How Do They Make It To Retail For This Price?

[PeteG]

£26.99 for a storage bench and it comes with a three year warranty! The materials would cost more wouldn't they? I'm gobsmacked!

http://www.lidl.co.uk/en/our-offers-249 ... l&id=25801

 

[sitefive]

would probably cost less than 10quid in materials/labor to make in eastern europe/germany where its imported from.

 

[CHJ]

Large batch production has vast reductions in production costs.
Machine set up and tool selection costs are the same whether you make 10 or 1000.

Even spray painting finish for instance, paint one, clean up gun.
Paint fifty, clean up gun.

Even a modern car leaves the factory with a production cost of about 1/3rd of the retail showroom price.

add 20% for wholesale price.

add another 25% for retail price.

But life determines it's a sensible model, reduce any of the mark-ups significantly without very tight control of overheads and sooner or later the business collapses.


Companies like Lidl and Primark thrive on the strict control of the latter retail mark up costs.

 

[Rhossydd]

Companies like Lidl and Primark thrive on the strict control of the latter retail mark up costs.

In the case of Lidl and Aldi they also use some items as loss leaders to just get people into the store. Many of their power tools must come into this category.