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The Cost Of This AAS Business -- Small Labs

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~Dr Juice~

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The Cost Of This AAS Business -- Small Labs
By Dr. Juice, August 14th, 2014




INTRODUCTION
I've recently been asked the question, via email, as to why the individual cost of steroids are seemingly so costly (I'm talking about the end price that a consumer pays for the average 10ml vial or your average bottle/sachet of orals). This is an expansive question that needs to be broken down into several components, each of which needs further explanation to clarify.

What first must be discussed is the factual statistical demographic to what this product (AAS) appeals to. In Canada, I'd venture to estimate that the overall percentage of the country's population as a whole, that regularly use AAS, would be 1%. Truth be told, probably lower. Working with this percentage as fact therefore means that you have a very small pool of customers to draw from. Miniscule really. However, labs are abundant and in this competitive environment a lab that provides product to this small demographic must not only be consistent, but also reasonably priced at the same time in order to survive and thrive. If these two factors cannot be met than there's not really much point in competing for that tiny 1% of the market. If there isn't reasonable compensation in what it is you're doing you might as well embark on a legal venture and go buy yourself a food truck to sell donairs or something. At least it's a legal living. The ends must justify the means.

Many of us I'm sure have been around the forums long enough to see some kind of listing that lists the prices of raw powders -- the main ingredient imported from overseas used to manufacture underground AAS. These raw ingredient lists are relatively easy to find and have been circulating on the internet for at least ten years. These raw ingredients can usually be bought in different size lots and depending on how much you plan to produce weight in raw ingredients will be your ultimate deciding factor. The desire for more yielded product = more weight in raws is needed.

The pricing will vary depending on what raws you wish to purchase. Some are more costly than others. However, at first glance the prices for these raw ingredients seem quite reasonable, even cheap in some instances when the final yield is factored in. But this is merely the initial cost in a long line of events that will take place until the end product ultimately reaches the consumer's hands.

The cost of something is relative to what the product is. Some products have a higher profit margin than others. If your privy to what a certain retail product actually "costs" then you might assume that the profit margin is ridiculously high. You might be right or you might be wrong. See, there are many more factors involved than just what you see on the surface, even more so when the product happens to be illegal. I will give a couple examples of both; legal and illegal:

In and around 1985, as a pimple-faced teenage kid, I worked for McDonalds. Yeah the one with the golden arches. The selling price of a Big Mac during that time was just under $2.00. With time I eventually worked my way up the ranks to shift manager and became aware as to the actual cost of that same Big Mac. The actual cost to produce it was roughly 24 cents! Seems crazy, right? The beef patty was 4 cents, the bun was 3 cents, veggies and sauce was another 3 or 4 cents, and the most expensive component was the cheese slice at 8 cents. Packaging and whatever else I cannot remember made up the remaining 4-5 cents. Anyhow, if you do the math you end up with a pretty handsome profit percentage. But are you getting ripped off? Back then I would have answered, "Hell yes!" But as I've grown older and hopefully more wiser, I can now see better the forest for the trees, as they say. Dig beneath the surface of this example and you uncover a laundry list of costs: food costs, labour costs, operating costs, transportation costs, and advertising costs, just to name a few. The profit needs to remain high in order to keep the business buoyant! And this short example is in the legal, but nonetheless ruthless, world of culinary competition.

The above was an example of a legal product, but what If you were to take something on the other side of the coin; say for example a little illegal product that originates from the jungles of South American countries? You'll then see a product with a seemingly gargantuan profit margin. Years ago when I was in Colombia, I could have theoretically hiked my way through the jungle to purchase a kilo of this product from a farmer for roughly $500, give or take. Dirt cheap, right? So then why do we pay upwards of $50,000+ back here in Canada for that same kilo? Well, the explanation is far too long to describe in this post, but lets just say that after I was to hand that farmer over my $500 for that kilo there's an excellent chance I wouldn't make it out of that jungle alive. There's simply so much more involved than simply going to the source and buying what you need. An entire chain of events unfolds and each and every step along the way adds to the final selling price.

And this retail model just doesn't include murderous drug cartels and sinister fast-food chains. It applies to nearly every business model the world over. Heck, even that most beloved of retail giants, Walmart, finds a way to separate the cash from your wallet in a way so subtle you leave the big box store with a great big smile on your face. But don't think for a second that those nice tea towels your wife just spent $14.99 on cost Walmart $11.00 or $12.00. If so you're simply living on another planet, or in an asylum. Most likely they paid some South Asian textile conglomerate well south of under a dollar to manufacture them.

But how can this be you ask? Buy low and sell high! It's the oft repeated motto of all things business. If you don't have a sensible markup on your product you won't remain competitive in the shark infested waters of retail for very long -- especially in a market with a measly1% share or less! Slowly you will bleed losses and soon enough you'll find yourself in a place you can't dig out from.

But pricing also needs to factor in the size of the whole operation. A big business has much more overhead than a small business, thus it needs to have higher profit margin to keep the entity remaining in the black (profit earning).


PART I


SMALL LABS

I'm going to start off the topic of AAS production by talking about the size of the actual operation. The operation of course speaks directly to the amount of production output that an underground lab can realistically churn out. Here, there's a vast difference in correlation when comparing your grassroots "home brewer", or small underground lab operator, to that of a large scale underground lab. Each of which has its own pros and cons. For this entry I'm going to first explain your average small underground operation.


Home Brewer/Indie/and Small Lab
This kind of producer is a relatively small operation that is usually run and overseen by a single person acting in many different key positions; such as chemist, assembler, importer, and possibly even distributor. There may, or may not be, another individual below this person that takes on the job as distributor and/or what we typically call a rep. This is basically the entirety of a small scale operation. And being so means that costs in the way of manpower and overheads are kept rather low. You can also include a small lab to this designation as well, as it too follows the same system of usually only employing one to three tasked individuals.

Most often home brews and small scale labs are operated day-to-day in the exact same place where the person resides. This is the same reason we often read about a house being raided and law enforcement manages to bust a homegrown underground lab in the process. "How could someone be so careless?" you ask. Usually it comes down to just keeping costs lower and profit higher. Obviously if someone was to rent another working space, then this comes with a significant added cost. Unfortunately it's not easy to find a rental place that will accommodate your daily needs whilst, at the same time, remain anonymous and maintain a low profile. There is also the pesky business of odors, waste, and worst of all, being seen coming and going to the same place frequently, possibly even daily. If keeping the costs down doesn't come into play as a factor then the next most common reason is laziness and placation. Many a small lab owner is just plain lazy and/or mistakenly thinks that their operation won't be discovered.

For the most part, small operations remain small because of their inability to grow with the demand of product it can realistically turn out. For instance: if a small lab owner is importing the raw materials to Canada, in small to very small quantities, and the demand for his product is more than he can keep up with, then it's not long until things begin to unravel for the worse. Certainly importing raws in small quantities is safer than receiving larger parcels, but it also means you're limited as to what can realistically be produced. Suddenly the demand outweighs the supply. This is where many a small lab begins showing cracks. All too often many an otherwise decent lab goes bad at this juncture. How can a small lab that imports small quantities of raws realistically maintain a large and consistent inventory (an underground lab's inventory of today can comprise of up to 40 products or more. It's staggering!) For this reason a small lab that begins with the best of intentions in mind, simply cannot keep up with demand. Unless of course they were to keep their inventory of products to just a limited menu, if you will.

Below I've listed some of the pros and cons of the small scale operation:


PROS

+ Cost:
Cost can remain reasonably low because of low overhead as well as a lack in overall security measures. Low volume output also keeps cost down. As does lower manpower. If you don't need to shell out more money for extra rent(s), time (labor), security, "employees", and importing more and bulkier loads of raws, then it's possible to provide your customers with a lower priced product.

+ Quality: Lets be honest, there are some good small operations out there. If the producer is serious, dedicated, and willing to turn out a good product consistently, then the customers win huge.

+ Security: Loose lips sink ships. Obviously less people involved in an operation means that there is less chance of somebody "slipping up" in whatever way. If the lab operator is somewhat intelligent they could fly-under-the-radar virtually unnoticed so long as they remain vigilant in their security measures.



CONS

- Scale:
Small operations are difficult to scale up to the next level without substantial added operating costs. This can be a breaking point for many of them. For this reason they tend to remain small and obscure, or disappear altogether. Ever watch Shark Tank or Dragon's Den and the panel of investors simply back out because they say the business isn't scalable? It's usually because the amount of added capital needed to go to the next level cannot be justified for the amount on return. This usually means the product's profit margin is too low and thus not desirable.

- Quality: Small operations can also severely lack in quality due to only one person being dedicated to production, or worse, the entire operation. There's no others beside him, or below him, to ensure daily quotas or quality is maintained. Accountability is at a minimum.

- Sustainability: Being a small operation and only having to be reliant on a small number of persons and customers means that the operation tends to remain small. There's no desire or wont to expand any farther. This usually means placation and many times means taking shortcuts in production. Over time things begin to unravel. Laziness is a small lab's worst enemy.

- Security: On the flipside of this topic, being a small operation can also be a hindrance when it comes to security. Small operations tend to be all in one "place." Meaning that when the shit hits the fan it's fairly easy for the law to round everything up in one single location. A single warrant can wipe them out. And for god's sake don't let the girlfriend/wife or kids know what you're doing in the spare bedroom or garage unless you have absolute faith in their ability to keep a secret.



PART II: The Big Lab Operation (coming soon)
 
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BAZ

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Good read thanks a lot, always have the most interesting posts!
 

JameoN

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Awesome post!
I'm curious, like almost every illegal substance ppl generally go for quality regardless of cost, so why is it everything is dosed so similar ? It seems to me if you kept the same cost but maybe up dosages even 50mg per cc, ppl would be more inclined to go with a higher potency
 

Bigtuna84

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How do you know if you have you’ve found a real UGL?....Ask for 1000 bottles of the same product within 24 hours...if they say yes than it’s a real UGL and they have the top tools of production aka 100k flexicon and 100k 32 tab dye press....smaller operations will have a short life expectancy because realistically they just can’t compete long term in that market of “1% users” when the top dogs are pumping out THOUSANDS of quality units each week to that “1%”.
 

Sorbate

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Some of those small guys put out really good gear till they burn out. You just need to watch the signs, they start bitching about having a life other than selling gear, well you know it’s time to look elsewhere, lol.

Almere was good until he burnt out. None of his gear ever had pip, nothing. Shit I even pinned his test susoension daily without issue and I hate pip.

I bet he couldn’t fill a huge order like that though without depleting all his stock and shorting everyone, if he could.

It’s all trust. Now with all the talk on boards and guys talking to each other privately, the shit labs get found out, guys that have no connections buy from the poor labs until they find better once they are warned by the ones who know better.

Plus labs keep coming and going.

Mission was huge, Boss was huge, Almere, Prosum. All gone now. I bet I’m 5 years there will be a couple more main stream ones gone. But new ones like Syn is here now and Genetec and Pareto. Shit in a decade these guys might be gone and Bullshark might be ruling the market, lol.

It’s all the evolution of business.
 

~Dr Juice~

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How do you know if you have you’ve found a real UGL?....Ask for 1000 bottles of the same product within 24 hours...if they say yes than it’s a real UGL and they have the top tools of production aka 100k flexicon and 100k 32 tab dye press....smaller operations will have a short life expectancy because realistically they just can’t compete long term in that market of “1% users” when the top dogs are pumping out THOUSANDS of quality units each week to that “1%”.
-- Very true! There was a time, many years ago, I took a loudmouthed wanker to task. He talked a braggadocio game about how he could supply an ample supply of quality product at a ridiculously low cost. I couldn't resist and took the bait. With a legit 10k in cash at the readies I made it simple and told the go-between I'd take all 10k of it in his most popular product, at the price he boasted of. The go-between enthusiastically said he'd happily relay the message and get right back to me. Hours passed, then a day or two, then just crickets. I finally called the go-between back to inquire and was simply told, in a defeated tone, it couldn't be done. That was that and my doubts were confirmed -- WANKER 🤡
 
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TRT_Guy

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Thanks, that was interesting... I like some of the behind-the-scenes.
 
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