What is behind the public price of a product?

When we buy a product, we are logically sensitive to its price, whether online or in a physical store.

Sometimes, it is even used as the main criterion, to the detriment of the usefulness, longevity, and real value of the object. For example the periods of sales, contests, attracting many participants simply because it is free.

But if one is sometimes defiant in front of original products whose price one could not estimate oneself, so much they are unique, it is then difficult to see there clearly and to make an enlightened decision of purchase.

In this article, we will see what is behind the public price of a product you buy online.

The cost of production

This cost is often the focus of attention when trying to estimate the value of a product. However, it is very inadequate and sometimes even insignificant.

If you tend to think that the local pizza guy - charging 12€ for a pizza with 1€ of cheese on it - is making a fortune on your back and multiplying his investment by 12, you are probably way off base, and this is even more true in the online business.

The cost of production varies greatly from the final price, it can be 25% of the price, as well as 75%It depends on other factors.

  • "Brings warmth and originality to the office!"

    30€

    Minimouse - Wireless mouse made of real bamboo and delicately varnished.

  • "My office work seems less burdensome.

    90€ 100€

    Bigboard + Minimouse - Real bamboo keyboard and mouse and delicately varnished.

  • "A soft and comfortable feeling".

    24,99€

    Felt pad - Desk pad XL in felt for office.

  • "Elegance and warmth for your MacBook

    30€

    Bamboo Skin - Genuine bamboo protection for 13" and 16" Macbooks.

The cost of delivery

Very often underestimated, as it has disappeared from the landscape in favour of "free delivery". Delivery costs are now often directly included in the public priceEven when they are not, the rate is often a contribution that does not reflect the full cost of shipping.

This practice, while allowing customers to quickly know the real amount of their purchase, can hurt our vision of the right price.

Nothing is free in this world. Everything is atoned for, the good as well as the bad, is paid sooner or later. The good is much more expensive.

Louis-Ferdinand Céline

Nothing is free, if the delivery is free for you, it is paid for someone else (the seller). And often, we don't realize how much it costs.

Once again, the smallest parcel sent directly to the mailbox costs between 5 and 10€ for shipping. For a parcel between 1 and 2kg, it is necessary to count between 9 and 15€..

VAT

The VAT (Value Added Tax) on items sold online and in shops is set in France at 20%This means that if you want to make 100€ from your product, you will have to set its public price at 120€.

It is often forgotten, but the posted price is not the amount that ends up in the seller's pocket, as soon as the sale is made, he is already liable for a good part of the amount collected.

  • "Natural bamboo makes a difference!

    20€

    The bamboo pack - Real bamboo shell + screen protector

  • "A small revolution in a society where plastic is everywhere.

    20€

    The Bio Pack - A biodegradable and compostable iPhone case.

    Once it has reached the end of its life, don't throw it away! Bury it.

  • "Natural bamboo makes a difference!

    20€

    The bamboo pack - Real bamboo shell + screen protector

  • "A small revolution in a society where plastic is everywhere.

    20€

    The Organic Pack - A biodegradable and compostable Iphone shell.

    Once it has reached the end of its life, don't throw it away! Bury it.

  • "Quality charger, fits perfectly in the decor!"

    30€

    Bamboo Pad - 10W induction chargerThis is an all-device compatible, Qi-certified, real bamboo product.

The hazards

Free" returns, after-sales service, defect rates, lost or damaged packages... are so many hazards and requirements for which the customer does not expect to pay. We expect this service from the seller, and of course for free.

Operating costs

An online merchant is subject to a certain number of fees, payment for example, when you pay by credit card or PayPal at an e-merchant, it must pay about 3% of expenses in order to capture your payment on its online store.

Outside its online store, if the product is offered on a marketplace like FNAC or Amazon for example, these costs will be around 15%.

Although there are others, the second cost that comes to mind is the "acquisition" cost. If you have come across the website in question and trusted it, it is not by chance, the e-merchant must have made a profit.edoubling efforts or investments (often both at the same time) so that you can find it. So when he wants to offer a product, the e-tailer must also know how much it will cost him to get people to find it. Very often neglected, it is however one of the most important costs unfortunately.

In summary

Imagine that you buy online a product weighing 2kg at a price of 120€ from an e-tailer, costing him only 30€ to manufacture, here is where your money goes and how this final price can be justified:

  • Production: 30€.
  • Shipping : 12€
  • VAT : 20€
  • Hazards : 5€
  • Seller fees (marketplace) : 18€
  • Advertising : 15€
  • Total: 100€.

For a product invoiced at 120€ and having cost 30€ to produce, in reality the seller hardly earns more than the state or the marketplace. But this can be seen positively! This transaction actually remunerates a whole chain of people, from the manufacturer to the deliverer, through the intermediaries, each actor having brought you value is remunerated for his work. Note that we have not discussed development costs, possible salaries, ecological costs...

We can then think that all the work of the e-tailer is finally to reduce these intermediaries, in order to bring a maximum of value to the final customer and to improve the quality-price ratio... but that would be lacking in consideration for the work of the deliverymen for example, who often deserve to be treated better than they are. We often complain about delivery services, but we don't want to pay for them, on either side. If carriers sometimes seem dysfunctional to us, it's often because we don't realize that their work is also worth paying for, and that they are too often under-valued.

How to choose ?

When you want to make a purchase from an e-tailer, and want to know if the price is right, open your mind.

Look at the delivery methods, are they very efficient? If so, it is likely that the carrier is properly compensated.

If possible, place your order directly on the merchant's website and not on a marketplace, if the e-merchant tries to offer the same price everywhere, it is to the detriment of his share. Other times, the price in direct sales is lower, and the e-tailer will be paid just as much, it's a win-win!

At Bamboo Electronics for example, the bamboo wood keyboard and mouse set is offered at 10€ cheaper on the online shop than on Amazon for example. The brand share remains the same while allowing the customer to pay less.

Keep in mind that your purchases have a real impact on a whole chain of people, and on their lives. So it's your choiceIf you want to pay a delivery price, if you want to pay each actor for his work, it is the buyer who can influence the decisions and not the other way around. Beware of very low prices because they necessarily fail to pay one of the actors at its fair value ... As very high prices, when the distribution of the amount seems unequal between the actors.

In the end, many of us are willing to pay a little more, if the price is right, and properly compensates the chain of people who contributed to it.

Remember that it is our choices, our requirements, that shape the way e-commerce works. It is then advisable for each one to be conscious of the formidable human chain set up so that our order arrives to us, and to choose the brands and the actors who seem to us the best to remunerate all this chain.

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