Personal Finance , Make Money

What Is The Average Markups On Diamonds

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 10 minute read

Sometimes you have to pay a higher price than usual since there’s no other way to get what you want. It’s true that you don’t always get what you pay for, but there are situations when shelling out extra returns greater results.

However, wise shoppers know that you don’t always get what you pay for. Sadly, there are occasions when you receive far less.

Everybody in the retail, manufacturing, and branding industries has to eat, so if customers are ready to pay more, the price will go up. When the market requires a higher price for a product, it’s only natural for the producers to want to recoup as much of that profit as possible, regardless of the true expense of production and promotion. If you want to be a savvy shopper, you need to know which products have exorbitant markups so that you may avoid them.

To put it another way, it can point you in the direction of more reasonably priced options. For this reason, you should probably avoid purchasing such costly things.

Products with Expensive Markups

  1. Printer Ink

For those who silently curse whenever their printer reaches its ink limit, running out of ink is a frustrating and expensive problem. Because my printer requires individual cartridges for each color, I frequently need to replace a large number of cartridges at once. To make matters worse, I often spend more on ink than I did on the printer itself.

But it is the main reason why ink costs so much. Manufacturers often lose money on printer sales, but they recoup those losses by charging exorbitant prices for the ink and toner you’ll need to keep your printer running well.

Using the average price of $16.99 for a normal 3.5 mL cartridge, the actual price of a gallon of ink is $65,000. That outstrips the price of both champagne and petrol. Buying expensive ink cartridges again and over may be a strain on your wallet and your sanity.

The expense of new printer ink can’t be avoided, but you can save money by buying refilled cartridges online or at the Costco Photo Center. In most cases, refilling or buying previously used cartridges is a more cost-effective option than purchasing brand new ones. Refilled cartridges may be purchased through retailers like 123inkjets and the physical Costco Photo Center for a fraction of the price of brand new cartridges. Black HP 60 ink costs $18 when purchased fresh from an office supply retailer but only $9.49 when refilled from Costco.

Alternatively, you may invest in a laser printer. Laser printers have a lower total cost of ownership than inkjets since they use cartridges less frequently. Finally, you may try to reduce the amount of paper you use by not printing as much; I find that most of the documents I need to print, such as itineraries and discounts, can be stored on my phone, which is both more convenient and better for the environment.

  1. Bottled Water

For those who silently curse whenever their printer reaches its ink limit, running out of ink is a frustrating and expensive problem. Because my printer requires individual cartridges for each color, I frequently need to replace a large number of cartridges at once. To make matters worse, I often spend more on ink than I did on the printer itself.

But it is the main reason why ink costs so much. Manufacturers often lose money on printer sales, but they recoup those losses by charging exorbitant prices for the ink and toner you’ll need to keep your printer running well.

Using the average price of $16.99 for a normal 3.5 mL cartridge, the actual price of a gallon of ink is $65,000. That outstrips the price of both champagne and petrol. Buying expensive ink cartridges again and over may be a strain on your wallet and your sanity.

The expense of new printer ink can’t be avoided, but you can save money by buying refilled cartridges online or at the Costco Photo Center. In most cases, refilling or buying previously used cartridges is a more cost-effective option than purchasing brand new ones. Refilled cartridges may be purchased through retailers like 123inkjets and the physical Costco Photo Center for a fraction of the price of brand new cartridges. Black HP 60 ink costs $18 when purchased fresh from an office supply retailer but only $9.49 when refilled from Costco.

Alternatively, you may invest in a laser printer. Laser printers have a lower total cost of ownership than inkjets since they use cartridges less frequently. Finally, you may try to reduce the amount of paper you use by not printing as much; I find that most of the documents I need to print, such as itineraries and discounts, can be stored on my phone, which is both more convenient and better for the environment.

  1. A cup of coffee from a coffee shop

When you throw in the price (and the calories) of all the extras you may get with your coffee order at a coffee shop, you’ll quickly realize that buying coffee there isn’t a bargain. It costs about $600 a year to have someone else prepare your coffee if you buy a large coffee on your way to work three times a week for $4. Do you not think that saving that $600 would be a better use of that money?

Value Substitute: If you’re like most people, you can’t function without your daily cup of coffee. However, as a customer, you have the last say. Instead of stopping at your favorite café and waiting in line, you may buy a bag of coffee or a package of tea and boil your own for approximately $0.06 per cup.

A few preliminary expenditures are required: Compared to the new Keurig single-cup brewer, which starts at $99, a Mr. Coffee brewer costs $20 and above. A tea kettle for the stove top will run you between $10 and $20, while a French press that holds 34 ounces would set you back between $20 and $40. If you’re an espresso addict, you may spend anywhere from $60 to $100 on a good machine.

You can get Torani Flavored Syrups, which are used in anything from vanilla lattes to caramel macchiatos, with a simple Amazon order. It’s possible that brewing your own coffee and other specialty drinks at home will become a relaxing pastime for you.

The initial investment may seem high, but the long-term savings (and ease of use) more than compensate for it. Get yourself an insulated travel mug so you can keep drinking coffee at home and avoid the coffee shop every morning.

  1. Perfume

Perfume is a “luxury product,” and as such, its price tag should reflect that. Perfume and cologne are scented products, yet the components used in them are not particularly scarce. Overpriced luxuries are what you’re really paying for.

Brands of perfume are marketing more than just scents; they’re peddling an entire way of life. Which is why we see TV and magazine ads featuring well-known actors and actresses as spokespeople. Consequently, a sizable percentage of your budget is allocated to advertising, seeing as how hiring Keira Knightley to be the face of Dior certainly doesn’t come cheap.

As an inexpensive alternative, try investing in a distinctive smell for when you go out. Instead than buying the latest celebrity-endorsed perfume, I recommend investing in something traditional, like vanilla, which will always be in style. If you invest in one high-priced bottle of your trademark smell, you may use it season after season instead of constantly replacing your fragrance collection.

One expensive bottle of perfume should last you quite a while because a standard 50 mL bottle holds 730 sprays, or enough perfume for roughly two years if you spray once per day. Spending less on one bottle of your trademark smell than on five of the season’s hottest fragrances ensures you won’t go broke trying out new fragrances.

And if you want to save money, you can easily make your own by combining a carrier oil, such as almond oil, with a few drops of your preferred essential oil. The ratio of lavender oil to orange oil to almond oil should be 1:6. Oils are available for around $8 per bottle at health food stores and via Mountain Rose Herbs online.

Instead of perfume, you may try scented body lotion. It’s usually less expensive, and the fragrance lasts all day on me, so I use less of it.

  1. Movie Snacks

The pricing at the theater’s snack bar are really outrageous, as anyone who has ever been there will attest. The popcorn and candy at the movies often end up costing more than the tickets itself when I take my kids. It’s baffling to a moviegoer who just wants to relax with a bag of popcorn because we all know there isn’t a global popcorn shortage. Still, the money you spend on popcorn goes toward covering the cost of showing the movies the theater has paid to have screened.

In fact, whereas concessions make up just 20% of theater total sales, they account for 40% of profits, according to a study conducted by the Stanford Graduate School of Business. That’s because theaters provide a portion of their ticket sales revenue to the studios, but keep all of the money made from concessions.

Movie theaters primarily deal in “secondary products,” such as snacks and drinks. Most of your movie theater budget will be spent on snacks and drinks, even if that’s not why you went.

Value Substitute: If you want to save money on concessions at the movies, you may choose from a wide variety of alternatives. You could either have a meal before watching TV in order to avoid the urge to snack, or you could give in to your child’s popcorn hunger and choose a smaller serving size. Getting a tiny popcorn, small drink, and sweets at my neighborhood movie for $3 doesn’t break my budget or my diet plan.

  1. Engagement Rings with Diamonds

Diamonds have a very high markup largely due to their great demand. The diamond industry behemoth De Beers is to blame because it was they who, in the 1950s, popularized the “two months’ income” benchmark as the standard for engagement ring pricing.

Forbes reports that because of competition from internet jewelers like Blue Nile and James Allen, the markup on diamonds has dropped from 100% to 20% to 40% in recent years. Even yet, a Tiffany diamond may be marked up 400%, and the typical American diamond engagement ring costs $4,000. That’s money that might go toward a down payment on a house.

Value Substitute: The only reason a certain diamond brand is coveted is because of marketing. Vintage gems and lab-created diamonds, which are identical in every way to mined diamonds except for their far lower prices, have become more popular as alternatives for engagement rings.

Even fewer choose for the traditional diamond, choosing instead a more modest, understated band. Find out more about your alternatives and decide if the custom is worth the cost to you.

  1. Brand-Name Prescription Drugs

Profit margins for pharmaceuticals are high, as seen by the constant assault of TV commercials hawking the latest wonder drugs available only with a doctor’s prescription. However, prescriptions with a well-known brand name come with huge price tags because of the investment in advertising, sales incentives, and product development.

As an example, consider the antidepressant Prozac: It costs $136 each bottle, but fluozetine HCL (the generic) costs only $3. It’s the same thing with a new name, but the price tag is 4,451% more.

Value Substitute: Firstly, physicians may prescribe expensive brand-name medications without thinking twice because pharmaceutical sales reps have convinced them of the necessity of these medications, and secondly, they may believe that insurance would cover the cost. However, if you have a high deductible for prescription drugs, you should always request the generic version from your doctor, since many pharmacies now provide generic prescriptions for around $3 to $10.

When I have migraines, I take the generic version of Imirtex. As opposed to Imitrex, which costs approximately $130 each bottle, generic sumatriptan may be purchased for as little as $10.

  1. Text Messages

If you don’t have a plan that includes unlimited texting, each message might cost you up to $0.20. It’s not a big problem until you’re having a back-and-forth discussion with a buddy or coworker. However, the actual cost to send a text message is only $0.0033, thus the markup for cell phone companies is a healthy 5,960%.

Value Substitute: If you find that you are frequently paying an exorbitant charge for individual messages, it may be worthwhile to switch to a plan that includes unlimited texts. Call your cell phone company and find out if paying an additional flat price of $5 to $10 per month is less expensive than paying for each text.

For me, it’s important to make extensive use of data-based communications. If you have an iPhone, you can send and receive iMessages without using up any of your message allotment, regardless of whether you’re connected to WiFi or not.

Line is great for group conversations with extended family members who live far away, and I really enjoy using WhatsApp and WeChat for their free messaging features. All three may be used regardless of whether you’re connected to the Internet or WiFi, and they won’t count against your monthly text limit.

Bottom Line

It’s important to conduct your research before making any large purchases so you know exactly what you’re getting for your money and not just paying for flashy advertising or excessive markups.

You may save hundreds of dollars yearly by analyzing your most frequent purchases and seeking out cheaper alternatives. This is another evidence that sparing your spending habits might help you maximize your returns.

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