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What does “unit price” mean

Written by Guest Contributor

By Asmeret Payne

Every day we go shopping and see price tags but what do they actually mean? The name and price of the product are obvious but what about the rest of it? Most people don’t know so today we are going to fix that. Unit price is the breakdown of the price. The picture above is breakfast cereal. It is a 15-oz. box with an overall price of 3.95. The unit price is how much you are paying per ounce. So this cereal would be a little over a quarter per ounce. This is good information to know when deal hunting, especially if you are shopping in bulk. Why, because a lot of the price is in the packaging. Try looking in the bulk section at prices. Prices may look high at over $20 for cinnamon, but the price listed is per pound.  Most households only use less than one ounce per year. Don’t believe me check your spice cabinet. Those medium sized tubes that you inherited from your grandmother only hold .95 ounces. So look again, if it is $20 per pound then it is 20/16=1.25. That is $1.25 for a whole tube. Check the spice aisle and those same tubes are for sale at about $5. 5/95=5.26. That is actually $5.26 per ounce. That is over 4 times the price.

Retail works off of percentages. Retailers buy the product usually for about 55% of what they are charging shoppers. But before you get mad, understand that 40% is what is keeping the store open paying electricity, employees, and accepting your cards. The store only makes about 5% profit. 55+40=95. 100-95=5%. Retailers have to make that 5% count. They would rather the consumer buy prepackaged spices because 5% of $5.00 is more than 5% of $1.25.

So, if they want you to buy the more expensive one why list the unit price at all? Because it is the law, that is why.

“ALASKA Chapter 45.75. WEIGHTS AND MEASURES ACT Article 01. STANDARD WEIGHTS AND MEASURES Sec. 45.75.210. Declarations of unit price on random packages. In addition to the declarations required by AS 45.75.200, a commodity in package form, which is one of a lot containing random weights, measures, or counts of the same commodity and bearing the total selling price of the package, shall bear on the outside of the package a plain and conspicuous declaration of the price per single unit of weight, measure, or count.”[1]

Or in short, retail stores have to put it on the tag. So, next time you are shopping stop and read the label. You just might learn something new about what you have been buying. See you next time and thanks for reading


[1] Alaska Statutes: AS 45.75.210. Declarations of Unit Price On Random Packages. Web. 04 July 2017.

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