the profit made from juice which apparently from my numbers can theoretically be as much as a 2000% return on investment
I'm honestly baffled as to how you came to these calculations.
To run an operation of the size and scale that these 'major California manufacturers' are running, costs them an assload more in expenses than just $1.03 per bottle. They have their ingredient cost which we all do, but there is tons more to it than that. The standard across all industries in the world is to desire a 300-400% ROI on manufacturing. If you are making an original product, it should be sold for at least 4x your cost. This is standard in all forms of manufacturing.
Now let's take a look at the load of expenses that you skipped that you claim are going 'straight into the pockets of these rich businessmen'.
First you have research and development, while some companies have obviously spent more money on this than others, I won't even bother to speculate on the R&D costs for a company like Five Pawns.
Next you have manufacturing costs. Most of this is being outsourced to companies like
Molecule Labs and
California Vapor who basically, take a companies recipe, and they are contracted to label the bottles, source the materials, and add it to the bottles in the appropriate quantities while maintaining an FDA approved lab and paying staff that meet that criteria. Expect your cost per bottle to increase to over $1.50 when outsourcing to something like this. If you don't outsource to an organization like this, you'll never be able to supply juice on a nationwide scale as these companies do.
Third, we have infrastructure costs. Insurance, phones, utilities, web sites, warehousing, logistics and all the associated employees. You can easily estimate this for a large scale company like 'Suicide Bunny' to be in excess of $50,000 monthly. I'd roughly expect to increase their per bottle cost by at least $1.00. This brings us up to $2.50 per bottle.
Fourth, we have sales. Suicide Bunny employs a full time sales team across the country. They have local reps, phone reps, web managers, advertising, marketing, design...After speaking with a sales rep for suicide bunny I can tell you that their commission is $0.20 per bottle + salary. There is additional infrastructure and management cost associated here. Let's add on another $0.50 per bottle. Ok so now their cost to bring their product to market is $3.00 per bottle. Suicide Bunny sells their 30ml bottles at wholesale pricing to B&M's @ $12.00 per bottle. They are achieving 400% mark up, manufacturing industry standard.
The local B&M then marks it up accordingly from there to achieve their typical 100% margin (less than that in retail and you're committing retail suicide).
These costs are in no way different than any other industry on the planet.
Would love to know where you achieved this 2000% ROI idea from.
TL;DR: 2000% ROI is a joke, manufacturing standard is 300-400% ROI and that's what we're seeing in the vaping industry. Basic business principles.
