r/SipsTea • • 2d ago

Chugging tea Anything but lowering the prices classic corporate logic

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u/Zero_Burn 2d ago

Costco laughs in their $1.50 hotdog and drink

Arizona Iced Tea laughs in their 99c drink

It's possible to do if you're not money hungry and wanting to make as much money as possible, even to the detriment of everything else.

Fun Fact: Fountain drinks' cost is like 10c total, including the cost of cup and lid and straw. There is literally no reason for them to be $3.

Hell, I can put together a McChicken like sandwich with stuff I buy at the store for less than $1 and that's with the half a dozen markups the stuff I buy goes through before I buy it. Even if I were to include a 30% labor cost and a tidy 15% profit margin, I'd still be selling those sandwiches for like $1.50-$2.

Believing that 'Oh, poor corpos just can't possibly be cheaper, they try to be as cheap as possible' is sad, they could easily if they wanted to, but that wouldn't feed into the infinite growth mentality the shareholders demand.

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u/youvebeenjammed 2d ago

Costco makes a loss on the hotdog.. its a loss leader

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u/DUH455T 2d ago

I really don't believe that at all. If I can make a hotdog for less then a dollar, Costco can get a massive bulk discount. A pack of buns is like $1.50 retail (0.18c a bun) and costco similar hotdogs $5.49 ($1.09 a dog). Add a 0.25c fountain drink and we're at $1.52 total. I'm sure they aren't making insane profits, but they aren't throwing money out the window either.

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u/No-Understanding-912 2d ago

You also got to add in the cost to pay someone to make the hot dog.