Why are Water Softeners so Expensive?
With the price of things today, this is a very good question. One must think about all the dynamics that goes into owning a business. We will discuss the overhead it takes to run a water softener business, market share, what the market will bear, and the price the dealer gets them for. These are things that any business owner must consider before starting their business. Knowing these things of many will help the business owner in deciding whether or not they should really open a new business.
Market share is the percentage of the total revenue or sales in a market that a company's business makes up. For example, if there are 50,000 units sold per year in a given industry, a company whose sales were 5,000 of those units would have a 10 percent share in that market. This part involves the competition; how do they sell their product, how much do they sell it for and how many water softeners are sold. The answers to these questions will have another determining factor as to whether or not the business owner will open their business, and how much should they charge for the product.
Whatever the Market will bear; If you took Economics throughout your educational years, you learned that the selling price of goods and services are determined by “what the market will bear.” Consumers and the market decide what a product is worth and will give so much money, but no more for that product. In other words; charge the customer as much as they are willing to pay. In some places like Florida, water softeners ranged around 6-8 hundred dollars. Whereas, in Texas they can go from $800.00 dollars to over $7,000.00 and the people are willing to pay these amounts because of the destructive results one gets from hard water.
Overhead is one of the greatest things to consider when you want to open a water softener business. There are things to consider like; what kind of vehicle will be used, the gas, insurance and maintenance. Other things like tools, supplies, training and licensing are among others that will cost money upfront. One of the next and bigger things to think about is the profit margin. If I buy a water softener for X amount of dollars and sell it for Y amount of dollars and after subtracting parts of the overhead, what will my profit margin be? After finding the profit margin, the business owner must decide if they can live off that income. As can be seen, there are a lot of moving parts to consider when it comes to having a water softener business. The aforementioned examples are reasons why water softeners are expensive.
Dealer Pricing; dealers get their equipment for far less than what they sell it for, the profit margins start at about 300% markup. How to calculate markup Now that appears to be an awful lot of money coming in; however, one must consider that most water softener companies don't sell a water softener everyday. If they did, the prices would be much lower because they could sell more for less. It is almost impossible to beat water softener prices on Amazon unless the business buys in bulk and or does a lot of business with the wholesaler. This gives them an advantage by having buying power.
Click this link to see a review of water softeners; https://youtu.be/QBn3Y2ykhHM
