Prices that make you scratch your head

[robinson46176]

The local farm store sells the big brass snap hooks commonly used on horse lead ropes for about $8 each. They sell the bulk rope for just over $1 a foot (a lead rope is typically about 8' long). The sell the brass clamp for attaching the hook for about $4. OK, about $20 total. They sell the same parts already made up from the exact same materials for about half that amount...

I was at the Amish consignment auction Saturday that they hold twice a year to support their schools. A non-Amish tack dealer who sells new tack at auction at several sales sold several dozen lead ropes made exactly like the ones above and seemed quite pleased to let them go at about $4 each...
He travels all over the place and has done this for years. He has to be buying these things at about $2 to justify his time and fuel as well as pay shipping of some sort even if he trucks them himself. Note too that he is paying the auctioneers a consignment fee.
That means that the guy (or sweat shop kids) that actually makes them up can't be paying more than a buck for all three components combined...

My two questions are:
#1. How far on back the chain do you have to go before everything is free?
#2. Why does the local farm store want $8 for that hook?
I hate to throw any thing away but I have two leads with broken hooks (long scary story as to how they got broken ) but I can't rationalize replacing the hooks. I guess I will cut the ropes into handles for wooden boxes.


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[Ed in Tampa]

The local farm store sells the big brass snap hooks commonly used on horse lead ropes for about $8 each. They sell the bulk rope for just over $1 a foot (a lead rope is typically about 8' long). The sell the brass clamp for attaching the hook for about $4. OK, about $20 total. They sell the same parts already made up from the exact same materials for about half that amount...

I was at the Amish consignment auction Saturday that they hold twice a year to support their schools. A non-Amish tack dealer who sells new tack at auction at several sales sold several dozen lead ropes made exactly like the ones above and seemed quite pleased to let them go at about $4 each...
He travels all over the place and has done this for years. He has to be buying these things at about $2 to justify his time and fuel as well as pay shipping of some sort even if he trucks them himself. Note too that he is paying the auctioneers a consignment fee.
That means that the guy (or sweat shop kids) that actually makes them up can't be paying more than a buck for all three components combined...

My two questions are:
#1. How far on back the chain do you have to go before everything is free?
#2. Why does the local farm store want $8 for that hook?
I hate to throw any thing away but I have two leads with broken hooks (long scary story as to how they got broken ) but I can't rationalize replacing the hooks. I guess I will cut the ropes into handles for wooden boxes.


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Question #1 Nothing is ever free. But many people have never learned this and are constantly looking for free.

Question #2 Because people with more money than brains will pay that amount. However people that do have brains wait around for the guy that sells the whole rig for $4 and buys them.

I have seen People with more money than brains buy something like a $8 hook when the whole rig is right beside it selling for $4 and justify it by saying all they needed was the hook. ????????????

[dforeman]

I really can't comment on the guy selling the leads at the auction. Auctions are kind of hit or miss in that manor. Sometimes you make a profit and sometimes you take a loss. At some of the auctions that I attend, if a seller wants to sell his merchandise at that auction they have to take what the highest bid brings or pay a fee/buy back that item. I guess it is the auctioneers way of paying for their efforts reguardless if the item sells or not. So, maybe for this guy it was just cheeper to let them go. Now the fact the farm store sells them for about half the cost of the parts is not a real big surprise. Often the companies who make these things buy in bulk, so they get the parts a lot cheeper than you and I who would buy those same items by the piece.

[cincinnati]

I think you can say the same thing about everything.

How many times do we build something in our shops that end up costing the same or more than what you could go out and buy one.

I worked in retail for many years. Sometimes it is hard to have everything priced at or below other stores. For example a store may buy all their supply from one vendor. For some reason that vendor may be priced high on the snap hook in question but it makes no sense for the store to set up another vendor just for a snap hook. This is where the buyer for the store needs to deal or cost average things out.

[heathicus]

The flip side of your observations with the lead rope parts and assembly happen as well.

My wife has started making her own cleaning supplies. She started with laundry and dishwashing soaps and has now moved to all-purpose cleaners, hand soap, lotions, etc. The individual ingredients are cheap and she can make a 6 month supply of laundry detergent for a fraction of the price of a box of something like Tide that would barely last her a week. (And she says the homemade stuff works a LOT better.)

But she has seen the "kits" for sale, where people have packaged and prepared the ingredients so all the purchaser has to do is mix them together. They are usually smaller quantity than she can make AND cost several times MORE than all the individual components added together. And they have no problem selling them. My wife could put together the same "kit", offer it at half the price that other people are, and still make a very nice profit. I've tried talking her into going through with that, but she is hesitant.

[Ed in Tampa]

I never understood why buying bulk is cheaper. Unless the manufacture has no stock and has to setup and tear down. However if the manufacture has bin of 500 why should he be able to sell 10 cheaper than 1? Sure handling cost would probably be slightly lower you can reach in a grab one or 10 for the same effort and time but aside from that there should be no difference unless the manufacture is making way to much profit on one.

I question manufactures that offer cheaper in bulk prices unless the bulk is whole run. Such as a pens made with your logo. Then it makes sense the manufacture can spread the setup cost over thousands instead of just one.

However for a manufacture that makes say screws why should he be able to sell 5000 screws for cheaper then 10 provided he is asking a fair price for the ten?

Now if a manufacture offers an item packaged as a single item and then offers 10 of those items in a single box I can see where he saves on packaging and thus can offer a bulk rate saving.

But if you go to Home Depot you see contractor paks where they have 4 light bulbs in four packages shrink wrapped together for less than a single light bulb in it own package. In truth the contractor pak should be more expensive since the manufacture had to go through the additional step of shrink wrapping. Again I understand there are some savings at check out only one item to scan or stocking putting one at a time on shelf versus four at a time.
But this concept happens all the time.

Makes no sense yet the American consumer falls for that line of thinking all the time. And Manufactures knows it. Now they are playing games. Go get a box of Tide the small 32oz package will often cost less per oz than the large 128 oz package. Same product but because manufactures have tricked people into believing the "buying in bulk" myth they are able to use that thinking to greedly increase their profits.

Like I said there are many that have more money than brains.

[brad_nalor]

Ed in Tampa- It's about volume based in packaging cost and cash flow at all levels, from manufacturer, distributer, retailer. Not into explaining economics 101 here on this board but the bottom line is squeezing more out of a dollar. Some even 'dump' product to make a profit elsewhere or enhance another sale. Also moving the dollar as a tactic against a competitor is common. For the retailer, shelf space at a big box retailer is measured how much that square foot can earn and nothing more. Suppliers battle for it and use all sorts of tactics.

By the way, the Amish have a competitive edge in many aspects but some are over-rated. They are business people too and realize losses. Have seen bad or incorrect made buggy wheels and the buyer has to negotiate the issue but usually end up eating the cost for another set. Just business folks.

Ask yourself why does a small steel flat washer cost 15 cents?

[gregf]

In some cases the price discrepency is due to no one noticing or questioning it.
I used to do cash register programming for a major hamburger chain.
Frequently I would get a price update from a regional director that would have a combo priced more expensive than the individual items.
A phone call would usually get a "that's not right" response and a change to the change request.
Other programmers I worked with, never questioned the change and just sent them out.

[robinson46176]

In some cases the price discrepency is due to no one noticing or questioning it.
I used to do cash register programming for a major hamburger chain.
Frequently I would get a price update from a regional director that would have a combo priced more expensive than the individual items.
A phone call would usually get a "that's not right" response and a change to the change request.
Other programmers I worked with, never questioned the change and just sent them out.

$2.99 each or 3 for $10...


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[Culprit]

My wife has started making her own cleaning supplies. She started with laundry and dishwashing soaps and has now moved to all-purpose cleaners, hand soap, lotions, etc. The individual ingredients are cheap and she can make a 6 month supply of laundry detergent for a fraction of the price of a box of something like Tide that would barely last her a week. (And she says the homemade stuff works a LOT better.)

My wife would love to have the recipies and try making her own, if you're willing to share them.