What common item is most overpriced?

In My Humble Opinion
61

Eyeglasses. Ridiculously expensive. Last year I had surgery to fix both my eyes, so I no longer have to buy them. No longer have to be held to that extortion, and not having to buy them anymore means the surgery will have paid for itself in less than 10 years.

Movie popcorn was mentioned above. I don’t mind the high concession-stand prices, because I know that’s how theaters make their money. My understanding is if they don’t lose money by bidding months ahead of time on a flop they had no idea at the time would be a flop, most if not all of the ticket take goes to the studios.

62

Disposable alkaline batteries. I don’t use them for much anymore, mostly things like remote controls and smoke & CO detectors at home and some stuff at work. But a two pack of Duracell 9 volts is like $10 at Home Depot and $15 at Walgreens.

63

I use both rechargeable and standard batteries in some quantities. I buy the 24 or larger packs of AAs and AAAs from Amazon, as well as a smaller number of 9-volts and C cells. Quality is as good as I get at most stores and very reasonable prices.

When I was a kid, it was an Act of Congress to get batteries. My parents didn’t care. Fall asleep listening to your GE transistor radio and run down the 9-volt? Tough luck. Ask for some for your birthday. (This was around the time I got a 50 cents/week allowance.) Now that I’m older, I refuse to be in a house that doesn’t have at least a dozen of every battery available at all times, including CR2032s and different button cells. And I have a 12-position charger for NiMH AAs and AAAs on an electronic timer that turns on for an hour each day to make sure they’re always topped off.

64

That was the most unrealistic thing about Stranger Things. How did the dad not have a fit with the kids going through all of the batteries necessary to keep those flash lights and radios running? I though for sure Max’s Walkman running out of batteries would be a plot point, because it certainly was to me at that age in the 80s.

To stay in topic, how about baggage prices on Frontier, and some other airlines. $55 for a checked bag, each way. Carry-on is even more. Total cost still ends up being cheaper than the other options, but is getting close to just hitting the outlet mall on the from the airport to where I’m staying.

65

‘Common’ items are almost never overpriced in the sense that someone somewhere is making outrageous profits from high prices.

Things that are overpriced tend to be thinly sourced, have small markets, OR have some kind of monopoly pricing power.

I built a device a while back that I was thinking of having manufactured. It had about $10 in parts in it. But manufacturing means setting up tooling, buying parts in bulk which costs up-front money, making instructions and packaging, storing inventory, hiring all kinds of people along the way for various things.

A company in China offered to make the thing for around $30/copy. For that, they did everything including the packaging. But the minimum quantity they would make was around 500 for that price, so I’d have to cough up $15,000 and then figure out how to sell them all. And if demand skyrocketed and I had to make 5,000, there would be big delays and the per-copy price would be too high. So big risk.

Another company offered the full deal - make the product, sell it to an Amazon reseller who would put in the marketplace, etc. I would get roughly $10 for each product, which they would sell to the reseller for $70. I was basically selling my idea only for royalties.

The reseller who buys the items for $70 will then put them in the Amazon marketplace for maybe $120 or so. But they have to handle all the transactions, eat the refunds, put up the money for inventory, swallow the inventory if it turns out there is no demand, pay Amazon its cut, etc.

Nobody in the mix was likely getting more than $10 profit on each sale, but it still resulted in a $10 item (parts only) selling for $120. I didn’t see anything unreasonable about the pricing at any step of the process.

Drugs are expensive for a simple reason: it can take a decade or longer and a billion dollars to get a drug through the FDA trial process and certified for market. And for every successful drug there are other on which hundreds of millions are spent and never recovered because the drug trial failed.

So the drug company has to recoup not just the R&D for the successful drug, but make back the money on the failed ones. To do that, they have a 17 year patent window, after which generics flood the market and crash the price. So if you think you’ll sell a million pills in that 17 years (say, a pill for a rare condition), you might have to sell them for $1,000 each just to break even, even though the marginal cost of manufacturing may only be $1/pill. If you can’t sell them for that much, you simply won’t do the research in the first olace.

If you want to lower the cost of drugs, there are two ways: Lower the cost of development by easing regulations, or increase the patent protection lifetime. The drug companies are not getting rich. Their profits are higher than most industries
at times, but not by that much and that higher profit is because of the incredible risks they run investing billions in products which may never get to market. Risk carries a price, because if it didn’t no one would take risks.

66

Isn’t that just because they are a budget airline that has lower cost tickets but then charges extra for everything that comes standard on other airlines? Every regular airline I’ve ever flown with has $0 carry on.

67

Depends - with Jet Blue , a Blue Basic fare only includes a personal item ( purse, small backpack, briefcase, laptop). The more expensive tickets include a carry-on. And if you show up at he gate with a Blue Basic ticket and a carry-on, they will charge you $65 to gate check the carry-on, while it would have only been $35 if you had checked it before going through security. I’m guessing Jet Blue is not the only airline that does this.

68

I flew Frontier a few times in the last year. On two occasions, the “full” extras package (which includes choosing your seat, a carry-on, and a checked bag) was more than the airfare itself by double digits.

69

Mine were thirsty incandescent flashlights and those AM band walkie-talkies with no squelch and used 9 volt batts with barely any capacity to begin with. The Battery Club at Radio Shack was a good deal, a free one every month.

70

How’d you get by with one a month? Seriously, I would fall asleep listening to the Top Nine Tonight out of Richmond, VA, on my earplug and wake up to a dead battery two or three times a week. Tried to recharge those carbon-zinc batteries with a cheap “charger” my father had…ran for ten or fifteen minutes.

71

This is how things are explained in Econ101, i.e. supply and demand. At the next level of study, we find out that it is simply not true. Any entity selling anything will charge what the market is willing to pay. There’s no shortage of cellulose acetate which can explain why Gucci charges $700 for frames, likely made in China for ten bucks. And there’s certainly neither a shortage of customers willing to pay that price. Obviously, those customers don’t think of them as overpriced, since they are willing to fork up that amount. I do think that most people would consider paying $700 just for frames (and lenses then adding a lot to the final cost) as overpriced.
“Thinly sourced, small markets, OR have some kind of monopoly pricing power” are not factors for the price of the Gucci frames, though.

So why is the same insulin, made by the same company ten times as expensive in the U.S. as compared to EU or (I think you live in) Canada? And don’'t tell me that they depend on recouping their investment globally, by letting Americans - in effect - subsidizing users in France, Germany and Australia.

Drugs new to the market are expensive here in the EU too, and the single payer systems protect the individual users from the full cost. But my understanding for the prices in the U.S. has to do with pharma companies spending a LOT of money on advertising for prescription drugs (not allowed in the EU) and being able to shift costs - real or inflated - to insurance companies.

Your reasoning behind R&D costs for Big Pharma and the short time span they have to make that money back is true of course (though I thought it was the standard 20 year patent). But somehow the European Big Pharma companies manage that without charging what the companies do in the U.S. So yes, at least for Americans, lifesaving/supporting drugs are outrageously overpriced no matter if the price is paid by the individual or their insurance company.

Aside: Some Americans oppose a single payer system (“socialist medicine”) with Why should my taxes go to…? while not realizing that, as with any private insurance, they help carry the costs for others through their premiums. TANSTAAFL. But I guess a tax by any other name - ‘Private Insurance’ - makes them feel better when spending twice as much for the same stuff.

72

It’s going to the executives and shareholders of insurance companies, PBMs and pharmaceutical companies, all of whom walk with God. Far better that 3X as much go to them than the Socialist Spawn of Satan get their hands on it.

73

Actually, this isn’t even true to the extent you think. Often a lot of this cost is subsidized through federal grants to universities, etc, which make the breakthroughs. Your points about it costing less in other countries puts the lie to the notion that it’s all the research and certification requirements that are expensive. I mean, yes, they are expensive but nowhere near enough to justify the costs.

74

That’s the model now, but in the past you still got a carry-on and checked bag like any other airline. They paid their employees less, and had more limited routes than the majors, but the ticket was inclusive.

Now United charges $30 for a checked bag on the same route. Southwest, the original discount airline (as far as I care), is one of the few that sells an inclusive [ETA] base ticket.

I actually don’t mind unbundling of fees, but only if that is really what is happening.

If (ignore inflation and the wild fluctuation in ticket prices) in 2013 a flight cost $250 for everything, and in 2023 it costs $225, but checked bags are $30 extra, carry-on is $40 extra, etc. then they’ve raised the price for most passengers.

Except as a recent study showed, there is no association between the cost to develop a drug and the price charged for the drug. Like other things, the price charged is what the market will bear. Too bad if some people can’t afford them, the drug companies at least think the math works out in their favor.

To me, the meaning of “overpriced” is when something is a higher price than the market will bear. Often it is a market of one. I’m not willing to pay $5 for an in-flight soft drink, therefore it is overpriced to me. Other times I think it may be the seller is just out of line with demand, and lowering the price might result in making more money. Sometimes the cost to produce an item is higher than what the market is willing to pay for it. In that case something can be overpriced (by my definition), but still selling for less than it’s “worth”.

75

I’m just talking about regular Economy tickets. Not the budget low-tier “basic” seats that you then have to pay for everything. Regular old Economy on United, Jet Blue, Delta, etc. does not charge for carry on unless you are trying to take several suitcases.

76

I read someplace that the original reason Southwest didn’t charge for checked bags was because their computer systems weren’t set up for that. Things may have changed since then, but I think now they use it as a marketing gimmick.

77

Could be. I can do math though. When the same route is $600 total for the family on Frontier, including luggage; but $800 on Southwest, we’re flying Frontier. If I’d wanted all of the things like full size carry-ons, and picking my seats, Southwest would have been cheaper. It was something like $900 on United before bags, so no point in finding the total.

Those are the three non-stop carriers for my destinations.

Shipping the checked bag (USPS, etc) would have been about $100 each way.

78

Deep discount airlines have always charged for what they could. Main airlines used to offer things like carry-on plus two checked bags “free” with every ticket. Then many started charging for the second checked bag for non-premium tickets. Now many charge for things once considered included.

It’s a tough industry. It was before Covid. I don’t find these things surprising.

79

Sure it is. The number of people willing to pay $700 for any sort of glasses is probably fairly small, and is predominantly people who want specific fashions/brands like Gucci. That’s a pretty small market right there, relative to the market composed of people who aren’t willing to pay so much for frames.

They’re not even necessarily overprised within that market. That’s the catch that people seem to be glossing over. It’s not looking at $700 frames and saying they’re overpriced vs. some cheap junk from Zenni or Warby Parker, it’s looking at them relative to their peers - Cartier, Louis Vuitton, Jacques Marie Mage, Chanel, etc…

Another example is that nobody would compare a steak from Golden Corral to one from a high end steakhouse like Capitol Grille and conclude that the Capitol Grille one is overpriced - despite both being beef (we assume), they’re not remotely comparable otherwise.

@echoreply has the best definition yet- overpriced being when something is priced higher than the market will bear.

80

And many of those are all made by Luxottica

Luxottica also makes sunglasses and prescription frames for designer brands such as Chanel, Prada, Giorgio Armani, Burberry, Versace, Dolce and Gabbana, Michael Kors, Coach, Miu Miu and Tory Burch

which runs into the monopoly thing again.

Luxury and prestige brands are always a tricky thing. Every new car thread will always have a few participants who (in more words) think everybody should drive a used Honda Fit, because “it does all of what that car does but for 1/20th the price, and your just paying for a fancy badge.”