Logistics and labor.

People under-estimate the cost of logistics and transport. Every inch of travel for any input, component, or the final product has to be paid; and even a wooden fencepost typically moves between at least 5 different locations before reaching retail.

Let's use wooden posts as an example:

  1. Forest. Trees are cut down into logs, and then transported to...
  2. Lumbermill. Logs are cut to size, and then transported to...
  3. Treatment plant. Without it, your fencepost won't last for every long, and then transported to...
  4. Distributor location. And then transported to...
  5. Store (e.g. Home Depot or whatever). And then you pick it up, or get it delivered to you.

Every inch, every mile, you're paying for the energy, inefficiencies, and labor involved.