They paid the cereal company for the right to sell the cereal, which is less expensive than actually manufacturing it. The stores can sell the cereal for a low price because they didn’t actually put any work into developing or creating it-they just provided the package design and the name. The company that makes it makes huge batches of cereal, then boxes it up and labels it differently for all its clients-one version goes to Price Chopper, one goes to Albertson’s, and one goes to Shaw’s. Happy-Os cereal is a generic, or private label, version of another brand’s cereal. The answer to both questions is actually the same: private labeling. How can anyone sell a book on, say, Pinterest marketing secrets for only 99 cents? Didn’t they have to put a ton of effort into writing it? You might have also wondered the same thing about some of the ebooks you see in the Kindle marketplace. How can the store sell that cereal so cheaply? It tastes almost exactly like the name-brand, after all-the ingredients must be quality and they still have to pay the workers and factory costs. Have you ever gone to the grocery store and bought a box of store-brand Happy-Os cereal for half the price of the major name-brand version?
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