#39 - Why do things cost what they do?

I am visiting some friends and they asked for some computer help. The idea was to hook up their printer/scanner/fax to the PC. They have been using it just as a fax machine. Oh and they couldn't find the driver CD. Ok no problem, I can download the driver since they have Broadband Internet. AND they don't seem to have a printer cable. Also no problem. I didn't bring one with me, but almost every store should have a USB printer cable.

So off I go shopping for computer equipment. Now, recall I have a PC business so I don't usually shop in stores for computer stuff. A nearby Office Max seemed to be the ideal solution. So I go in and get directed to the USB printer cable section. There I see a few cables, not a lot of choices. In fact there is only one USB printer cable with 10 feet length (what I need). And then I suffered sticker shock. The cable was $32.99. Oh my goodness! I sell that very same cable (Belkin) for $9.00. What is going on here? I talked with one of the dudes in a Office Max vest (Why do all the mega stores put their employees in vests? Hmmm) and ask if there are any other cables available. The only other item was a cable 6 feet long for $19.99. That wasn't long enough. I made a snap decision and walked out of Office Max.

I looked around and the only store that might have a cable was Target. I ran over there and was directed to the Electronics section. In the back of the huge store of course! But low and behold I find the exact same cable for $14.99. Now we are talking. I go to the checkout and viola it rings up at $17.99. I tell the check out person (in a Target Vest!) "Hey this was marked $14.99 on the shelf in the back of the store!" So I'm thinking this is going to be a hassle. But the check out person calls for a manager and the young lady (23 year old max). Looks at me and says "ring it up like he says". I dash out of the store as quick as I can.

So is that 10 foot cable really worth $32.99? Do people really pay that much for a cable? Should I increase my prices? I make a good % on the cable at $9.00. I remember the old days of PCs (the 80s) when you could get good margins on PC products, but those days are long gone. If you make 10% on a sale you are doing good. Amazing.