most of you are missing the point.
When a guy comes to install a sprinkler system for your yard he doesnt charge you more for the pipe than he bought it for!!
Hah, you think so huh?
I work for a manufacturer of construction products. We sell to wholesale distrbutors, who then in turn sell it to contractors who install it on your home. Lemme put some perspective on this for ya...
We produce it, we sell it at 25-40% profit (sometimes way more, sometimes less... depends on the product, and the market)
Distributor puts 10-20% mark-up on it.
Contractor puts another 10-15% on it (and most of the time, he doesn't even have to touch
it before it gets installed, as the distributor, or even sometimes us, the manufacturer, will deliver it to the jobsite).
We see copies of invoices alllll the time for what the installed prices are for these products. Now we know (via extensive research) what the average prices are for LABOR (and we know what that distributor's selling price was to the contractor), so it's very easy to see that an additional markup has been made in the interim.
We ALSO sell through retail outlets like Home Depot, Lowe's, etc... we know what we sell it to them for (which is actually MORE than what we sell it to the wholesaler for, in many cases), and we know what the retail price is. And ya know what? Even with 2 mark-ups on it, what that contractor sells it to the homeowner for is often less than what you're going to pay if you try to buy it yourself at the retail level.
There's many variables and nuances to this, but that's the gist of it all, simplified.