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8 Products With the Highest Price Markups – How to Avoid Them

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There are some instances in which you can’t help but to pay a premium for a product or service. In fact, paying more sometimes nets you better quality, faster service, or the best care.

But savvy consumers know that you don’t always get what you paid for. Unfortunately, sometimes you get a lot less.

Retailers, manufacturers, and brands are in the business of making money, and if shoppers are willing to pay a premium, they’ll take it. So it’s no surprise that when the market dictates a higher price for certain goods, those manufacturers are going to eke every penny they can, regardless of how much the product costs to make and market. If you want to be a smart shopper, knowing which items are marked up to an astronomical degree can help you avoid making such purchases. Or, better yet, it can help you locate affordable alternatives. Therefore, you might want to steer clear of these pricey items.

Products With High Markups

1. Printer Ink

High Markups Products

If you inwardly groan every time your printer runs out of ink, you know that it’s a double-whammy of inconvenience and cost. My printer takes separate cartridges for each color, which means I usually buy multiple cartridges every time I run out. The worst part is that the cost of ink is routinely more than what I paid for the printer itself.

But that’s actually why the ink is so expensive. Printers regularly sell for a loss, so manufacturers make up that loss by inflating the cost of ink and toner, which you need to buy as long as you own the printer.

The true cost of a gallon of ink is $65,000, based on a price of $16.99 for the standard 3.5 mL regular cartridge size. That’s more expensive than champagne or gasoline. When you think of it in those terms, buying cartridge after cartridge of overpriced ink can drain your bank account and your patience.

Low-Cost Alternative: While you can’t escape the price of new printer ink, you can purchase refilled cartridges online or even from the Costco Photo Center. Refilling old cartridges or purchasing refilled ones is usually much cheaper than buying new. Sites such as 123inkjets and the brick-and-mortar Costco Photo Center sell refilled cartridges for about half the cost of new ones. While the price depends heavily on the brand and type of ink, HP 60 black costs $18 new from a typical office supply store, but is only $9.49 when you refill at Costco.

Another option is to purchase a laser printer instead. While inkjets are the cheapest option on the front end, laser printers require cartridges much less often than their ink counterparts, giving them a lower cost-of-ownership overall. And, when all else fails, you can simply print less: Most of the stuff I print, such as travel confirmations and coupons, can be loaded onto my smartphone instead, saving money and the environment.

2. Bottled Water

Bottled Water Budget

A $2 bottle of water may seem like a relatively low-cost indulgence, but those bottles can add up. According to a report by the Beverage Marketing Corporation, the average American downs 28 gallons of bottled water a year. What might seem like a nominal cost can take a bite out of your budget if you’re not careful.

Another negative issue is the packaging for bottled water. Since most brands use new plastic, petroleum is used to manufacturer that bottle before it gets to you, which drives higher both the financial and environmental costs.

Low-Cost Alternative: Did you know that tap water only costs $0.002 per gallon? When you put it in those terms, bottled water seems like a huge indulgence, especially when you can drink water at home for nearly free.

I love my reusable water bottle. It has a straw, so I’m more likely to sip throughout the day, and I can fill it whenever I like. Before purchasing mine, I was buying a case of 24 water bottles each week. After purchasing a quality $7 reusable bottle, I haven’t bought a single case. Find a reusable bottle, canteen, or cup that you love and swap it out.

If you’re worried about the quality of your tap water, you should know that the EPA regulates public drinking water under the Safe Drinking Water Act, so if you get your tap water from a public source (not a private well), it has been deemed legal for human consumption.

Of course, that doesn’t regulate the taste – some tap water, while safe to drink, might not be palatable. Whether you want to improve the taste or simply want to purify your water before drinking it, you have plenty of options. Water filtration devices like the Brita Faucet System are simple to install and cost only around $30. You can also choose water bottles that actually filter the water before you drink it, such as the CamelBak Groove, which costs about $15.

3. Coffee From a Coffee Shop

Coffee Shop Coffee

Coffee shop coffee comes with a massive price markup, especially when you factor in extra costs (and calories) from add-ins, flavors, syrups, and specialty drinks. If you purchase a large coffee for $4 on your way to work three times each week, you’re paying nearly $600 per year just to have someone else make your coffee for you. That $600 would be a lot more helpful in a savings account, wouldn’t it?

Low-Cost Alternative: You may be addicted to your coffee habit, but as a consumer, you’re the one who holds the power. You can purchase a bag of coffee or a box of tea and brew your own for about $0.06 per cup – plus, you’ll save time over stopping at your favorite cafe and braving the line.

There are some initial investments: A Mr. Coffee coffee brewer costs $20 and up, while a new Keurig single-cup brewer carries a price tag of at least $99. A tea kettle for your stove top costs $10 to $20, while a 34-ounch French press can be found for $20 to $40. And if you’re hooked on espresso, you can expect to pay $60 to $100 for a quality machine.

Even specialty syrups can be easily purchased – you can buy Torani Flavored Syrups from Amazon to whip up your favorite vanilla latte or perfect the caramel macchiato. You may find that making your own coffee and special beverages at home becomes a bit of a hobby.

Despite the upfront costs, the long-term savings (and the convenience) makes it worthwhile. Buy a reusable insulated cup, and you won’t miss your daily visits with the barista.

4. Perfume

Luxury Product Perfume

Because perfume is considered a “luxury product,” you can expect to pay luxury prices. But the ingredients in a typical perfume or cologne aren’t exactly rare – they’re easily-obtained fragrances. What you’re paying for is indulgence more than anything.

Furthermore, perfume brands aren’t just selling a product – they’re selling a lifestyle. That’s why they hire big-name celebrity spokespersons and present advertising campaigns on TV and in magazines. Therefore, a huge portion of your money goes toward marketing – getting Keira Knightley to pose for Dior isn’t exactly cheap.

Low-Cost Alternative: If you really want to splurge, consider acquiring a fragrance that can be your “signature scent.” Instead of buying whichever celebrity-endorsed perfume is hot this season, choose something timeless – for example, I love the classic scent of vanilla. Even if you purchase one pricey bottle of your signature scent, you can wear that to save yourself from overspending on new perfume each season. A typical 50 mL bottle of perfume contains 730 sprays – or enough perfume for about two years, if you spray once every single day – so one pricey bottle of perfume should last you quite some time. One bottle of a signature scent definitely costs less than five bottles of the latest trendy perfumes that you might not wear very often.

Or, better yet, you can make your own – it’s easy to blend scents using a carrier oil like almond oil, along with a few drops of your favorite-smelling essential oil. Try one part lavender and one part orange to six parts almond oil, and store in a sealed bottle. You can purchase essential oils from health food stores and online from Mountain Rose Herbs for about $8 per bottle.

Another option is to purchase scented lotion in place of perfume. It’s often much cheaper, and I find that the scent has real staying power, so I apply less throughout the day.

5. Movie Snacks

Movie Theater Snacks

Anyone who’s ever been to a movie theater can tell you that concession prices are downright ridiculous. When seeing a flick with my kids, the snacks routinely cost more than the tickets themselves. And, since we know there’s not a worldwide popcorn shortage, it can be puzzling to a movie lover who just wants to kick back with a classic snack. But you’re not really paying for popcorn – you’re helping the movie theater pay for each of the movies they purchase the rights to show.

In fact, according to research by the Stanford Graduate School of Business, concessions may only make up 20% of theater gross revenue, but they account for 40% of profits. That’s because movie theaters share ticket sale profits with the movie distributors, but concession profits go straight into the individual theater’s pockets.

Movie theaters are basically in the business of secondary products. You don’t go to a theater specifically for the popcorn and soda, but that’s what you’ll end up spending most of your money on.

Low-Cost Alternative: You have a lot of choices when it comes to skipping the cost of movie theater snacks. You could eat beforehand and avoid snacking altogether, or opt for kids-size snacks when you have a craving for popcorn. For example, at my local theater, I can pay $3 and score a small popcorn, small drink, and candy without blowing my budget or my diet.

6. Diamond Engagement Rings

Diamond Engagement Rings

The markup price on diamonds is incredibly high, mostly because of simple demand. You can blame diamond giant De Beers, which is the company that came up with the “two months’ salary” guideline for engagement rings in the 1950s, increasing the average price of diamonds based on marketing alone.

While once quoted as a 100% markup, today’s diamonds are marked up anywhere from 20% to 40%, according to Forbes, thanks to online retailers like Blue Nile and James Allen driving down prices. Still, a name-brand diamond (such as Tiffany’s) can be marked up to a whopping 400%, and the average American diamond engagement ring costs $4,000 – money that might be better spent on the down payment for a house.

Low-Cost Alternative: The only reason diamonds are so desirable is because a diamond brand says that it’s desirable. However, there’s currently a huge trend toward alternative engagement ring gemstones, including vintage gems and lab-created diamonds (lab-created diamonds have the same physical properties of mined diamonds, but cost 20% to 30% less). Some even skip the diamond engagement ring altogether for a smaller, plainer band. Research your options and determine whether the tradition is really worth the price.

7. Name-Brand Prescription Drugs

Name Brand Prescription Drugs

Drugs are big money – just turn on the TV and you’re hit with a barrage of ads for the latest prescription-only medicines that promise to cure what ails you. But name-brand prescriptions have massive markups to pay for marketing, sales commissions, and development. Take the antidepressant Prozac, for example: It costs $136 per bottle, while the generic version of the same medicine, fluozetine HCL, costs $3. That’s a markup of 4,451% on the same product, just with a different label.

Low-Cost Alternative: Some doctors reflexively prescribe name-brand drugs because first, they’ve been sold on its purpose by pharmaceutical sales representatives, and second, because they assume insurance will pick up the tab. But if you have a high prescription deductible, always ask your doctor for the generic version of a drug, as many pharmacies now offer generic prescriptions for $3 to $10.

I take the generic form of Imirtex for migraines. Imitrex is around $130 a bottle, but generic sumatriptan costs only $10 a bottle.

8. Text Messages

Text Messages Costs

If unlimited texting is not part of your cell phone plan, you could pay as much as $0.20 per message. This isn’t a big deal – until you get into a back-and-forth conversation with a friend or work colleague. But a text message only costs the cell service providers $0.0033 each, which means they’re earning a tidy 5,960% markup.

Low-Cost Alternative: Switching your plan to unlimited texts might make the most sense if you find yourself constantly paying an excessive fee for individual texts. Paying an extra flat-rate fee of $5 to $10 per month could be a lot less than paying for individual messages, so call and ask your cell service provider.

Personally, I try to use data-based messaging as much as possible. If you have an iPhone, iMessage doesn’t count toward your message allowance (whether using WiFi or not), but if you are texting someone without iMessage, try using an app for free texting. I use Line for group chats with my far-off family members, while WhatsApp and WeChat are favorites for free texting. All three work on both data and WiFi, and never count toward your monthly text limit.

Final Word

Be smart about your purchases and find out what you’re really paying for, or your dollars could be going toward fancy marketing campaigns or premium markups. By examining some of your most common purchases and looking for lower-cost alternatives, you could easily save hundreds of dollars each year. It just goes to prove that more thoughtful spending can go a long way in helping you get the most bang for your buck.

How do you save money on common purchases?

Jacqueline Curtis
Jacqueline Curtis is an experienced style expert, and she focuses on getting high fashion on a tight budget. She writes for several online publications and specializes in fashion, finance, health and fitness, and parenting. Jae grew up in Toronto, Canada, but now resides in Utah with her husband, two kids, and prized shoe collection.

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