After Budget 2013, the next biggest entertainment everybody is waiting for is perhaps the annual Auditor-General’s Report, which was deliberately delayed by the Malaysian Government for obvious reason. First of all, the two weeks delay in releasing the highly-anticipated report was to prevent opposition from embarrassing Najib administration since the audit report will reveal tons of overspending and potential scandal such as the infamous RM250 million CowGate Scandal. Secondly, it was hope that the audit report can be “modified” in order to minimize potential damages. Another scandal will be disastrous to the current regime.
Will we see another round of entertainment similar to previous staggering mark-ups in procurement such as a RM42,320 laptop, a RM224 screwdriver set, a RM5,700 car jack, a RM8,254 digital camera or a four-year RM262,256 maintenance cost for a Perdana – of taxpayers’ money? Whether you realize it or not, according to research, mark-ups happen everywhere. Let’s take a look at some of the mark-up examples:
Produce is often marked up as much as 75%. Some season fruits such as imported Kiwi varies in their pricing and mark-up. Some importers deliberately release limited supply into the market in order to mark-up the prices – 4 pieces Kiwi Gold could cost you RM12 but if you care to play waiting game, chances are you can get the same number of Kiwi for RM8, weeks later.
Ever heard that the best business to do is women-related business? The average mark-up on cosmetics is around 78% (percent). Considering most cosmetics are made from various combinations of dirt, waste cooking oil, wax, chicken bone marrow, fish scales, fragrance, urine and even bull semen (*whoa*), you may be wondering why shoppers do not think twice about spending thousands on cosmetics. I supposed women are willing to rob banks as long as they can look younger and beautiful.
3) Furniture and Mattresses
If you do not already know, most furniture stores normally mark-up their inventories by 80% – 100%. That’s one of the reasons why you can see sales all year round on furniture and mattresses. Branded furniture’s mark-up is even higher so when they advertise about up to 80% sales, chances are they’re still making handsome margin even though it sounds like they’re doing you a great favour.
Mention flowers and the first thing that comes to mind is Valentine. But buying flowers during such time could be the worst thing to do, with some charging RM10 per stalk of red roses. It could skyrocket to RM120 for 5 stalks with the salesgirl justifying that the flowers actually air flown directly from overseas.
5) College Textbooks
It’s an open secret that most bookstores enjoy cool profit due to monster mark-ups. In a country that doesn’t produce much intellectual books and have to rely on import, the mark-up is even insane, so much so that readers were thinking twice about purchasing a book costing hundreds of ringgit. That was why prime minister such as Najib Razak gave away book vouchers to students, although in this case the main objective was to fish for votes. Nevertheless bookstores normally jacked up more than 100% mark-up on books.
6) Greeting Cards
If you think selling books was cool because of the 100% mark-up, wait till you hear how much greeting cards were being marked up. Average greeting cards normally have a mark-up tag of over 200% and if the card carries brands such as “Hallmark Holidays”, the mark-up is even higher. Of course you can always search and download cool greeting cards and print it over colour printer using quality paper. This way you can save tons of money.
7) Bakery Products
Depending on location the mark-up on bakery goods ranges anywhere from 100% to 200%, or even more. Of course you can always bake your own version at home but if the inconvenience is too much to bear, just pay for the mark-up. If you care to scout around, some bakery shops actually throw away near-expiration bakery products at 50%. Even at this mouth-watering discount, the bakery owners actually break-even.
8) Designer Jeans
While it costs only about US$50 to make True Religion’s best-selling jeans, Super T Jeans, the wholesale price reaches US$152 and the average retail price is inflated to a whopping US$335. A US$665 price tag on Gucci jeans and US$225 for Sevens can still sell like hot cakes – all in the name of premium denim. Designers and retailers say the typical retail mark-up on all fashion items, including jeans, ranges from 2.2 to 2.6 times cost.
Another women product, handbags, can be very expensive especially if the production is limited and used by celebrities. If money is the least worry in your mind, The House of Mouawad in Dubai can make you a US3.8 million purse that’s decorated with 4,000 colourless diamonds. And who can forget the Hermes Birkin bags that can fetch as much as US$1.9 million a piece, which happens to be PM Najib’s wife, Rosmah’s favourite. According to a poll, women own an average of 10 handbags and would not think twice about spending about $150 on a handbag.
10) Coffee and Tea
A cup of Starbucks Latte could give you a false sense of living in luxury. However considering such little luxuries actually comes with a 300% mark-up price tag, you may want to think about visiting the store too frequent. This mark-up does not stop at Starbucks but also applicable to other premium outlets such as Chatime, Coffee Bean etc.
11) Hotel Minibars
Listen to mommy and daddy – unless you do not mind paying inflated snacks or drinks with 400% mark-up, do not even try to explore what’s inside your room’s minibar. If you fancy Snickers or Coke, do yourself a favour by moving your fat and lazy arse out of the room and explore some convenience stores, normally located quite near your hotel.
12) Wine or Champagne
Unless it’s a special occasion where you must spend to prove yourself, try not to order any wine or champagne at restaurants. It’s normal for them to mark-up such items as much as 400%. If you really fancy wines, go and find distributor house which could give you great offer if you buy in bulk.
Again, depending on where you’re dining out, you could potentially paying 300% to 600% for a glass of Coke. You may skip and opt for water but while water may be free many moons ago, now restaurant is finding it equally profitable by charging for water as well.
14) Eyeglasses / Spectacles Frames
Just like watches, people like to show off their branded glasses. The lenses could be expensive, depending on how screw up your eyesight was, but the frame could be the most expensive part especially when you fancy branded Armani frames. Such branded frames could be marked up by up to 1,000%, no kidding.
Retail jewellers mark up diamond engagement rings by 100% up to a mind-boggling 1,000%. While the mark-up guidelines are broad or rather vague – anything from 50% to 400% is normal. Of course when we talk about diamonds, one particular case study that comes to our mind was the allegation of the wife of Malaysian Prime Minister Najib owning a RM24.4 million diamond ring, which turned into a scandal. Fortunately the highly intelligent self-proclaimed First Lady of Malaysia revealed her biggest secret – she’s been saving ever since she was a little girl. In her case, nobody knows the mark-up of her favourite diamond ring though.
16) Cinema’s Popcorn
Most theatres prohibit moviegoers from bringing in outside food and drinks, for a good reason. Popcorn sold at theatres or Cineplex actually has been marked up a staggering 1,275%. Needless to say, soda or carbonated drinks sold has an unusual mark-up percentage. However, not many people complains because it could spoil the mood, not to mention the possibility of losing face and laughed at for not being able to afford popcorn.
17) Prescription Drugs
High prices of drugs are one of the factors contributing to escalating healthcare sector. The next time you visit your nearest pharmacy or hospital, chances are high you’re paying 200% to 3,000% of drugs prescribed. In fact, drugs mark-up was so serious that Arizona’s Attorney General, Tom Horne, is suing US largest drug wholesaler, McKesson Corp., for artificially inflating the prices of hundreds of brand-name prescription drugs such as Allegra, Celebrex, Coumadin, Flonase, Lipitor and Valium. McKesson, which distributes pharmaceuticals to retailers including Albertson’s, Costco, Safeway, Target, Wal-Mart and Walgreens was allegedly made US$100 million on a 5% markup of the drug Nexium alone.
18) Bottled Water
There was a time when country such as Malaysia sells bottled water at such an inflated price that it was more expensive than Middle East countries. Believe it or not, some sell bottled water at a mark-up of a staggering 4,000%, making you wanna drink (cheaper) gasoline instead (*grin*). Nowadays, water filtration system is so affordable that you shouldn’t let those parasites suck your hard-earned money.
19) SMS, Short Message Service
As much as smartphones are flourishing, the traditional SMS is not dead yet. At 20 cents a SMS, the telco could make as much as (drum please) 6,000% profit. If you’ve 3G plan, use Viber, LINE, WeChat and whatnot to chat (sort of like SMS) instead. Do yourself a favour – stop sending telco laughing all the way to the bank.
While mark-up happens almost everywhere, you can avoid being a sucker if you’re aware of the excessive profiteering. Either you boycott the products or merchants, or simply take cheaper alternatives in accessing the goods or services. Of course you may argue that some products especially drugs or medicine cost an arm and a leg because of the huge amount of investment inR&D (research and development), not to mention the cost in marketing, rental, human resources, loans and whatnot. But there’re circumstances where you can’t do anything about it because your money in the form oftaxpayer’s money were used by incompetent government agencies in purchasing mind-boggling mark-up products.