Quote:
Originally Posted by brando
Take a look around you, at your electronic devices, your furniture, even the clothes you are wearing. Don't you know that 50% is the basic mark-up for all retail items sold? Get real...
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Clothes is a good point.
The most expensive, super high quality T-shirt on planet, is $2(!) wholesale, yet it is unlikely you'll ever find this quality in store.
Standard quality for western countries is ~$1.
Percentage:
We had items in the shop with a net profit of 90%.
That's not cost times 1.9, but cost times 10. Plus tax and CC commission.
WTF?!
We must be billionaires!
Really?
It's a cycle tube, cost is 85cent landed, retails for $10.
For those $9 you have to ship from the warehouse to the store, unpack and put in the shelve, answer stupid questions(is it the right size?), it enter into the system and cash it. Sure, there is still some profit left, no problem.
But:
We only sold 2k pcs of them per anno, so it's still only 20k which is more like peanuts. We could have sold them for $20 and would still sell 1800.
On the other hand if we sold them for $5 we could possibly increase sales to 2.5 units.
Do the math.
Another example?
You can sell one lot(50pcs) of $2000 bikes, ready to use/warranty/1st service incl. with a margin of 25%, or even less, as you get $500 a pop.
You CAN NOT do the same wit a $500 bicycle.
Assembly and service cost stay the same.
And in this example we don't even have R&D...