenses, dry eyes, etc. Typically $5-10 for a half an ounce. Pretty damned expensive when you convert to gallons. Usually just sterilized water with a drop or two of some stabilization agent added.
Razor blades are insanely expensive and constantly obsoleted by new “technology”.