Example: one bottle of water is like $2 but a whole pack of 24 is like $8. Isn’t the company losing money by charging less for more resources/labor & packaging?
In: 8
There’s two things going on here that result in lower costs when you buy something in bulk.
First, the cost of creating/selling those goods is actually lower (this is called [economies of scale](https://en.wikipedia.org/wiki/Economies_of_scale)). Just at a retail store alone it’s faster to stock a bulk good. One person can place that 24-pack is about the same time it takes to stock a single individual bottle, and there’s a lot less adjusting the stock to bring bottles to the front of the shelf. Additionally it’s faster for a cashier to ring up a single 24 pack than 24 individual single bottles (especially if they are spread out)
Second, guaranteed income. If you only buy a single bottle of water they only make $2 off of you and might never make any more money. But if you buy that 24-pack they at least made $8 of you.
These efficiencies and guarantees run all the way down the supply chain. It’s cheaper for retail stores to buy bulk packs for basically the same reasons. And it’s cheaper for the shipping company to ship them, etc. etc.
Latest Answers