Airlines.
Has anybody ever bought a mattress/box springs that wasn’t 50% off the “regular” price?
Monster Cable pisses me off to an extreme degree.
“Good-Bye!” is the only proper response.
Starbucks. I’m sure it makes them money, but I still don’t entirely understand why some of their cold drinks cost 5 dollars. It is nice, but if I carried around a blender I could do a pretty good imitation of most of their cold drinks for about 25 cents. Add another 25 for the bulk packaged materials, and another 50 for storage.
Of course, they are ridiculously overstaffed at my local shop, often with 6 or more people for a 1-2 man job.
I think the primary cost component of places like Starbucks would be real estate- that is the rent on the location.
And there’s your answer. iTunes charges $.99 per song because that’s what people are willing to pay. Prices are not set only by the costs of production; the demand side of the equation has a large effect as well.
Preach it.
The worst pricing weirdness in fashion, however, goes to designer handbags. I can buy a really cute purse at Target for $20 or less. A Target purse holds my stuff, I’ve never had one break or fall apart even after a couple of years of use, and hey, in a year or so when the style changes, if I really want, I can go to Target and get a new, stylish, current purse for another $20. Even at a store where I buy my work clothing, I could get a nice purse for under $40, I’m sure.
However, someone somewhere decided that handbags are an item that women could be persuaded to spend hundreds of dollars on. They’re a freaking accessory, not even essential, really, and you really only need one at any given moment, but that’s not “correct.” You should have several, each in the current year’s style, and always wear one that matches your outfit and mood. And a few hundred dollars per bag is reasonable for most of us, but wealthy women can afford bags that cost several thousand each.
It’s so ridiculous that, here in New York, on any given day, people are making tons of money selling imitation bags–bags that, because someone in a sweatshop somewhere came up with a good approximation of a Louis Vuitton or Prada logo, are costing more than my cute little Target bag. Now, wait just a minute. The designer bags (real or fake) aren’t really any better looking than my bag, and they don’t do anything that my bag doesn’t do, and–get real, now people–they’re not convincing anyone that you’re wealthy, because a twenty-eight-year-old secretary riding the subway in from Brooklyn can’t afford a real Prada purse.
But the imitation designer bag–the knockoff, carefully crafted to fool people–costs more than my Target bag. Unthinkable.
OK, so I guess that’s not really fitting with the OP, but I had to get it out. It’s the whole industry of pricing handbags, not any particular business. Sorry…
Hell, yeah!
I’m suprised Liberal’s response hasn’t gotten any comments.
Not only is airline pricing crazy, but apparently it’s almost impossible to find the lowest price for any particular flight.
I’m blown away that nobody said that until post 21. I thought that was what the thread was going to be about in three posts or so.
Mattress stores. How is it you can walk into any given mattress store and see their entire inventory on sale? How can a store give you 50% any given day without going out of business? I know, I know, it is due to their incredible markups. However, if they are really always willing to give you these “incredible” deals, why have the markups in the first place?
Furniture stores. Not all furniture stores work like this, but some do (Sears for example). They have prices lists for their stock. They will even guarantee their prices for an item purchased. So, say you bought a bed in September for $1000. In October you walk back through the store and see the same bed for $800, they’ll refund the difference. Now, the salespeople know the prices change monthly and they know what the prices will be month to month, but they cannot just give you October’s prices if it is still September. (This happened to my sister. We stood there, looking at the salesgirl telling us that the very next day it would be $200 cheaper but to receive that price we’d have to come back the next day.)
Sports stores that are always on “Sale”.
Electronic stores always on “Sale”.
Just about any given store that regularly has “Sales” as part of their regular marketing. Drop the fucking insane marketups and just charge people fairly. I still cannot believe some people will pay $2500 for a mattress.
Here’s a good one. I was flying to Dayton, OH from Santa Barbara through Los Angeles and Chicago. I was meeting a colleague in L.A. who was going to take the same exact flights as me from L.A. on. I paid $300 less than him. Yep, it cost me less to tack on the extra leg.
Five months later we had to go back to the same place again and the pricing was exactly the same.
Cosmetics. Especially the really high prices ones. You think paying $500 for a Gucci handbag is insane? Try $500 for a two-ounce container of some exotic facial cream! And what’s worse, the stuff is virtually identical to the $20 variety. In fact, a lot of it comes from the same batch of material, and they’ll just add some random inert glurge to the high end stuff and call it the special ingredient to justify the ludicrous price.
To make matters even worse, most of it doesn’t actually do anything. All those wrinkle creams and fade creams do absolutely nothing to prevent aging. It’s pure snake oil.
And I second the hatred for Monster Cable. I was in an electronics store the other day looking for an HDMI cable, and they had a 12’ monster cable ‘platinum’ HDMI cable for $300. A generic cable of good construction should cost $30 tops. And they will sound identical. Not just close, but identical. It’s a digital signal. If the bits get to the other side and can be decoded, it makes zero difference how they got there. Yet every electronics store has shelves full of this overpriced crap, and they push it like crazy. Why? Because they’re in on the scam. Monster has huge dealer markup, and they offer SPIFFS and all kinds of other incentives to get stores to sell their garbage. That $300 HDMI cable is almost guaranteed to make a store more profit than the $3000 stereo they sold along with it.
A while back I needed a new video cable for a PS2. EB Games tried to sell me a Monster cable for $69! Yes, a $69 cable to plug in a $100 game console that has mediocre video quality to begin with. Anyone who buys such a thing is insane.
There’s a name for all these kinds of products - they’re called “Vebleneque goods”, after economist Thorstein Veblen - the guy who created the term “conspicuous consumption”. Veblenesque goods turn the demand curve upside down - they are in higher demand *because of their high prices. People who lust after a $1000 handbag wouldn’t give a second look to a handbag of identical quality that sold for $20. The whole point to buying it is to flaunt your wealth, to give you that feeling that you have something very special that almost no one else has. That’s why Monster cables are so gaudy, with brightly colored sheathing and cool-looking high tech connectors - you’re supposed to see those cables. People who buy them make sure people know they have Monster cables when asked. A lot of audiophiles will even build their equipment racks with an open back so you can see their fine, fine wiring.
Standard songwriters royalties are close to .10 per track. That’s more than $1 per album right there. Then there’s the fee to the band, fees to the recording studio, touring costs, marketing costs, etc.
Also, there’s the loss of CD sales when people choose to be online. The per-track fees have to be close enough that they don’t totally destroy their own CD sales by putting the songs online.
Also, when you buy a la carte, the studio loses the profit from the ‘filler’. For example, a lot of people will buy the new Madonna album simply because they like her current hit on the radio. So that’s a $15 sale for essentially one song. Give consumers the option of buying just the hit, and the other songs go unsold.
Apple has sold a billion songs on iTunes at 99 cents. Clearly it’s a price a lot of people are willing to pay.
That said, the pricing model for online music is still evolving. I think ultimately you’ll see a model where back-catalog stuff can be had for less expense, hit songs will be a little more expensive, and there will be all kinds of package deals, bulk song pricing, etc. There are companies that are trying monthly fees for X number of downloads, others that are working with retailers to make money through selling song coupons in products, etc. The market is very immature, so no one is really sure yet what the ‘right’ pricing model really looks like.
No, the reason a CD is “$15 or so” (I ususally find them cheaper unless I have to get the initial release) is that the music publishing industry makes a fortune as the middleman/distributor/promoter for intellectual property that costs almost nothing to produce. (Most artists don’t come out to well on their end, either.) The entire process of pressing, packaging, and distributing CDs probably costs somewhere between $2-$3. (And yes, I’ve worked in the design and manufacturing of plastic consumer products, so I have a clue as to what I’m talking about.)
This is at least one area where defegulation led to total chaos. Ostensibly the airline price schedules reflect opportunity cost, i.e. the later you wait the more you pay. The reality is that it’s hard to see where their profits come from and how their prices relate to reality.
Stranger
I was trying very hard to remember when I’d posted to this thread. Turns out, I didn’t.
You don’t shop like my grandmother, I see.
Quik-chops for EVRYONE! Merry Christmas, kids.
Bwah? How’d that happen?
Oh.
Uh…Q.E.D - time for a pee test. You’ve skipped a period.
Apparently someone trying on my knitted footwear. Looks like it didn’t fit. 