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
Most typically, the brand sells the items wholesale to the retailer. So your £100 Adidas trainers are sold by Adidas to the store for, say, £50. Adidas makes their money when they sell the order of shoes to the retailer, then the retailer has to recoup their expense by selling to the customer. Markup is about 2x in general, so whatever the regular price is, the store paid half that. The difference covers store rent, employees, marketing, discounts/sales, store profit.
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