Like for example if it is like a tech company like maybe HP, DELL, ASUS, ACER and they make laptops cheaper then how do they make money because they lower the price of their computers
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A few things at play here. Number one is buying power. These large manufacturers buy some many components that they pay much less than the average wholesale price. They also have “proprietary” components that may use a lesser material to make it more affordable. An example would be motherboards in a Dell or HP – they are notoriously difficult to upgrade because they are proprietary and don’t have room for much else.
The second thing they have going for them is volume of sales. They sell such a large number of products that they are able to take less margin and still turn a profit. Walmart is a perfect example of this.
Lastly, you should see a theme here, is scale of production. They produce so many of the same or similar things that they can take advantage of efficiencies in mass production. Think of a smaller boutique manufacturer, their price is usually a little higher because they are hand made to order products – a feature they try to sell you on. Someone like Dell or HP has thousands of the same laptop sitting in a box ready to be shipped out.
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