The $0.01 savings is for the maker, and not for the buyer. For a typical cable, it's probably around $0.30 to $0.50 to make, and they tend to sell between $5 a

The $0.01 savings is for the maker, and not for the buyer. For a typical cable, it's probably around $0.30 to $0.50 to make, and they tend to sell between $5 and $15, depending on the spec. For simplicity's sake, we'll assume $0.50 cables that sell for $10. Now, if you save $0.01 in manufacturing, so the cost is now $0.49, and if you sell say 100k cables (feels like a believable amount) then you've saved a cool $1000 in making them. So your profits are $1000 larger now, and you can pat yourself on the back. Good job! The kicker then is how those profits can be used to make MORE cables. And $1000 of extra profits means $1000 of extra cables. Just over 2000 more, in fact, which you can also sell for $10 each. Those extra 2000 cables have now earned you a cool $20k of profit ALONE, from only $1000 saved dollars, which itself was from only a single saved cent! Amazing job! If you keep repeating this, you can probably start to see how this begins to run away: Even starting with only $1 to make $0.49 cables, you end up earning over $1M on your 19th batch, even if you were spending only 10% of your sales to make new batches of cables and pocketing the other 90%! You actually pocket $1.5M on that batch, and then only spend $167k on the next batch, which promises to earn you even more! Meanwhile, your competitor making $0.50 cables, starting with a similar $1 and 10% to new batches scheme, would only get to pocket $1.1M on their 19th batch! That $400k is a pretty tidy bonus you've earned. On your 20th batch, you're selling 80k cables, but your competitor can only afford to sell $60k. We've not even reached the 100k a batch mark, let alone a million cables, and you're already way ahead. And that's compound interest, folks! From $1, saving only a single cent, we can earn $400k more than we would have otherwise. Outstanding. EDIT: I took so long to write this that I see andrewstuart2 has summed up the first half of the story far more concisely than I. Nicely done! I feel that compound interest is important for seeing the bigger picture of profit over time, so I'll keep this comment as is.