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
As other have pointed out margins usually are higher than 10%, but especially in phone sales retailers might sell the phone with even lower margin, if that sale leads to auxiliary purchases, such as screen protectors, cases and service plan, where the margins are much more healthy for the store.
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