Fashionable Watches

The True Cost of Your Favorite Things

The True Cost of Your Favorite Things

Here’s how much your favorite things actually
cost! 10 – Nike shoes
Just how much does it actually cost Nike to manufacture a pair of shoes? It costs Nike an average of only $28.50 to
make a sneaker that will sell for $100. For example, the Nike Air Max 2016 cost $33
to make. But it sold at a retail price of $190. The Nike Free Run 2016 cost a mere $18 dollars
to make but it sold for $100. The average 100 dollar Nike sneakers are sold
to wholesalers at $50, meaning Nike will get back $21.50. Of course, not all of that is pure profit
as there are other costs involved. The final profit on the 100 dollar sneaker
comes to around $4.50 a shoe. Multiply that 4.50 by millions of shoes sold
a year, and that’s a lot of money! One way that allows Nike to outearn their
competitors is with their overseas sales in lower-taxed countries. Continued overseas expansion has helped Nike
to continue to grow its bottom line. Quick, do us a huge favor and hit that like
button because you like helping us out! 9 – Cosmetics
The cosmetic industry in the U.S. generates $50 billion in revenue each year. The price of lipstick, makeup and various
skin care products isn’t driven by the cost of the products. The real cost for companies come in the form
of marketing. Beauty companies get celebrities to market
the products to their fans. And that costs money. A lot of it! For many people, price isn’t the deciding
factor in their purchases. If they think one product is of higher quality
than a cheaper one offered by a rival company, they’re willing to pay more for what they
perceive to be a better product. And this is precisely why marketing exists! It’s all about the perceived value, not
the actual value something delivers. People just want to FEEL like their products
work, even if it actually doesn’t! As a result, the average retail markup on
cosmetics is about 50 to 60 percent. The big names in the beauty industry are able
to achieve high gross margins between 60 and 80 percent! You can almost always find a cheaper drugstore
product that will do pretty much the same job of an expensive cosmetic item. 8 – Daniel Wellington Watches
In the era of social media, it’s very likely that you’ve heard of Daniel Wellington watches. And chances are, you may know them better
than any other watch brand that’s been in the watch industry for many more years! But here’s the story that’s not being
told by all the Instagram influencers you see wearing Daniel Wellington watches. They’re mostly priced in the $149 to $229
dollar range – pretty affordable for a great watch, right? Well, it’s a good price for a nice looking
watch. However, many people would disagree on the
word ‘great’. The quartz movement is made in Japan while
the watch is assembled in China. The materials used don’t justify the price
that it’s sold at. The cases are thin and barely waterproof. With such a cheap manufacturing process, you
can actually buy one with the same design at just around $10. Is it worth paying extra for just the name? Are you enjoying learning with this video? Don’t forget to hit the subscribe button
and the notification bell! Because you don’t want to miss our upcoming
video on the most counterfeit items! Filip Tysander, the founder of Daniel Wellington
watches, has built himself a fortune. But despite the crazy growth of his company,
he hasn’t done anything to change or improve the quality of his watches. But really, does he have to if people continue
buying the watches? The company would much rather focus much more
on marketing and branding, rather than improving the quality of their watches! 7 – Eyewear
For many people, glasses and sunglasses are a basic necessity. But if we’re keeping it real, designer eyewear
can get really expensive! Designer frames can easily cost north of $400,
while standard glasses from a company such as Pearle Vision can start at around $80. But it turns out that these prices are marked
up, way up, depending on the brand. There’s essentially just a few select manufacturers
for designer eyewear. The biggest eyewear company is the Italian
group Luxottica. They own and control a large portion of the
eyewear market. Luxottica makes eyewear for brands such as
Dolce & Gabbana, Oakley, and Ray-Ban. They also manufacture glasses for ultra high
end brands such as Prada, Chanel, and Versace! Yep, even though the brand on the stem is
different, they’re all made by the same company. And by doing that, Luxottica manages to earn
a hefty gross profit of 64¢ per dollar in sales! Experts say that the actual cost for frames
that are at a middle level of quality is around $4 to $8. For the higher quality designer frames, the
cost is at most around 25 dollars. Yep, designer sunglasses that cost 500 dollars
or more, cost less than 25 dollars to make! 6 – The iPhone
So what exactly is the cost to make an iPhone? Let’s take the 256 gig iPhone XS Max. This phone retails for $1,249 dollars. But it’s actually pretty expensive to make,
because it costs $443 dollars to make an XS Max! Let’s take a look at the breakdown! Unsurprisingly, the huge 6.5-inch OLED display
is the phone’s most costly component at $80 dollars and 50 cents. The A12 processor and Intel modem is $72 dollars. The memory costs $64.50. The mechanical parts and housing cost $58
bucks. And the cameras are $44 dollars. The remaining cost of $124 per phone is what
the testing and assembly costs average to. Back during the iPhone’s heyday, Apple reportedly
made 74 cents on every dollar of revenue on the sale of each iPhone. However, earnings have gone down since. Obviously, despite the dip, Apple is still
doing just fine. Even though iPhones account for 18% percent
of smartphone sales, Apple earns a whopping 87 percent of the industry’s profit! 5 – Diamonds
If you’re buying diamonds at all, you’re not getting much value for your money. A lot of people think that diamonds are an
investment…..they’re not. In case you haven’t heard the news yet, the
diamond industry is basically a massive scam. First of all, diamonds are nowhere near as
rare as we’ve been led to believe. There are other gemstones, such as rubies,
which are in far shorter supply. Yet, thanks to aggressive ad campaigns since
the 1930s, we still believe that diamonds are the jewel to beat. They’re not even a sound investment, thanks
to fluctuating values. Shoppers in the market for a diamond should
be prepared to pay anywhere from 50 percent to 200 percent more than the wholesale cost! Tiffanys is one of the most well-known luxury
brands there are, but are you really getting what you pay for? If you buy a diamond from Tiffany’s, you’re
pretty much just shelling out extra money for the name. And the blue box. Other jewelers sell diamonds without the steep
prices. A diamond is a diamond. A Costco diamond of a quality similar to one
sold at Tiffany’s can be thousands of dollars cheaper! 4 – Starbucks coffee Americans drink coffee more than any other
packaged beverage product! People in the US drank an incredible 88.8
gallons of coffee per capita back in 2016, which is more than soda, tea, and juice combined! But coffee is also one of the products with
the highest profit margins. Chain coffee shops such as Starbucks know
this all too well. The actual coffee in a grande Starbucks Cappuccino
costs roughly 31 cents. But the drink itself sells for around $4. The margin in this scenario is around 90%
on the coffee alone. Research confirms that on average, the usual
margin for coffee shops is around 80-90% per cup! True, your local coffee shop will probably
have slightly lower margins as their bulk pricing isn’t likely comparable to Starbucks. But still, even at 50 to 75 cents per cup,
the margins are still high on a cup of coffee! 3 – Movie theater Food We all know snacks at the movies are expensive. And that’s why so many people try to sneak
stuff in. But have you ever wondered just how crazy
expensive it is? Popcorn, for example, often sells at a price
that reflects over a ONE THOUSAND percent markup compared to the cost of the kernels! The true cost of making popcorn is around
$0.35 per bag, while we buy it for around $6 or $7 bucks! A medium soda costs a few cents for the theater,
but they sell it for $5 or $6! But, there is a reason why prices are this
crazy. It’s kind of a double edge sword. Well, that’s if you actually buy snacks
at the movie theater. By charging high prices on the concessions,
theaters are able to keep ticket prices low. After all, movie theaters have to rely on
concession sales to keep their businesses viable. Although concessions account for only about
20% of gross revenues, they represent roughly 40% of theaters’ profits. That’s because ticket revenues are shared
with movie distributors, while 100% of concessions go straight into the theater owner’s pockets! 2 – Luxury Sneakers
As luxury brands look to gain a stronger foothold in the so-called “sneakerisation” market,
competition remains fierce. So many chunky shoes are out there today,
much to many people’s dismay. But we’re going to look at Gucci as an example
anyway. A pair of ACE Gucci sneakers cost over 500
bucks – but what’s the cost to manufacture them? Well, for starters, luxury brands definitely
have higher margins. One of the reasons the industry is so attractive
for investors are profit margins of 18%-25% percent, which are both achievable and sustainable
in the long run. With the higher craftsmanship and higher quality
materials, a premium gucci sneaker is going to cost more than any regular pair of Nikes. If a pair of Gucci Ace sneakers cost 600 bucks,
the actual cost of manufacturing that shoe is most likely going to be anywhere from $75
to 100 dollars, depending on the materials used. Just because a gucci sneaker has a lot of
canvas on it, Gucci isn’t going to bring the price down! Remember the roughly 30 dollar cost to make
a pair of 100 dollar Nike sneakers? The process to manufacture Gucci shoes really
isn’t ALL that different. The material is going to be a bit more expensive,
and the workforce is probably a bit more skilled. But the cost to manufacture isn’t going
to get astronomical until we’re talking completely handmade shoes. And the Ace Gucci sneaker is definitely not
one of those shoes! But the more perceived value you can put in
a sneaker, the more you can charge! The reason for the high sales price tag is
two fold. Luxury brands have a lot more to pay to have
their product reach the right people. That and to give the feeling of high quality. People tend to associate high priced items
with quality. But that’s NOT always the case! Luxury brands also have to spend a large chunk
of the MSRP on advertising and marketing. Then they have to spend a chunk more on store
design and branding. Then it’s another slice for producing fashion
shows! 1 – Designer water Bottled water is wildly popular but also,
wildly overpriced. In fact, for the price of a single bottle
of Evian bottled water, you could pay for 1,000 gallons of municipal tap water. And you probably know by now that 40% of bottled
water is just filtered tap water anyway. With bottled water, you’re not paying for
the water, but rather for the packaging and the convenience. Beverage companies make billions of dollars
by rebranding water. Obviously, the water itself is actually one
of the cheapest parts of the final product. It usually costs only a few cents or less
to make it drinkable. After the cost of packaging, shipping, and
marketing, companies are usually left with a healthy 30% profit margin. Just to give you an idea of how much companies
earn by selling water: Fiji profits 90 cents per bottle, VOSS makes $1.20 per bottle, and
Evian manage to make $2.10 for a limited edition bottle! Watch this next video to find out about billionaires
who don’t care about the cost of anything!

Reader Comments

  1. A large coke from McDonald's costs them 3p and they sell it for £1.49(more now because of the sugar tax)… Now that is daylight robbery

  2. Did you guys remember to like comment and subscribe to the video? Coz if u dont they’ll tell you again and again and again.

  3. 5:48 really ? an X series i9 intel CPU? thats not in any phone haha thats a HEDT part 😀 its not a modem either and has little to do with the A12 SOC (!)

  4. First of all I don’t try to sneak food into the movies, I sneak food into the movies. And this video defines what the meaning of the highly overused and misused term “woke” is. Thanks 🙏🏾

  5. Stupid people think "authentic" is somehow better than the identical off-brand item. The funniest thing is those people who want "authentic" reproductions of something. It is amazing how loud dumb people can be when they are shrieking about the authenticity of something they have, or the counterfeit nature of something else, like the old biddies on something like the Ebay Purse board who just live to expose "fakes."

  6. 10. NIKE Shoes
    9. Cosmetics
    8. Daniel Wellington Watches
    7. Eyewear
    6. The iPhone
    5. Diamonds
    4. Starbucks Coffee
    3. Movie Theater Food
    2. Luxury Sneakers
    1. Designer Watch

  7. Great Video! I would love to see a similar break down of car manufacturers. From budget, to luxury. Forgive me if this already exists, I'm new to your channel.

  8. You guys also forget that something like the gucci ace id made in Italy with far higher wages for laborers than somewhere like China, although the markup may be high you pay for what you get which is more ethically produced shoes with higher end repairable materials from a world class designer

  9. i call BS on the iphone, $443 total BS. if you can buy a fake iphone at retail for $100. Apple's cost (not retail, not wholesale) is $443

  10. some of the time the materials they use or how much it costs them to make that item doesnt matter its the brand that matters the most, and the way to make a profit of your business you will need to sell them at a higher price.

  11. I have never heard of daniel Wellington where as there are more popular brands that are older. Timex, Nixon, bulova, Rolex, patek, etc. They are all more famous than Daniel Wellington

  12. Lets be honest. Why the hell this video 12 minutes? This should be 1 minute or less. And who else is sick of “leave a like! Subscribe n shit!”

  13. A lot of time the price on stuff it ain’t just about how much it cost to make but what goes into making it such as the iPhone developing and designing a new product

  14. In my opinion i believe in designer stuf you are not only paying for the material and the brand… you know to design a nice pair of shoes tha they do not exist, stand out and are exclusive only by the specific brand is a little difficult… for an example gucci shoes have some different bugs on them there's no way you will find a shoe like that in the market and if you find one it will be a replica. or off white Virgil abloh is using minimalism and that's what makes the shoe different from the others and one more thing would you like going outside and waching every person wearing the same brand and no one has its own style like… ok i know many people like me don't have so much money to buy those brands but if there's an item or a shirt or something that you would realy love to have and wear it then try something to upraise your incomes and save the money to go and buy it and at the end make your own style but not because it's expensive because you liked it and you want to wear for your personal use thats my opinion hope you liked it

  15. I hate channels who are on my tip the entire length of the video to like and subscribe it’s beyond annoying I actually dislike it every time it happens. If I like it I’ll like it you don’t have to coerce me to do it

  16. Cost of box of cereal crazy outrageous only few cents to make then you still have to add cost of the milk to go with it, you just paid equal to eating at high end restaurant for that bole of cereal.
    Also canned tomato prices I work at a large tomato processing company and we sell to all the major food brands world wide in industrial size containers they then break it down consumer size packaging and put there name on it selling it for what ever they want all these different brands claiming to be better when in reality they came from same suppliers I always smile when passing through the canned goods at the grocery store seeing the brands side by side knowing they both have our tomatoes in them.Ahahaahahaha!

  17. In Ireland a pair of Converse shoes cost about €55 and a pair of lookalike shoes from Primark (Penney's in Ireland )retail for about €12 for a very similar shoe.

  18. I have known this for a long time and have never bought anything just because of a name. Half this stuff doesn't even look that great.

  19. Movie theater owners get gouged. By Hollywood movies that don’t make any profit on the movies, so don’t blame the blame movie production paying millions of dollars to actors. Or when tv actors make millions a episode, we get more commercial.

  20. Water is pretty much water and when it goes through filtering then he becomes drinkable water, and the convenience To carry it around with you. IN your pocket, purse ETC…
    bottled water for me is 40 bottles for $3 So please take a more serious look at bottle water instead of just shooting out a statistic that us you heard others say.

  21. The iphone is mot really scam

    $430: Its cost to make
    $430: to make another iphone
    $430: profit /or pay taxes and employes

  22. I found this out in a marketing class. I saw a lot of people looking stupid in class. Nothing wrong with a treat, but I knew people that would go broke for name brands. I worked with a girl that spent her entire check on a purse then was begging everybody to get her lunch for the next pay period. Stop it.

  23. Wholesale Price + Production Cost X ~2.
    Retail Price = Wholesale Price X ~2.5.
    The same pretty much holds across all price points, no matter whether it's Gucci or Wal Mart.

  24. I have been trying to find a high quality watch with no logos and people are confused, but why would I want an ad on my wrist? You may as well wear a price tag on your wrist since we all have phones.

  25. When a salesmen tells sometimes I should buy something I have to explain to them I make clothes myself I know what things cost. I do buy expensive shit but sometimes I just can’t justify it. Saw a tshirt with Gucci printed on the front £500. Wtf

  26. The thing you forget with luxury sneaker is that they are made in Italy with way more expensive materials than in China, a gucci sneaker cost at least 120-150 to make

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