So lets make it simpler. Coke spends more on marketing than it does production. Does this make coke more expensive for the average joe? No it makes it cheaper. Why? Because they can sell more coke, and selling larger quantities of things can mean better pricing by either production scale or better deals on ingredients. Back to Costco, samples are a rounding error level of cost for massive gains in sales.
And where did the money come from in the first place? I get that advertising increases sales (literally why anyone would do samples), but it’s not like that money isn’t from previous sales.
Efficiency, its not a closed ecosystem. The world is not static like an econ 101 textbook question. There is so many factors like credits, seasonal pushes during peak supply, producers offers for floor space. A lot of factors go into pricing a product, the amount sampling is not really one of them, thats just to push sales and is done at a completely different level of management.
So lets make it simpler. Coke spends more on marketing than it does production. Does this make coke more expensive for the average joe? No it makes it cheaper. Why? Because they can sell more coke, and selling larger quantities of things can mean better pricing by either production scale or better deals on ingredients. Back to Costco, samples are a rounding error level of cost for massive gains in sales.
And where did the money come from in the first place? I get that advertising increases sales (literally why anyone would do samples), but it’s not like that money isn’t from previous sales.
Efficiency, its not a closed ecosystem. The world is not static like an econ 101 textbook question. There is so many factors like credits, seasonal pushes during peak supply, producers offers for floor space. A lot of factors go into pricing a product, the amount sampling is not really one of them, thats just to push sales and is done at a completely different level of management.