3 ms·

But it's profitable to sell sandwiches at $6 - that's the whole point.

by iopq 10y ago

mc32 10y ago
It's only profitable to sell $6 sandwiches if... 1. you use unpaid labor (family) or 2 you have 1,000+ franchisees. If you are low volume, you're gonna have to sell at $8 - $10 to make something worthwhile. Now, I get it, they are unquestionably overcharging for this drug and delivery system. I just don't think you can say that since I can make something at the rock bottom price of $x that someone else should be able to make a living (or run a pharma corp.) by selling at a similar price. The sweet spot is somewhere between $30 and $300, where it is is probably closer to $100.
- iopq 10y ago
  If you have 10 customers an hour on average and you pay some guy $10 an hour to make 10 sandwiches, then your costs at $4 per sandwich. That means you have 33% headroom to pay rent for your business, which is better than what McDonald's has. McDonald's has decent pricing because they shoot for like 28% and a lot of volume (much more than 10 customers an hour and probably more hours than your business). A soda machine is basically free money because syrup and water cost pennies. The cup is the most expensive thing you give to the customer for his $1.99 soda.
  - mc32 10y ago
    It's rent, opportunity cost, insurance, litigation, brand awareness, promotions, etc. Sure a McD can operate at that level because they have efficiencies and have bargaining power and arbitrage. A standalone shop doesn't stand a chance of being economically viable for an independent owner --you don't want a pharma which barely scrapes by. You want healthy ones but not ones which are willing to unjustly take advantage of their customers/patients. Anyway, my main point was that ingredient cost is only one part of the cost of making/delivering something. IIRC, restaurants aim for foodstuffs to amount to 30% or less of sales to be viable.
    - iopq 10y ago
      Well, yeah, a restaurant can buy more ingredients at a time which makes it cheaper since they get a bulk discount. While you pay $3 for that sandwich, the restaurant only pays $1.50. If the DIY EpiPen costs you $30, then a factory probably churn one out for $15.
      - mc32 10y ago
        So if we're applying restaurant maths to this they might be okay charging $45 or double it to $90 for their proprietary delivery system?
        iopq 10y ago
        Let's just say some number between $50 and $100 is what a company would charge for it. Someone said the old price was $57, which is right about where our back of the napkin math put it.
      - ascorbic 10y ago
        The cost of this project includes $28 for buying the insulin autoinjector at retail. There is no way it costs $30 to manufacture. I'd be amazed if they cost $5. Injection moulded plastic is extremely cheap once you've made the moulds.

But it's profitable to sell sandwiches at $6 - that's the whole point.

by iopq 10y ago

But it's profitable to sell sandwiches at $6 - that's the whole point.

mc32 10y ago

It's only profitable to sell $6 sandwiches if... 1. you use unpaid labor (family) or 2 you have 1,000+ franchisees. If you are low volume, you're gonna have to sell at $8 - $10 to make something worthwhile. Now, I get it, they are unquestionably overcharging for this drug and delivery system. I just don't think you can say that since I can make something at the rock bottom price of $x that someone else should be able to make a living (or run a pharma corp.) by selling at a similar price. The sweet spot is somewhere between $30 and $300, where it is is probably closer to $100.

iopq 10y ago
If you have 10 customers an hour on average and you pay some guy $10 an hour to make 10 sandwiches, then your costs at $4 per sandwich. That means you have 33% headroom to pay rent for your business, which is better than what McDonald's has. McDonald's has decent pricing because they shoot for like 28% and a lot of volume (much more than 10 customers an hour and probably more hours than your business). A soda machine is basically free money because syrup and water cost pennies. The cup is the most expensive thing you give to the customer for his $1.99 soda.
- mc32 10y ago
  It's rent, opportunity cost, insurance, litigation, brand awareness, promotions, etc. Sure a McD can operate at that level because they have efficiencies and have bargaining power and arbitrage. A standalone shop doesn't stand a chance of being economically viable for an independent owner --you don't want a pharma which barely scrapes by. You want healthy ones but not ones which are willing to unjustly take advantage of their customers/patients. Anyway, my main point was that ingredient cost is only one part of the cost of making/delivering something. IIRC, restaurants aim for foodstuffs to amount to 30% or less of sales to be viable.
  - iopq 10y ago
    Well, yeah, a restaurant can buy more ingredients at a time which makes it cheaper since they get a bulk discount. While you pay $3 for that sandwich, the restaurant only pays $1.50. If the DIY EpiPen costs you $30, then a factory probably churn one out for $15.
    - mc32 10y ago
      So if we're applying restaurant maths to this they might be okay charging $45 or double it to $90 for their proprietary delivery system?
      - iopq 10y ago
        Let's just say some number between $50 and $100 is what a company would charge for it. Someone said the old price was $57, which is right about where our back of the napkin math put it.
    - ascorbic 10y ago
      The cost of this project includes $28 for buying the insulin autoinjector at retail. There is no way it costs $30 to manufacture. I'd be amazed if they cost $5. Injection moulded plastic is extremely cheap once you've made the moulds.