Klarinet Archive - Posting 001187.txt from 2000/02

From: "Jay D. Webler" <webler@-----.net>
Subj: RE: [kl] Ligatures $$$: why is life so expensive?
Date: Tue, 29 Feb 2000 18:28:37 -0500

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Please indulge me while I tell a manufacturing story from the past. I =
once worked for a company that manufactured an instrument used for =
Cataract Surgery. This Instrument cost $8,000 to manufacture and was =
sold to the Doctor's and Hospitals for $22,500. The competitors where =
charging $60,000 for the same machine. The doctors would ask us, "Why =
so cheap?". Because the device was priced so far below the competitor =
the Doctors assumed that it was inferior equipment. Therefore the price =
was raised to $45,000 dollars and sails increased.=20
The point is this, although there are many considerations into the =
actual manufacturing cost, we as the consumer are ignorant of those =
costs and may well be driving up the price of items because we think =
that more expensive is better.

Jay Webler
Jay's Clarinet and Percussion

PS. And you wonder why medical costs are so high. =20

-----Original Message-----
From: GrabnerWG@-----.com]
Subject: Re: [kl] Ligatures $$$: why is life so expensive?

The list goes on and on. All of the line items listed above are part of =

the "cost" of a part, not just the fact that it had 35 cents of steel =
bar=20
stock. After these cost are paid, then we can talk about setting a =
profit=20
so the business can thrive and survive into the future. Some times the=20
markup is 3/4/5 or many more times the cost of the raw materials. Is=20
that wrong? Go back and start adding up 1 through 7 again...>>

Gil....

You forgot the portion of the price added on by the retailer, often up =
to 40% of the total. (They have overhead to, invest a lot of bucks, and =
have to profit or close up and go find a job).

I'd still rather pay a higher price, than buy shoddy merchandise.=20

Walter

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