Why doesn't competition from rival sellers force all prices to the same level?

As Adam Smith argued in The Wealth of Nations, the price of a product should not exceed the cost of producing it in the long run.

Otherwise, profit opportunities would include rival sellers to enter the market.

And entry would continue until increased supply would drive prices down to cost at a common level across all vendors.

Yet practise seems to contradict this principle as different buyers appear to pay substantially different prices for essentially identical products and services.