It’s no secret that retailers have to sell their goods for more than they bought them for.

That’s how they make money to operate their business, like paying for shipping and warehousing, their store space, and worker payroll, and of course, making a profit for themselves.

But how much of a markup are they putting on their goods?

It varies from retailer to retailer, but with some high end brands, the answer may surprise you.

TikTok user @rileyandlu got a real wake up call recently when they discovered the actual wholesale price of their new Restoration Hardware rug.

In a slideshow, they reveal that a tag was left on the back of their rug showing the manufacturer’s price.

“When RH forgets to remove the manufacturer tag and it discloses that this rug costs $4.90 per square foot to make…”

“This 9×12 rug is marked up 1001%…” they reveal.

But the truth of the matter is more complicated than that. Let’s do the math.

A manufacturing cost of $4.90 per square foot for a 9’x12’ rug would total a production cost of $529.20.

Multiply that times “1001%” (i.e., about eleven times) and you wind up with a retail price of more than $5800 dollars. Though the actual retail price was not included in the post, this is not unusual for the price of Restoration Hardware rugs.

Yikes.

But the manufacturing cost isn’t necessarily what the company paid for that rug, as shipping, warehousing, and other costs can add a lot to the bottom line.

In the comments, several people more familiar with imports point out the complexities.

Most people would be surprised by how many steps it takes to get from a manufacturer to a retail floor.

Bottom line: don’t blame the player, blame the game.

But even the employees at the company know that they have a huge markup. You are paying for the fancy brand name.

And that is why many people figure out workarounds to get the identical rugs direct from the manufacturer and cut out the middle man.

But they cannot find these hacks online anymore.

Businesses have to make money somehow.

If you enjoyed this story, check out this guy’s helpful tip to get free tools at Home Depot without buying anything.