We all love and enjoy branded cars, clothes, sneakers, and all the other toys, but we rarely ask ourselves how much do these products actually cost. The long and pricey road a product travels from a manufacturer to a distribution network catches a few zeros on its tail here and there, and today we will strip down the brands and take a look at how high is the real expenditure of our beloved belongings, and what it takes to make them.
Let’s start with cars, since the price of certain vehicles is almost legendary and incomprehensible to most of us. But let’s not discuss collectible automobiles, because the current price of the Ferrari GTO from the year 1963 is breaking all records, and as a collectible item it doesn’t concern us, everyday consumers.
A pricey ride
Believe it or not, car companies don’t make as much as we think they do, at least the world-famous ones. When a brand new Porsche arrives in the dealership, the manufacturer is making a humble 20 thousand dollars of it. Given the price tags those machines have on them, the difference is reasonable. The truth is, companies like Ferrari and Porsche actually make their money on the tracks, and they care more about their product’s reputation than making serious money from them. Reputation builds respectability, and that is the best form of advertisement. This is why they are investing heavily in their technology.
So, if you are contemplating on buying a new Porsche, know that you are in safe hands and that you will get your money’s worth. Companies like Toyota and Nissan are reasonable with their prices as well, but when you sum up the cost of registration, insurance, and the fact that its value will drop as soon as you drive it out of the dealership, a mountain bike is always a much healthier and economic form of transportation.
Poppin’ them tags
An average cost for a Nike shoe to get made is $30. Still, this manufacturer is the most popular brand in the world of sports, and that credit gives a lot of room for the company to dictate prices. In all honesty, we all love popping tags, and we shouldn’t be ashamed of that impulse. In fact, companies count on us to identify with their products, and this is called the Premium Pricing Strategy. Let’s break down that strategy quickly.
The first thing we have to do is to realize that we are all moderately materialistic. Even the ancient Romans loved to take a stroll down the forum in their finest Asian silk dress, accompanied by carriers in shiny uniforms. This is just in our nature, and our way of saying “look at me.” Our basic instincts command us to draw attraction, and same as peacocks present their feathers when they find themselves in a presence of a female, we love showing that gold Rolex, and make a statement about our status. Companies are counting on this instinct to guide us, and as we can all establish it’s going pretty well for them.
High-priced gadgetry
If you didn’t know by now, the cost to make an iPhone 6 is approximately $200. Of course, we should always count in all the advertisement, marketing, distribution costs, etc. But still, that device in the palm of your hand is actually moderately inexpensive to make. The premium pricing strategy might resemble the pricing strategies of the famous Dr.Evil, but still, we will gladly pay gazillions of dollars just to make that selfie which will automatically pop up the logo of the company on your social media account when you post it.
Since the prices of tech gadgetry are always dropping, same as the cars, this is probably the most unreasonable cost yet. The truth is that you can find online mobile shops that will sell you the exact same thing for a lot less money, but no one will see you standing in that line, waiting for your product. And on the other hand, most companies are pushing the exact same device, when it comes to specifications, but without that shiny logo we all know and love.
Now, as a personal and official disclaimer, we are all about branding and we all love that smell of the brand new merchandise. But with the state of the economy, maybe we should at least concentrate our colors on just a few things and find acceptable but useful replacements. Well, at least when we really have to.