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> But I think if you discount by 50% or so you'll be pretty close Look, a metric ton of sugar wholesale costs about $250. When you buy it in 1kg bags in superm

by Udik 6y ago

> But I think if you discount by 50% or so you'll be pretty close Look, a metric ton of sugar wholesale costs about $250. When you buy it in 1kg bags in supermarkets, with an extremely streamlined and risk free distribution chain, it already costs about four times that price. Imagine how much would the markup be if it were sold by the gram (typical purchase a few grams), by random people on the streets, with a huge personal risk and maybe even cut with other substances to add mass, after having passed through three or four intermediaries. The retail price is probably x1000 the price of the shipping container.

jacquesm 6y ago
There is a bit of a difference between a KG of sugar which is sold 'as is' vs a kilogram of pure Cocaine which will never reach the end user in that state. So on a KG of sugar those costs are a large fraction, on a KG of coke they are a very small fraction. The markup is so large because the market is happy to bear it and the risk of getting caught goes up as more people are involved which will typically happen near the edge. Drug lords are rarely captured, their minions more frequently and street dealers more frequently still. The street price reflects that and simple economics: competition in drugs sales is fierce, fierce enough to kill for. If they could sell it for more they definitely would. Ironically, the better the authorities get at seizing shipments the higher the street price will be compensating the drug syndicates to some extent for their seized cargo. > The retail price is probably x1000 the price of the shipping container. You're off by a factor of about 100.
- Udik 6y ago
  It seems we agree. But then I don't understand why you said in you previous comment that > The street value is the only value they could possibly quote with some accuracy and > But I think if you discount by 50% or so you'll be pretty close When simple sugar is already sold by the kg with a 400% markup. > You're off by a factor of about 100. Sounds like you know what you're talking about :) But in which direction?

by Udik 6y ago

jacquesm 6y ago

There is a bit of a difference between a KG of sugar which is sold 'as is' vs a kilogram of pure Cocaine which will never reach the end user in that state. So on a KG of sugar those costs are a large fraction, on a KG of coke they are a very small fraction. The markup is so large because the market is happy to bear it and the risk of getting caught goes up as more people are involved which will typically happen near the edge. Drug lords are rarely captured, their minions more frequently and street dealers more frequently still. The street price reflects that and simple economics: competition in drugs sales is fierce, fierce enough to kill for. If they could sell it for more they definitely would. Ironically, the better the authorities get at seizing shipments the higher the street price will be compensating the drug syndicates to some extent for their seized cargo. > The retail price is probably x1000 the price of the shipping container. You're off by a factor of about 100.

Udik 6y ago
It seems we agree. But then I don't understand why you said in you previous comment that > The street value is the only value they could possibly quote with some accuracy and > But I think if you discount by 50% or so you'll be pretty close When simple sugar is already sold by the kg with a 400% markup. > You're off by a factor of about 100. Sounds like you know what you're talking about :) But in which direction?