Why are Greeting Cards so Expensive?

July 22, 2016

Why are Greeting Cards so Expensive?

 $4.95 , $5.95, even $6.95. Why are greeting cards so expensive?

OK, on one level I can see your point. It's a piece of paper with some ink on it and an envelope. You can get an entire spiral notebook, 100 pages of paper with ink on them as well as a cardboard front and back cover, for less. So why are greeting cards so expensive?

I have a number of answers for you.

The first answer is easy. It's all about the numbers. Let's take a generic greeting card from a generic greeting card company, something like Hallmark but not Hallmark because I don't know their exact numbers and don't want to get sued for making stuff up about them.

So, a big company in the business of making greeting cards.

You go into a store and browse through the card section. You find one that would be perfect for your Aunt Myrtle's upcoming birthday and you flip it over. It's $4.95 - before tax! For a piece of card stock, some ink, and a colored envelope.

So, retail is $4.95. Oftentimes stores purchase their merchandise for half of what they sell it for at retail. So the card that costs you $4.95 was purchased by the store for about $2.47.

That means that the store is making about $2.48 off your purchase. Highway robbery, you think. But wait.

Look at the expenses the store has to cover with that $2.47:

  • Shipping to get the card from the manufacturer to the store,
  • Any taxes the shop has to pay,
  • The time it takes the shop's buyer, or stockist if you want to get all fancy about it, to browse through the millions of cards presented to her to choose the ones the store will carry,
  • The time it takes the stockist to enter the card into the shop's inventory system,
  • The time it takes the stock-person who receives and unpacks the shipping box to do so and to put the card on its shelf,
  • The value of the space that the card takes up within the store's real estate until it is sold,
  • If the card is on the shelf for any amount of time, the time it takes the stockist to run a physical inventory of the items in the store,
  • The proportional payroll of the register clerk who rings up your purchase,
  • The card's portion of the utilities it takes to keep the store running while the card is in the shop,
  • Any proportion of advertising and marketing the shop does to bring buyers like yourself into the shop,
  • The shop's profit margin off the sale to be fed back into the shop,
  • The shop owner's profit margin off the sale to make the whole business of owning and running a shop make sense,
  • A proportion of of loss (expense) built into every item in the store to cover things like theft (shoplifting) and damage (from all those hands pawing through the cards), 
  • And so on.

That's a lot on the shop's end to cover with just $2.48.

OK, then, you think, what about the manufacturer? They're buying supplies and printing in volume. Why can't they lower their wholesale prices?

Well, for its $2.47, the manufacturer has to cover (at least):

  • The cost of the card stock the card is printed on,
  • The cost of the ink the card is printed with,
  • The cost of the paper to make the envelope,
  • The ink/dye used to color the envelope,
  • The cost of the machines used to fold and cut the card and envelope,
  • The cost of the person to run the machines that make the card and the envelope,
  • The space in the warehouse to store the card until it is sold,
  • The cost of the box the card and envelope will eventually be shipped in,
  • The warehouse staff who put the card in its box and who put the box on the shelf it where it will be stored until it is sold,
  • The warehouse staff who will pick and pack the card for shipping once it is sold,
  • The warehouse staff who will enter the card into inventory and take it out of inventory when it is eventually sold,
  • The cost of the utilities to run the manufacturing plant and warehouse,
  • If the manufacturing plant is in a different company, say China, than the warehouse, then the time and expense of shipping it from point A to point B,
  • The photographing of the card so it can appear in a catalog, online, and in any marketing materials,
  • The advertising company that comes up with any marketing for the card,
  • The sales person who presents the card to potential store stockists,
  • A proportional percentage of any profit the company has to make in order to stay in business,
  • A proportional percentage of any profit due to those who own stock in the company,
  • A proportional percentage of all the employees who work for the company including all the secretaries, accountants, executives, etc.,
  • Any tax that the company has to pay
  • The salary or commission of the writer who wrote the card,
  • The salary or commission of the illustrator who designed the card

And so on.

While I understand that when you are standing in a store looking for a card for Aunt Myrtle and you flip it over and see that you will have to pay $4.95 for it (and its envelope), you might feel a little blip of "that's too damn expensive for Aunt Myrtle", I urge you to think about how many people and processes and expenses were involved in getting that card to that store so you could find it and buy it and make Aunt Myrtle's day a little bit more special.

 

 



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