I’m deciding between ordering a medium or large “coffee” drink, and low and behold, a large is _just_ $0.40 more! Seems like everything being sold has an “upsell.” Might as well “go large” since it’s just a few cents more, right? Well, I was kind of curious as to who really wins when you upgrade, so I decided to break it down…sort of. Because the numbers used aren’t “real,” but hey…It’s a start.
Let’s take a combo from the burger joint called, HAHDSASHDHSADK. Their regular sized alpha combo is $3.99, and it includes all the standards, cheeseburger, “medium” drink, and “medium” fries (since small no longer exists in some places). Right next to that price is an upgrade offer to the CAPITAL combo…For just $0.99 more!
Let’s break down the cost of the regular combo:
Patty – $0.40
Bun – $0.30
Cheese – $0.30
Lettuce – $0.02
Tomato – $0.02
Ketchup/Mayo – $0.01
Drink – $0.25
Cup – $0.25 (left this separate since cups always seem to get their own charges…i.e. cup of water)
Fries – $0.40
Misc – $0.90 (burger wrap, fry packaging, prep/cooking, bag, napkins, extra condiments)
Total Cost for a “regular” combo: $2.85
Now let’s consider the cost for a “large” combo that costs $0.99 more:
Patty – $0.40
Bun – $0.30
Cheese – $0.30
Lettuce – $0.02
Tomato – $0.02
Ketchup/Mayo – $0.01
Drink – $0.30
Cup – $0.25
Fries – $0.50
Misc – $0.95 (burger wrap, fry packaging, prep/cooking, bag, napkins, extra condiments)
Total Cost for a “large” combo: $3.05
“Regular” combo profit: ~30%
“Large” combo profit: ~40%
Not a bad increase in profit! Alright so I made all the numbers up…maybe the number may not be accurate, but I bet the profit margins are…Anyone can confirm?
But back to the main point of this post…this whole just a few more cents attitude makes the average consumer poorer. I mean take a look around…car washes…bigger combo’s…coffee…people are always looking for a good deal, but really, it’s not the consumer’s who are winning. Well, maybe it’s a win-win situation…if you really need more, but the vast majority, I’m guessing, could’ve been just fine with the “regular” combo…including me.
mapgirl
January 10, 2007 at 11:30 am
‘What’s another X-cents/dollars?’ is a really bad line of thinking.
It’s why I never supersize it at fast food restaurants. I get a sandwich of 500 calories and maybe some fries if I’m really hungry. I know it’s only 50 cents more for the whole meal, but I don’t know the extra calories of a soda.
I try to buy what I’m going to actually use. Right now, I regret this giant bottle of Dial antibacterial soap refill. I just don’t use it!
freedumb
January 10, 2007 at 11:34 am
lol…I just used food as an example, but, Costco is a big “hey just a few more cents” place…I guess being frugal backfires sometimes too…?
D
January 10, 2007 at 12:11 pm
I don’t size up at the fast food locals or even my beloved coffee, unless at home. Probably because I know that by doing it I am pushing my calorie intake over the edge. Not to mention, I used to go large and found out that I can get full without going large. I even like the $1 menu or $.99 or whatever.
Do you have any idea how long you have to walk to burn off a big mac? add the fries, and you will be on the treadmill or out of the house long enough to eat two more meals.
Maria
January 10, 2007 at 3:55 pm
Another take is the $1 dollar menu. $1 for a cheeseburger, $1 for fries and $1 for a Diet Coke. I remember when a cheeseburger was $.69 and now because it sounds cool to only spend a buck, they have just increased their profits but not the quantity.
Also, how about those tubs of popcorn at the movies, the refillable ones? Who eats that much popcorn in one sitting?! I could go on and on…
Single Ma
January 10, 2007 at 4:25 pm
Funny, I was just at Wendy’s the other day. I ordered the turkey & swiss frescata sandwich meal. The price on the board said $5.29.
When I placed my order, the lady asked what size drink do you want. I was confused. Huh? She asked again, what size drink do you want? So I said large, assuming that’s the size that comes with a “meal.”
When I got up to the window, my total was over $6.00. What? But the board said the meal was $5.29. You said you wanted a large drink ma’am. I change my mind, just give me the size that comes with the advertised meal. It’s a medium cup (plenty for me), and then she says it…
Well, it’s only a 49 cents difference. *faint*
Amazing how fast food business are increasing their profit margins by making cashiers ask one simple question.
moneymonk
January 23, 2007 at 11:29 am
I know you are using Fast Food as an example. But I understand the concept and logic.
In general, “the world is designed to take our money” …LOL
So I cannot blame these companies for making a profit or extra profit.
It’s all about gratification and discipline.
S/100/30
January 28, 2007 at 8:12 am
Glad to see that you’re back!
Evan
February 13, 2007 at 9:40 am
I consistantly get destroyed at the movies. How can I say “No” to the prepubscent kid when he offers me an additional 4 pounds of popcorn and 35ozs of soda – “for a quarter more.”
Daniel
February 26, 2007 at 11:17 pm
Hello Brownie I liked you “It’s just few more dollars” post and
your blog. The way you have written this post is very interesting and at the
same time giving information about profit margins and common man financial
deals.
theWizard
March 18, 2007 at 7:48 am
I fear I fall prey to the “Super-Size” culture of our fast food joints all too often. I do prefer the ones where you can get the standard combo and fill your own medium cup again. Burger King and some McDonalds do this but not the Wendy’s around here
Cheers
Zachary
April 4, 2007 at 3:14 pm
Yeah, I’ve learned not to be taken in by the “upsell.” I just don’t need a large soda or large fries that badly.
Samar2k
April 20, 2007 at 8:28 am
i rarely like to eat outside because i fall ill from the food outside. I make my own mew and favourite foods at home and enjoy it.:smile: