Five assemblers assemble $1,000 worth of parts into a product that sells retail for $10,000. Those assemblers get $1,000 in wages and benefits, where does the other $8,000 go? A small list: The sales person that sold a new product, or the marketing team that defined it. The design team that created the product. The CAD team that converted the design into drawings that can be built. The data processing team that The purchasing team that negotiated pricing and placed the orders. Shipping and receiving Accounting that collected from the customer and paid the suppliers Management that keeps all of that working reasonably smooth, and determines which products to develop, and which to sunset. Quality assurance staff. Warranty repair Building utilities, rent and / or property taxes, insurance, tax preparers, legal advice, etc. At the retailer, purchasing, shipping costs, accounting, sales staff, building rent, utilities, advertizing, security, theft, etc.
