Some products in the market are overly priced, and there is little we can do about it. Some merchants sell their products with very high markups, which translates to increased profits.
Everyone in the selling business, whether selling a service or product, is in that business intending to make profits. Otherwise, they could not be having the stores in the first place.
As a buyer, you can consider comparing prices from different merchants before you decide to purchase. This criterion will help you not to land on overpriced items.
What is a Price Markup?
When I talk of price markup, I mean the difference between the total cost of a product or service and its final selling price. The cost of a product starts from its production cost and distribution cost.
The formulae for calculating markup is (selling price-cost price)/cost price multiplied by 100. For example, if the selling price is $25 and the cost price is $20, the markup will be (25-20)/20=0.25*100=25%. Therefore, the markup of that particular product will be 25%.
Now that you know the meaning of markup and how to calculate it, now let’s go straight to the products with the highest markups in the market.
1. Bottled water
Yes, you heard me right. Bottled water is among the products that have the highest markups. So you can imagine paying someone to package for you some drinking water. Bottled water markup will sometimes go up to 4000%.
You can carry your bottle of boiled water to work, and that way, you will be saving much on the cost of bottled water.
2. Cup of Coffee/tea
Passing by a coffee shop every day after work is a routine of many people. They usually sit with a group of friends or even colleges to talk some things out while having coffee. Have you ever did some simple maths of how much you could spend if you drank coffee for 20 days in a month?
Well, let’s assume a cup of coffee goes for $1. So if you drink one cup for those 20 days, you will only spend $20 for coffee, which is a bad idea. So if you could buy the raw coffee and brew it in your home, you could save some amount of cash.
These coffee shops usually exaggerated the selling price of coffee and tea, given that the total cost of brewing coffee may not go past half of the selling price.
You can avoid coffee and tea from coffee shops by brewing them in your house. In turn, it will also save you time wasted in the shops.
I would say that perfumes are somehow luxury products. It’s not everybody out there. You can find them having perfumes. Retailers know that perfumes are luxury, and the customers are from the middle class to those with higher living standards.
That’s why you will find that perfumes have very high price tags. However, sellers are sure that many customers will surely go for that product regardless of the price tag.
You can avoid perfumes by using cheaply available cosmetic products. You would be able to save tons of cash if you started doing that.
4. Goods from the bakery
Some products like Doughnuts and bread have very high markups. You can consider baking them at home, and you will be saving a lot of cash.
These are other kinds of products that have a high markup. You will find yourself paying like $2 for a bottle of beverage in a 5-star restaurant which you can get with $0.3 in some other restaurants.
Consider comparing prices because the products are usually the same.
Diamond is another product with a high markup ranging from 50% to 200%, which is very high. However, due to its sparkling nature, buyers do not bargain while buying diamonds. In addition, the sellers also know that people who buy diamonds are rich, hence the reason to exaggerate the prices.
Consider doing window shopping over several shops and then come up with a final decision. Also, you can see how you can avoid mistakes while buying jewelry here.
7. Medical services in private hospitals
There was a time I needed some medical checkups, and the hospital notified me that my insurance could not cover the services. So, they told me that I needed $25 to get the service. So, I decided to seek a different opinion from a public hospital. To my surprise, I got the service I needed free of charge.
The bottom line
You can seek alternatives while searching for a specific product. You can also consider DIY techniques, and you will not fall victim to the high-marked-up products.