What is wrong with this picture?
We are aware that some outlets sell a "wine kit" for $30-$40 – not necessarily wine hobby stores.
Look at the costs below. Some are actual costs that we know of and others are conservative estimates.
Paid to grower: $10
Freight from grower to processor: $5
Processor markup: $5
Freight to retailer: $2
Cost of packaging including box and plastic bladder: $3
Cost of labels, corks and shrink caps: $6
Cost of add-pack including yeast, bentonite etc: $2
Retailer markup: $7
total: $40
And that is with a conservative estimate and very modest retail markup.
There is a way to cut costs, but we don't recommend it. You simply take a wine kit, add dextrose and cut the juice in half and add water. This dilutes the flavour, aroma and taste of the wine, while keeping the alcohol level the same.
This is a trick done to be able to put something on the shelf for the lowest price possible, but it really does hurt the wine. As with many, many other products, cheap options are available but they often hardly resemble the desired product.
On the other side, wine kits can be much more expensive as well. This is done by purchasing superior grapes (also high demand grapes from specifically renowned growers) and improving the crushing/pressing process. Reducing/eliminating grape seed oil in the grape must and decreasing the heat used in condensing of the grape must are two examples of improved grape processing.
There are numerous factors that go into the cost of a wine kit. Some of those costs are fixed and can't really be reduced. One of the largest factors is the quality of the grapes and crushing/pressing process. This is the area where corners and therefore costs can be cut, but also the area that most greatly influences the quality of your wine.