# Why are things so expensive???



## Giles (Jun 22, 2012)

It is my belief that "middle man profit" is the main reason products cost so much. I have a friend thats in the retail business and he says many things are priced 400% above what the manufacturer makes Of course I realise there are many contributing factors, such as shipping and handling--but 400%
I know that business owners have many operating expenses--insurance, loss to theft, just to name two, but Greed is the greatest inflation
Just the other day, I was at a BB store and found a defective item. I asked the assistant manager what discount he could give, and was surprised to buy the item for a fraction of the marked price. Out of curosity, I asked him how he could loose that amount of money and he just smiled. Was that his cost??
I just don't understand how many people pay to have an item repaired, serviced or built.
My wife has a friend who just paid $148 to have one additional phone jack installed! She stated they were there less then an hour.
One of my friends hired a contractor to build a large outdoor deck. The material cost $1,289 and his labor, for 5 days work, was $3,400. That worked to be over $70 per hour
Sad thing is--prices will never go down.


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## oldognewtrick (Jun 22, 2012)

Giles, there are a couple reasons why things cost so much. People have to make a living. Just because the guy was there an hour, figure in travel time, tools and equipment expenses, gasoline, insurance(company/personal/auto/business/workers comp), salary, taxes, overhead, licenses, accountant...think the guys making a killing? He probably just made wages if he was lucky. 

They charge so  much for tools because thats what the market will bear and that is the perceived value of the item.

The only way to get prices down is quit buying stuff. Gas prices are down not because oil is cheaper, its because demand is down and there is a surplus.


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## Giles (Jun 22, 2012)

oldog/newtrick said:


> Giles, there are a couple reasons why things cost so much. People have to make a living. Just because the guy was there an hour, figure in travel time, tools and equipment expenses, gasoline, insurance(company/personal/auto/business/workers comp), salary, taxes, overhead, licenses, accountant...think the guys making a killing? He probably just made wages if he was lucky.
> 
> They charge so much for tools because thats what the market will bear and that is the perceived value of the item.
> 
> The only way to get prices down is quit buying stuff. Gas prices are down not because oil is cheaper, its because demand is down and there is a surplus.


As I stated--Businesses have expenses. People need to wake up and compaire!
I am fortinate in that I do practically all my own work. Sometimes special skill or equipment is needed and I have to bite the bullett.
Just a few weeks ago, I had a LARGE tree trimmed. I had to get FOUR estimates before deciding on the right company to do the job. I will not hire anyone to work for me that is not licensed and bonded, but the prices were higher for the Non-insured trimmers!
The higest estimate was $650 and the lowest was $275!
I paid the insured trimmer $275 and he had two men and a nearly new bucket truck They did a fantastic job and worked app 3 hours.
Money well spent because I checked around and didn't accept the first offering.
I realise that most people don't have the time to shop, but look what I saved by doing so


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## nealtw (Jun 22, 2012)

Bob Villa used to have a show on TV where he showed, those wonderfull houses of the golden age. That was a time before unions and pensions and medical plans for the middle class. The rich got real rich and built castles and the rest lived in something less while they scraped up a living. Divide and concor is when we think the problem is that trades men, store owners, truck drivers, teachers, and cops are making to much money. 
Trickle down is what they had in Egypt before they figured out it wasn't the store owner or the garbage picker that was driving up the prices.


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## isola96 (Jun 22, 2012)

Thanks for the trip down memory lane for us Neal
Good post!


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## CallMeVilla (Jun 23, 2012)

In the "Golden Age" of the 1950's, take a look at the wages to support the lifestyles.  How many suits did people own?  Did they have iPods, flat screens, huge houses, multiple vehicles, custom furniture, etc?  Is our standard of living sustainable with increased foreign competition and national arrogance?  Can we TRULY afford the luxury of "green policies" which raise the prices of everything domestically based on a non-economic policy decision while production in the rest of the world surges?  

Can we TRULY afford an expansionist government that takes a larger and larger share of the GDP, sucking productivity out of the private sector?  Who pays for all those "nice" regulations that cost millions to satisfy politicians and bureaucrats?

Things are more expensive because non-economic factors and regulators have the productive people by the throat.


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## nealtw (Jun 25, 2012)

Villa: I think that's way to easy, you have to tell us where to start.
Building codes, licences, permits or food inspectors, how about unregulated airplanes or boats.
As business people in free countries the most important freedom we have is the freedom to charge as much as we can or as little as we have to. Once you remove all this things that run taxes up you still have to compete, the guy that beats you now by a few dollars will still beat you by a few dollars.
I find it funny that some people will play by the rules and find a way to get to your American Dream, and then they spend millions of dollars trying to tell us that is that other guy that makes life hard for us. If that dream is to get rich and screw fellow man, help yourself.


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## CallMeVilla (Jun 25, 2012)

Our local building inspectors cost us three weeks delay because they would not honor an inspection appointment.  Carrying cost per day lost and the project backed-up because we could not close cement, drywall, or framing.  The it took three weeks to get the power from the pole cut so we could do the mandated main upgrade  . . . and another three days to get the paper work transferred before another two days to get the pole power restored  . . . ALL those costs go into the sales price to hit the projected ROI for the project.

The cost of raw materials is jumping even though the demand is down.  Why?  Cost of energy to produce and ship plus taxes going up.  Licensing and permits?  Municipalities see them as profit centers and see inspections are a law enforcement action, not a professional relationship to improve the housing stock.

Don't get me started on lifestyle choices.  North American spending habits are unrealistic.  Look at the saving rate in Japan versus us.  Living simpler is the model for the 2000's.  Anyone who thinks otherwise will be losing cars, trucks, and homes.


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## asbestos (Jun 25, 2012)

CallMeVilla said:


> Can we TRULY afford the luxury of "green policies" which raise the prices of everything domestically based on a non-economic policy decision
> Can we afford to keep using everything up?


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## nealtw (Jun 25, 2012)

CallMeVilla said:


> Don't get me started on lifestyle choices.  North American spending habits are unrealistic.  Look at the saving rate in Japan versus us.  Living simpler is the model for the 2000's.  Anyone who thinks otherwise will be losing cars, trucks, and homes.


With this I agree 100%. 
So you are saying the city needs more blood suckers to move your job along faster? I don't know about you but they found moer than a few mistakes that I have made.
Go check how many times the city has waved taxes for a new stadium or something so some millionare can hire more hot dog sales people or parking lot attendents, and ask yourself why the city is broke?


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## CallMeVilla (Jun 25, 2012)

Well, Neal, I'm not asking for taxes to be waived for the projects I work on.  What they do for millionaires is above my pay grade.

I just want prompt service like I get from the private sector.  Appointments should be kept.  We are in the business of improving the tax base by improving the housing stock.  Treat me fairly  --  if not like a hero!

BTW, in my city they are broke because they gave lavish concessions to labor unions so retirees could get fat pensions and free health care for life.  We have fewer cops per capita, less library hours, more pot holes, and a football team that can't seem to win anyway.

:0)


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## nealtw (Jun 25, 2012)

We don't work for min. wage earners. We work for people in the middle class and we judge how we are doing against how the middle class is doing or the national average wage. Right now we have less customers to work for because there less librarians building inspectors and road repairman. When you relax the regualation like we had for morgages a few years ago, everything works fine for a while. Lots of house building, renovating, flipping and lots more contractors. When the crap it the fan it never spreads evenly on the people in front of it, so we need some one to blame, for you it's unions, for me it's management. Unions are just like you when you present a quote, it's up to the other guy to agree or not.


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## isola96 (Jun 25, 2012)

All I can say is that it may look like things are getting back on track with jobs and home building, but underneath it all it's still a David lynch novel.... Just bizzare happenings example: there is over a hundred homes being built in a part of my town comes to fine out there manufactured homes that comes off the trucks in sections then ensembeled into 7 hundred thousand dollar homes if not more. 
So I don't get it.


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## asbestos (Jun 25, 2012)

I have found a simple rule if I am paying someone else it is expensive. If people are paying me everyone wants something for nothing.


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## oldognewtrick (Jun 26, 2012)

asbestos said:


> I have found a simple rule if I am paying someone else it is expensive. *If people are paying me everyone wants something for nothing*.



Ain't that the TRUTH!


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## ffisher (Jul 3, 2012)

It's very unfortunate...I find myself wondering the same thing as well. But I agree- people have to make a living somehow.


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## asbestos (Jul 4, 2012)

CallMeVilla said:


> BTW, in my city they are broke because they gave lavish concessions to labor unions so retirees could get fat pensions and free health care for life.  We have fewer cops per capita, less library hours, more pot holes, and a football team that can't seem to win anyway.
> 
> :0)



Yes it is the city workers who are making all the money, How much do you think they gave away (and continue to give away)to the football team? What about tax breaks for other types of pet projects? When in doubt, blame the unions.


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