Why does water get cheaper as its volume gets larger?

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Why does water get cheaper as its volume gets larger?

In: Economics

It’s a sells tactic. Buying in bulk is cheaper than buying in smaller quantities because it costs the producers and suppliers less to sell them that way. Risk, wastage and labour costs all go down if you’re producing, distributing and selling in bulk or large quantities.

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Once you have the extraction & treatment (and distribution or bottling) infrastructure in place, it’s more or less as easy to sell 500 L as it is 500,000 L. It is known as economy of scale. The kinds of people – companies – who would buy 500,000 L will look for a discount or volume price for that much business. This way it’s worth their effort

Do you mean why is a bottle of water at a convenience store cheaper than a gallon at the grocery store? Or is there another thing?

Small bottles of water at a 7-11 are expensive because you’re paying for the convenience. Sometimes you don’t want to carry around a big jug, and this water is prepacked, cold, fits in a cupholder, and ready to drink. So stores mark up the price. Buying gallons is something you would normally do on a grocery shopping trip, where customers are more likely to comparison shop between different stores. So the price is driven down by competition.

Utility water is the cheapest because you don’t need to package and ship it. The pipes are already in the ground, and infrastructure maintenance costs are relatively low compared to the cost of plastic bottles and shipping over land.