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

Also it’s rare that big items just fail to sell. That’s why sales happen. Might not make money but you lose way less. You want something to sell that isn’t selling at its current price, you lower it until it does.

And some items (especially returned ones) can get offloaded to secondary stores (Ollie’s bargain outlet is a big one. There’s many.) to sell. Same thing as first paragraph applies. You’re not selling it for a profit but you’re minimizing losses.