Drove by a gas station with advertising $2.57 / gallon last night and had my mind blown.
Consider what’s involved in getting that product to that location at that price:
- Finding a large deposit of oil (which required drilling a bunch of dry holes first, I’m sure)
- Installing drilling equipment
- Pumping ~2 gallons of oil
- Transporting it to a refinery
- Refining the 2 gallons of oil into a gallon of gasoline
- Transporting that gasoline to the gas station
All of the steps above require someone to be paid an acceptable amount (whether in wages or in return on invested capital).
It’s a marvel of modern capitalism that all of those steps, with profit at every point, can be accomplished with an end-user price of $2.57.
There’s nothing that I will ever do in my life that works as perfectly as the system above… and I bet the same goes for you!