Retailers mark up products by hundreds of times their cost — but you don’t have to pay the premium.
If you’re a merchant, the only way to profit is to sell stuff for more than you pay for it. As a consumer — whether you’re sipping a martini in a swanky bar or swilling bottled water from the grocery store — you are swallowing that markup. Fortunately, you can save a lot of money simply by paying attention. Following is a list of products with high markups, along with ways to avoid paying a premium.
1. Prescription drugs
Astronomical prescription drug prices — with markups ranging from 200% to 3,000% — are enough to give patients a headache or even an ulcer. To save on prescriptions, ask your doctor about generic substitutes. Comparison shopping is also a great idea.
Shoppers in the market for a diamond should be prepared to pay anywhere from 50% to 200% more than the wholesale cost, according to TheStreet.com. A diamond’s sparkle may cause shoppers to turn a blind eye to the price tag, but you can land a better deal by understanding what you’re buying and doing a lot of shopping.
3. Bottled water
Bottled water’s markup can be outrageous. Saving is simple: Drink tap water. If you’re concerned about taste or quality, use a water filtration system.
Order a glass of Coke when you’re dining out, and you will pay a ridiculous amount for what is essentially sugary water. Sure, you know going into a restaurant that you’re paying for the service and ambiance, too. But if you’re looking to save without sacrificing a night out, skip the extras like soda and opt for water instead.
It’s not uncommon for restaurants to charge two or even three times retail for a bottle of wine. So, scan the menu for a reasonably priced bottle. Tip: Look for house wines.
6. Bakery goods
Go to a bakery, and you could be paying a budget-busting markup for items that you can instead easily bake at home. Granted, convenience is a factor — especially for labor-intensive treats. But if you’re a big fan of homemade bread, consider spending $50 to $200 on a bread-making machine for your kitchen. You throw in the ingredients, turn it on and walk away until it tells you it’s ready. (Your nose will also alert you!) It’s a relatively small investment to put a wide array of fresh-baked breads at your fingertips.
An orchid can cost up to $25 per stem. Add a holiday like Valentine’s Day or a wedding into the mix, and prices can surge. While disregarding flower purchases altogether isn’t always an option, shopping around for the best price is. Check out online retailers and buy in season to help cut costs.
Buying produce in season is the best way to find a bargain. Look for deals on grapefruit and oranges in January, asparagus in March and melons in June. Also, steer clear of pre cut veggies and fruit, which often have a big markup.
9. Furniture and mattresses
Furniture stores usually make a hefty margin, with big markups. Try to shop during sales, but if your timing is off, don’t be afraid to negotiate a better price. Also, take note of the product number and then search online to see if any other retailers offer a lower price.
10. Coffee and tea
Lattes are one of life’s little luxuries, but they can be marked up by a crazy amount. If you’re looking to save, start by turning on your coffeemaker at home and bypassing the coffee shop.