Comment · Sat, August 15, 2020 · ND Owner
Why such a huge difference in pricing for Agmatine capsule vs powder?
Original post in this thread
3ric843 · 14 points
25$ for 30g encapsulated VS 18$ for 125g loose powder seems like a huge difference to me. There isn't such a big difference for other products I buy.
You pay 38% more for 76% less quantity...
Why? I hate dealing with powders, but the price difference is gonna force me to on this one :(
What they were answering
Direct reply to the original post — see the thread post above.
u/MisterYouAreSoDumb · ND Owner
Honestly, I have not looked at agmatine pricing in a while. We always do price adjustments if a raw material goes up by more than 20%. There is a possibility that the raw material went up in price when we got a batch in for a capsule run, so we had to adjust the price up. However, we may not have had to do a powder run since then, so the price may not have been updated there. We try not to adjust pricing up unless our costs significantly go up. So if we do a capsule run of something, but have not done a powder run since our raw material costs went up, it can cause a disparity. I will check with the team on it.
Also, you are comparing bulk sizes of agmatine powder to smaller sizes in capsules. A 120ct 250mg capsule bottle only has 30g. You are comparing it to the larger 250g jar. You always save money in bulk because of the amortization of the fixed unit costs over more doses. You can't compare the small size of a capsule to a much larger size of a bulk powder. There are significant marginal costs to capsules, and agmatine is not an expensive raw material. So when you take a raw material that costs less than the cost to encapsulate it, you get disparities like this. If the capsule itself, and the labor to encapsulate it, costs more than the marginal cost of the raw material in each capsule, you are always going to have big differences between a capsule and powder. When you start comparing small size capsule bottles to large size powder jars, it just gets even more so. There is a floor on costs as well. The jars and bottles have a marginal cost. The labels and ink used have marginal costs. The labor to actually package each unit has a marginal cost. It costs us about the same to package a 60ct capsule bottle as it does a 125g powder jar. So on a marginal basis per dose, the cost is a lot higher. You are amortizing that fixed cost over a lot more doses in the 250g jar. So any time you have fixed marginal costs, the unit with the larger amount of doses will always have a lower price per dose. That's because that fixed cost is spread out on a per dose basis. If we made a 30ct bottle, the per dose cost would be even higher. The bottle, label, and labor stay the same. The amount of doses in the bottle changes. Make sense?
If I sourced our bottles from China, and outsourced the labor to China as well, we could get those fixed costs down. However, all our plastics are made right here in the US by American companies. All the production and packaging is being done by US workers that we pay a proper wage to. We pay for carbon offsetting on all our freight shipments as well. So yes, our fixed costs for packaging are higher than other brands that outsource to glorified slave labor in China and other countries. However, we are doing things in a manner in which I can be proud of, and not feel like a piece of shit taking advantage of people. Our overhead is massive because of that, but we try very hard to offset that with efficiency. So our fixed packaging costs are higher than other brands, and that can become apparent in some products with a huge disparity in the amounts of doses per unit. However, I value doing things the proper way, and I would hope our customers can see the value in that as well.