HOUSTON—We all know that companies mark up their products before they go to market. The price they charge is higher than what it cost them to produce the item. That’s how they make a profit, of course.
But there are some products that have such high mark-ups, consumers may want to consider cutting back on buying them or stop altogether.
According to the consumer website Walletpop.com, bottled water has one of the highest mark-ups on the market. In general, it’s about 4,000 percent.
Save your money by drinking from fountains or bringing your own water from home in a reusable bottle or thermos.
According to the website, the scariest thing you’ll see at the movies is the price of the popcorn. It’s marked up 1,300 percent.
"I remember back in what,1979, for $5 you could go to the movie with your girlfriend, get a bag of popcorn and play a video game," said consumer Chris Clark. "Now, it’s over $5 for a bag of popcorn? I want to slap somebody who came up with that idea. I’m serious. That’s crazy."
"You don’t have to buy it, but then you don’t have to go to the movies either," said Betsy Gelb, Ph.D. director of Marketing and Entrepreneurship in the Bauer College of Business at the University of Houston.
She also pointed out that businesses carry more than just the cost of the materials needed to make a product.
"There are what we call fixed costs to being in any retail business," said Gelb.
The cost of bringing an item to market typically includes fixed costs like building rent, utilities, machinery, insurance and salaries, said Gelb.
Gelb said she also steers clear of anything in a hotel mini bar.
"Because I feel taken," she said.
There is nothing in the mini bar that cannot be purchased elsewhere at a much cheaper price than the hotel’s price, which—in general—carries a 400 percent mark-up.
"It’s convenience that you’re paying for and, of course, the director of food and beverages’ salary," said consumer and Houston fashion designer Shawn Kingsley.
The mark-up on coffee-shop coffee is about 300 percent.
And last on the list of marked -up items is produce. Fruits and veggies that are pre-cut are marked up a modest 40 percent.
"The highest and best use of cut up vegetables is to entice kids...to eat vegetables," said Gelb. "Well, that’s a benefit."
The bottom line is, convenience will usually cost you. So if you just have to have popcorn at the movies, maybe you could cut back on the coffee.
"Nobody has to buy anything. That’s the whole point," Gelb said.
