Thoughts on Judaism

Sunday, April 17, 2005

The Cost of Nothing

Last week, the fish market told me that they were selling two kinds of fish for Pesach. One type had oil, pepper and perhaps, sugar. Then there was the really mehadrin for Pesach al pi a hamachmir. It had no ingredients other than fish. The fish with "nothing" was twice the price of the other. (Learned from the homeopathy folks, did they?) This sparked me to run some numbers on matzah, you know, that obscenely expensive wallpaper paste, made of flour and water and nothing else.

My cost estimates, which I think err toward the more expensive:

Per hour:
Mashgiach for flour and water $25 (This is the cost to the hechsher)
Baker capable of mixing same $25
Matzah rollers $80 (10 of them)
Equipment & premises $25
Operating expenses (everything is manual) $10 (maybe some fans and light)
Let's round it up to $200 an hour
(Of course, factoring in the cost of nothing, if you want to participate in the rolling and what not, you may pay more for it.)

Estimate of production given said expenses, very conservatively: 600 matzahs (10 rollers, rolling average 1 per minute)

Cost per matzah 33c. Approx $4 per pound.

Let's give a profit margin of 50% befitting a seasonal product. $6 per pound.
Add transportation and distribution, $7.50 a pound.

Average price: $15 per pound
It's half flour and water, ... and half "nothing else".

Now for esrogim - the $80 lemon variant (Yes, I know you can pay 10 times that if you like, but let's be kind for a moment).
They sell them in the markets for about a dollar (exotic fruit and all). Let's pasul 3 out of four and add a mashgiach. What the heck, let's just go $10 per kosher esrog. Add in a 50% seasonal profit margin, $15. But the esrog must be spotless, with NOTHING on it. Ouch! $65 for nothing.

So the next time you try to get more for your money, remember less is more, ... and nothing is even more.

4 Comments:

  • I wanted to comment on the Matzah Bakery owners, These guys only work for 6 months (some of them) so they need to make a years worth of income in that time.
    According to your cheshbon, if it were a fair price for $7.50 and they charge $15.00 there's your answer.

    By Blogger Gelt Macher, at 3:03 PM  

  • Like any seasonal business, they are free to pursue other business in the other 6 months. May I recommend esrogim. Plus, the 7.50 is the broadest interpretation with a built in 50% profit, because of the seasonality.

    By Blogger Rebeljew, at 7:42 PM  

  • What about the fuel for the ovens? That has to cost a bundle.

    That said, it is of interest that Israeli matzos, even with the shipping costs, are ~$3 cheaper than the American
    in New York.

    By Blogger The Observer, at 1:10 PM  

  • One year, I am going to rent an oven in off season and premises and put my kids to work for a day or two. I'll bet I can make it for a little less than $1.50 per matzah, with "alle chumrahs".

    By Blogger Rebeljew, at 6:47 AM  

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