I just had a most interesting discussion.
The topic of this discussion was the prices of cans of cola cola in vending machines. Particularly, in different places.
Consider the following statements:
-My dad's place of business has two Coca Cola vending machines. He pays 0,60 euro for a half-liter bottle [0.5 l]
-At my school, we have something like a dozen machines, I pay 0,80 euro for a can of Coca Cola [0,33 l]
-At the local train station, and indeed, most train stations in Holland, you pay 1,50 for that same can of Coca Cola [0,33 l]
I would like to put up a disclaimer that I am in no way an expert, but I guesstimate that the total cost of making the cola, putting it in a can and/or bottle, distributing it, putting it into a vending machine and selling it, is far less then the 80 cents I pay for it at school, and certainly less then the 1,50 I pay for one at the train station, since it's exactly the same can and the same vending machine.
So why is a can more expensive at the train station? And why do I pay more for my can then my father pays for his half-liter at work?
Let's assume the following statements are true:
-If the price is cut in half, we sell exactly twice the amount of cans.
-Because we sell twice as many cans, we have to refill the machine at least twice as much.
Now, I know they can still make a profit if they sell cans at 80 cents. My school certainly does. So, why cant a train station? Is it because they have a monopoly? Psychological reasons? Or just because they can get away with it?
Lets assume we sell twice as many cans at 80 cents. But we have more costs because of the refills. Now, some of these costs are already covered by the 80 cents, but we add another 10 cents to cover additional costs of the refills.
At 90 cents, we still sell twice as many cans. We should make the same profit as we do when we sell our cans at 1,50 Twice as many people are now buying our product, and because we are cheaper then others [pepsi, fanta etc] we create a very loyal customer base.
So, why the hell don't we? Why can't I get a can of coke for less then 1,50 at a train station? What's the deal with that?
Increased volume of sales means more refills.. so instead of a van, we now send them a big truck full of cans, so the costs will actually be lower PER CAN then if we moved small volumes.
I just don't get it. Maybe I'm too logical.
