Do they make money by supplying the goods? Or do they make a certain percentage when one of the products is sold? Say for example a pair of Adidas trainers are sold for £100 in a sports store. Would the sports store keep the £100 after selling it or would some of the money go to Adidas? Or does it not work like that at all as the product is instead bought from Adidas first and therefore nothing from the sale goes back to them. Sorry if I made this really complicated, any help would be greatly appreciated.
In: Economics
I own a retail store. It is so obvious to me. Our particular markup is about 100%. For a $20 item, we paid the manufacturer $10 for it. When that item is sitting on the shelf. The manufacturer made their money and is done. I sell it, put the $20 in the bank as mine to keep (now I can buy two more items to sell for $40 in the bank).
The mass populace might be screaming that a 100% markup (50% margin) is so selfish. I can tell you I make almost no salary, have credit card debt like everyone else. I employ 15 people and pay the banks and landlord… i’d need about a 200% markup to actually be making enough profit to be rich off this business. I’ve risked my home and families future to try out this retail thing… 13 years later, there are times I wish I hadn’t. Almost every brick-and-mortar store owner is in my exact same boat… the death of retail is a real thing… in the future, we’ll probably all just buy-from and work-for Amazon.
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