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> CocaCola net profit margin as of March 31, 2023 is 22.69%. Which means that it costs them $1 to produce every $1.23 of soda that you purchase. This is a long

> CocaCola net profit margin as of March 31, 2023 is 22.69%. Which means that it costs them $1 to produce every $1.23 of soda that you purchase. This is a long-shot from being "nearly free" as you claimed earlier, and materially different from "asking for money in exchange for nothing".

lostlogin 3y ago
I’d like to know what it costs if you remove advertising and any other cost that doesn’t directly contribute to getting sugar water into the bottle.
amatecha 3y ago
It doesn't actually though. Like someone else mentioned, they spend an untold amount of money on advertising. Like $4 billion in 2022, aka 10% of their revenue. https://www.statista.com/statistics/286526/coca-cola-advertising-spending-worldwide/ https://www.statista.com/statistics/286526/coca-cola-adverti... That's not a cost to produce their product, or even ship it, or store it. That's strictly just "buying more customers", which has no bearing on my initial claim - that soda is extremely cheap to produce.
- greatwave1 3y ago
  Well if you want to ignore things like advertising and other administrative expenses (which are necessary when running a global beverage company), you will still find that their Costs of Goods Sold is 40% of their revenue: https://investors.coca-colacompany.com/filings-reports/all-sec-filings/content/0000021344-23-000024/0000021344-23-000024.pdf https://investors.coca-colacompany.com/filings-reports/all-s... Again, materially different from asking for money in exchange for nothing.
giantrobot 3y ago
> Which means that it costs them $1 to produce every $1.23 of soda that you purchase. That's not correct. The $1.23 you pay at the store includes wholeseller/distributor and retailer margins. The wholesale price of that soda is maybe a quarter of the retail price. So for Coca Cola the bottle the production cost and shipment to a distributor was less than 20% of the retail price.

lostlogin 3y ago

I’d like to know what it costs if you remove advertising and any other cost that doesn’t directly contribute to getting sugar water into the bottle.

amatecha 3y ago

It doesn't actually though. Like someone else mentioned, they spend an untold amount of money on advertising. Like $4 billion in 2022, aka 10% of their revenue. https://www.statista.com/statistics/286526/coca-cola-advertising-spending-worldwide/ https://www.statista.com/statistics/286526/coca-cola-adverti... That's not a cost to produce their product, or even ship it, or store it. That's strictly just "buying more customers", which has no bearing on my initial claim - that soda is extremely cheap to produce.

greatwave1 3y ago
Well if you want to ignore things like advertising and other administrative expenses (which are necessary when running a global beverage company), you will still find that their Costs of Goods Sold is 40% of their revenue: https://investors.coca-colacompany.com/filings-reports/all-sec-filings/content/0000021344-23-000024/0000021344-23-000024.pdf https://investors.coca-colacompany.com/filings-reports/all-s... Again, materially different from asking for money in exchange for nothing.

giantrobot 3y ago

> Which means that it costs them $1 to produce every $1.23 of soda that you purchase. That's not correct. The $1.23 you pay at the store includes wholeseller/distributor and retailer margins. The wholesale price of that soda is maybe a quarter of the retail price. So for Coca Cola the bottle the production cost and shipment to a distributor was less than 20% of the retail price.