How the prices of products change.

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Yesterday i visited a place where different types international products are imported and distributed nationwide. Often they are selling products as wholesale on a very less price which we get to see at our local shops.
I was perplexed on seeing the price difference from here to there. Later my friend explained that easily and i got the idea why there was so much of difference between the prices here and there.

When the products get out from here on a wholesale price then there falls a transportation cost on that, after that it goes to shops where is included extra costs like the shops rent, electricity bills,workers cost,shopkeepers profit etc. If we sum up all the costs and distribute those on the products then the prices are sure to rise. Because he is doing business he must calculate all the costs and profit and make them out from here. That's why the price seems to be higher from the importer place to the local shop.

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Actually it was very easy to catch but it slipped out of mind then and now i thought of sharing this with you guys. On every product we buy there remains so many costs behind it. From its materials to production costs, transportation to electricity bills, workers monthly payment to shopkeepers profit all of these works behind the mrp price of the products which we usually buy.

Let me give you am example which was very easy for me to catch.

Suppose you bought a cow for 400$ and started to take care of that for future sell. You kept that to you for one year and within this period of time it needed a shelter which costed you, it needed for food to grow which costed you too even it may have needed a extra person who looked after it and you paid him too. So after all this will be going to seel that in the price by which you bought? Will you sell it for 400$? No,never you will doing. If so you are going to be in loss. You are going to sell it in a lot higher then this price. That's how these works in real life.

In those wholesale businesses they said that if they daily can ship 1000 product and even if they get profit of 1 usd then it comes to 1000 usd. The initial 1 usd profit may seems to be very less but look how the do the math. Their profit isn’t about just 1 usd on 1 products they do the math for huge number of products and that's how their business is done. Pretty impressive to me. At last i got a clear idea how these works hope you too got something from this one.

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