How much does it cost the manufacturer to make something?

Answer 1

It really does depend. It could cost anywhere from a small fraction of the price to actually more than the price you buy it at.

A good example of the former is Pens. It takes the manufactuerer on average one cent to 10 cents to make a pen, and they can sell for anywhere from 50 cents to 15.00, not including really expensive models.

A good example of the latter is the Xbox and PS3. Back when the Xbox first came out, it costed them about $540 to make one, but to be competitive, they had to sell them at $300-400 (the PS2 cost about $150 to make, and sold for 300). I do believe the PS3 is still selling at a loss, but I could be wrong on that. I know it sold at a loss when it first came out.

So, where does that extra money go or come from? Well, in the case of pens, the rest of your money goes to transporting from the manufacturer and paying the store you bought it from. Also, don't forget about those nifty packages they come in.

And how did Microsoft and sony make up their losses? Game sells. They made game companies pay them anywhere from 10-20% of their sales, just for "liscencing fees". This generally is about $10 off a $60 game that goes back to either Microsoft or Sony.