Are you buying any of these high markup products?
20 Products with Giant Markups
by Renee Morad, courtesy of MoneyTalksNews.com
If you're a merchant seeking profits, there's only one way to find them: sell stuff for more than you pay for it.
But what's a fair markup? Fifty percent? One Hundred? Two? It depends on both product and business, but some consumer goods are being sold for a whole lot more than they cost.
Whether you're sipping a martini in a swanky bar or bottled water from the grocery store, odds are you're swallowing an astronomical markup. Money Talks News founder Stacy Johnson reveals some of the most overpriced products and shares tips on how to get them for less. Check it out, then read on for more.
Here, in no particular order, is a larger list of products with high markups, along with ways to avoid paying a premium.
Movie theater popcorn/candy
What's harder to digest: (1) Movie theater popcorn has an average markup of 1,275 percent, or (2) With a soda, that popcorn has a caloric equivalent of three McDonald's Quarter Pounders? Nutrition aside, concessions like $5 tubs of popcorn and $6 boxes of gummy worms are big revenue streams for movie theaters.
Since most theaters prohibit moviegoers from bringing in outside food and drinks, the way to save is to bypass concessions altogether. If you can't, find your cinematic savings elsewhere, like getting a five-pack of movie tickets for $30 at CinemaDeals.com.
Astronomical prescription drug prices with markups ranging from 200 to 3,000 percent are enough to give patients a headache. In fact, price hikes caught the eye of Arizona's Attorney General Tom Horne, who is suing pharmaceuticals distributor McKesson Corp. for markups on Allegra, Celebrex, Coumadin, Flonase, Lipitor, and Valium.
To save on prescriptions, ask your doctor for free samples and about generic substitutes. Comparison-shopping is also a great idea. Walmart, Target, and warehouse stores like Costco are good places to start. And take advantage of mail-order suppliers like Express Scripts if your prescription-drug plan offers it. Check out 10 Tips to Safely Save on Prescriptions.
Shoppers in the market for a diamond should be prepared to pay anywhere from 50 percent to 200 percent more than the wholesale cost, according to TheStreet.com. Information at this Google Answers page suggests markups range from 50 to 400 percent.
A diamond's sparkle may cause shoppers to turn a blind eye to the price tag, but you can land a better deal by understanding what you're buying and doing a lot of shopping. Read our Guide to Buying Diamonds in 5 Simple Steps.
Some claim bottled water's markup reaches 4,000 percent, which is more expensive than gasoline. Saving is simple; drink tap water. If you're concerned about taste or quality, use a water filtration system.
Some salad bar items are marked up more than 350 percent, according to Food Network Magazine. Items that aren't worth their weight like chickpeas (386 percent markup over retail), radishes (302 percent), and baby corn (277 percent). To save, load up on the lighter items that cost less than you'd pay at the grocery store like bacon bits (55 percent markdown) and grilled chicken (44 percent).
Dishing out $450 for Armani frames? Markups for eyeglass frames can reach 1,000 percent. That's certainly not unheard of. Fortunately, focusing on warehouse stores and the Internet can help you find discounts. Check out 8 Ways to Save on Eyeglasses for more ways to save up to 90 percent.
Order a glass of Coke when you're dining out, and you could pay 300 to 600 percent over cost. Sure, you know going into a restaurant that you're paying for the service and ambiance too. But if you're looking to save without sacrificing a night out, skip the extras like soda and opt for water instead.
Outgoing text messages on a cell phone can cost the provider three-tenths of a cent, but users up to 20 cents, which translates to a 6,000 percent markup. Some plans charge 10,000 times more for sending a text than other types of data. If you frequently send text messages, get an unlimited plan.
It's not uncommon for restaurants to charge two or even three times retail for a bottle of wine. Order by the glass, and you're sipping on an item marked up as much as 400 percent. So, scan the menu for a reasonably priced bottle (tip: look for house wines).
Whether you're reaching for a Snickers or a toothpaste kit, minibar markups can hit 400 percent. Some of the most ludicrous minibar prices, according to Oyster.com, include $14 gummy bears at Omni Berkshire Place and a $10 bottle of water at the Mansfield Hotel. A simple solution is to leave your room.
Coffee and tea
Lattes are one of life's little luxuries, but they can be marked up by 300 percent. If you're looking to save, start by turning on your coffeemaker and bypassing the coffee shop.
Some of the world's most expensive handbags include a $3.8 million purse made by The House of Mouawad in Dubai that's adorned with more than 4,000 colorless diamonds and a $1.9 million Hermes Birkin bag.
Women own an average of 10 handbags and spend an average of $148 on a handbag "splurge," according to a ShopSmart poll. Keep more cash in your purse by comparison-shopping online and in outlet stores. For more tips, read our story on Finding Designer Accessories at Deep Discounts.
A $665 price tag on Gucci jeans and $225 for Sevens proves some shoppers are willing to go to great lengths for fashion. But these designer items are grossly overpriced. According to The Wall Street Journal, it costs about $50 to make True Religion's best-selling jeans, Super T Jeans, but the wholesale price reaches $152 and the average retail price is inflated to $335.
For items that can easily be baked at home, you could be paying a 100 percent markup. Granted, convenience is a factor, and maybe a baker is a better cook than you are. If so, a good cookbook could offer a decent return on investment.
Greeting cards are simple pieces of paper with a 200 percent markup. And that's before factoring in so-called "Hallmark holidays." On a budget? Make your own cards, or better yet, if you have school-aged children, have them design one. This will likely amount to a more sentimental gesture and will leave a lasting impression.
Most college students will shell out about $655 for required textbooks this year, according to the National Association of College Stores. It's no secret that most of these books come with monster markups. Read 11 Ways to Save Big on College Textbooks for cost-cutting tips, from asking professors about coursework in advance to textbook rentals.
An orchid can cost up to $25 per stem. Add Valentine's Day or a wedding into the mix, and prices can surge. While disregarding flower purchases altogether isn't always an option, shopping around for the best price is. Check out online retailers, and buy in season to help cut costs.
Produce is often marked up as much as 75 percent. Buying in season is the best way to find a bargain. As we explain in our Seasonal Savings post, look for deals on grapefruits and oranges in January, asparagus in March, and melons in May. Also steer clear of pre-cut veggies and fruit, which often have an additional markup of about 40 percent.
Furniture and mattresses
Furniture stores usually make a hefty margin with markups of about 80 percent. Try to shop during sales, but if your timing is off, don't be afraid to negotiate a better price. Also take note of the product number and then search online to see if any other retailers offer a lower price.
The average markup on cosmetics is 78 percent. Since most cosmetics are made from various combinations of dirt, oil, wax, and fragrance, it's surprising that shoppers pay such a premium. But thanks to anti-aging claims and celebrity-endorsed marketing, shoppers have been breaking the bank to look younger and more beautiful for years. Fortunately, there are some simple ways to get more bang for your buck when purchasing beauty products (hint: skip the drugstores and load up on free samples).
Like this article courtesy of MoneyTalksNews.com? Sign up for their email updates and they'll send you a regular digest of their newest stories, full of money-saving tips and advice, free! They'll also email you a PDF of Stacy Johnson's "205 Ways to Save Money" as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait?
Take the Next Step:
- For some great shopping strategies, please visit here.
Share your thoughts about this article with the editor: Click Here
Also in Money
- 6 ways to pay off credit card debt
- 10 sure-fire savings tips for 2014
- 10 sweet, often-overlooked tax breaks
- Make sure your children are a tax credit to you
- Fund an IRA early to grow a bigger account
- 4 ways credit unions help raise credit scores