If merchants only get a small amount from what they sell, then how do they make profit if one or more of their product isn’t sold ?

Question

Let’s take a phone merchand for example. Let’s say that he sells the phones for 500$, but his income from a phone is 50$ because they are sold 450$ from the factory. So, if just ONE phone isn’t sold, he’d lose 450$, and he’d need to sell 9 phones (450÷5) just to come back to the starting point.

This question also works for any kind of merchandizing, including food (which becomes unsellable after a few days unlike phones).

So how do they make profit of it ? I’m confused

This post is the same as a post I made 1 hour ago that corrects some words, sorry for my bad english.

In: Economics

Answer 1

I have some experience on both the manufacturing side and retail side. For example, in manufacturing and distribution, we paid the contract manufacturer $X. We would then sell to the retailer for roughly double that. The retailer would then sell to you for roughly double that. That $130 pair of running shoes you bought at your local running store? The store paid $65 to Nike or whomever. Nike in turn paid about $35 to the Chinese contract manufacturer.