Quite a few of the products and services flooding the market are simply too expensive when you consider the cost that the company incurs on them. Most consumers unknowingly end up buying these grossly overpriced products. Here is the list of the top 10 overpriced products or services that you should think twice about before you pay for them.
1. Text Messaging
2. Bottled Water
3. Brand Name Drugs
4. Popcorn at Movie Theaters
5. Hotel Minibars
6. Wine
7. Coffee
8. In Room Movies at Hotels
9. Greeting Cards
10. Precut Vegetables
Consumers are charged 20 cents for a 160 character text message, while it costs three tenths of a cent for the wireless carrier to process the message. These numbers translate to a 6,000 percent profit for the wireless carriers, making it the most overpriced service on this list. The number of characters for a message is limited to 160 as it is carried on a secondary data channel. According to experts, approximately 600 text messages take up as much bandwidth as a one minute mobile phone conversation and if the charges for text messaging were applied to a short cell conversation, then consumers would be paying around $120 a minute for it!
With consumers paying around 5 to 15 times more for bottled water as compared to tap water, the product brings in huge profit to the packaged drinking water industry. Analysts note that water that is packaged is highly priced owing to the fact that it takes the price of water in four bottles to make the plastic for one. The bottled water industry promises contamination free water and consumers expect the water that they purchase to be clean and disease free. However, not all water bottling companies filter the water adequately before packaging it. Instead of wasting money on bottled water, it is advisable to carry your own bottle of filtered water from home.
3. Brand Name Drugs
Both prescription and over the counter drugs are expensive. Branded drugs are estimated to be making profits of up to 3000%. The American Association of Retired Persons reveals that the price of prescription drugs with brand names has increased by 10% while that of generic prescription drugs has decreased. With the cost of generic drugs between 2009 and 2010 seeing a drop, the price hike of branded prescription drugs is simply unjustifiable. In fact, the latest price rise is the biggest in the last eight years.
Theatres make their revenue by selling snacks and drinks to movie watchers. These small refreshments are highly priced, so that the theater can earn greater profits. Popcorn is one of the most highly priced snacks available at a movie theatre. When you buy a bag of popcorn at the theatre for $6, you are paying almost a thousand percent more than what you would pay if you bought three 3.5 ounce packs of microwaveable popcorn at a local store for $3. One of the ways in which theatres lure movie watchers is by reducing the ticket prices. Lower ticket prices mean larger number of movie goers, who give the theatre’s overpriced snack stations ample business.
Hotels are known to overprice the food and drinks in their minibars. They are understood to make profits ranging between 300% and 400% with their outrageous minibar markups. In fact, some hotels have been known to charge around $10 per bottle of water and $12 for a tooth brush and tooth paste kit. Alcoholic beverages have even higher markups. So next time before you open a can of a refreshing drink in your hotel room, make sure you know what you are paying for it.
A bottle of wine at a restaurant is almost always extremely expensive. The reason why restaurant wine has such a high markup is because the restaurant owner factors in the price of stocking the wine and serving it, apart from the actual purchase price. Also, a wine bottle that is not used completely (by the customer) will be thrown away. Despite all these factors, you’ll find it difficult to justify the price that the restaurant is going to charge you.
You may want to think twice before making a trip to the coffee shop. The coffee you buy at a popular coffee shop has a mark up of around 300 percent or more. Coffee, when made at home, costs only a fraction of the amount that you pay to buy a cup of coffee at a coffee shop. Coffee shops also earn their profits from add ons. With consumers wanting additional whipped cream, shots, customized concoctions and more, coffee shops are making a killing by overpricing their coffee.
When you opt for an in-room movie experience at a hotel, you are paying 200% of what you should be paying, giving the hotel good business. You can avoid this high markup by watching the same movie at a local theatre. Instead of renting a movie for $10 to $15, you could rent the movie from a local rental store or carry the movies with you on your trip.
Greeting cards are priced at around 200% of the cost of making them. With most consumers opting to buy greeting cards from stores, the business is making enormous profits. Instead of buying a $4 greeting card from the store, you can make one at home or send greeting cards for free online.
Precut vegetables at the local department store are sometimes charged around 40% more than the uncut vegetables. Customers choose to buy precut vegetables rather than uncut ones to save time and effort. But they do not realize that these benefits come at a price, and a big one at that. Also, vegetables that have been pre-cut and stored lose their freshness prematurely. You can avoid purchasing such overpriced products by buying fresh vegetables from your local grocery and cutting them at home.
While doing away with text messaging completely is not feasible and it is hard to resist the temptation to buy delicious pop-corn at the theatre, you can avoid purchasing some of the other products on this list.