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Forum Post: How much mark-up is there on retail sales ?

Posted 2 years ago on April 8, 2012, 3:35 p.m. EST by FriendlyObserverB (1871)
This content is user submitted and not an official statement

How much do retailers mark-up their prices ?

Does anyone know?

How much mark-up is there on a new car?

How much mark-up do agriculture dealerships charge when they sell machinery to farmers?

A$50,000 tractor would have have ?? $5000 or $10,000 mark-up??

I have tried to ask retailers how much they mark-up their prices but I could not trust they were being honest.

I know how much tax I pay , but not how much mark-up.

At least the tax goes back to the community.

I believe the profits should also belong to the community. Why does the retailer keep the profits ?

I also believe we should limit the profits.

184 Comments

184 Comments


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[-] 2 points by friendlyopposition (574) 2 years ago

I scanned through this entire thread, and every 3rd or 4th response has the OP asking "what is the mark-up?" It is like you don't even read what people are saying.

If I buy a widget at $50 and sell it at $75 then the mark-up is 50%. That is the mark-up - the difference between the cost of the goods and the selling price.

This doesn't account for salaries, benefits, facilities costs, advertising, etc. If you want to figure all of these expenses in - then you need to look at profit, which has been mentioned by several responses. If you just look at mark-up, which you attest is some big secret - you aren't getting the picture of what it takes to run a business.

If you limit profit, you will also limit production, innovation and ultimately jobs. If my company can hit the 'profit ceiling' by selling 100,000 widgets a year, then why would I want to lower my prices so that I can make the same profit by selling 125,000 widgets? Why would I want to invest in a research on a new widget? Why should I make my widget in a variety of models or colors?

[-] 1 points by FriendlyObserverB (1871) 2 years ago

you obviously do not understand the application of profit cap. It is clear in your comment.

As for mark-up, no one on this thread has offered a clear mark-up on any product..? so far as I know.. I asked for a website .. none is found..where do we find actual retail mark-up .. ?

[-] 1 points by friendlyopposition (574) 2 years ago

Thank you for staying consistent.

Also, here is a summary of the responses for mark-up:

"When I sold shoes at a major retailer I was told that shoes listed between $60 and $200 had a wholesale price of $15 to $70 " "Best Buy has a 25% markup on all goods " "In the pet store that I help run, mark up (Not synonymous with profit) is up to 300% for cheapo items (<2$ each) and more like 25% for more expensive stuff." "For the worst of the worst, do some checking on the Noka chocolate story from 2006. A markup of as much as 4,444% for chocolate" "I'd bet that we're still looking at a 200-300% mark up based on how cheap the labor is." "I think standard retail market is about 100%" "Low cost items can be marked up as much 200-300%, while larger ticket items ,like the vehicles in your description, will have a lower percent mark up."

It looks like the secret is out now... lots of data for you to work with.

[-] 1 points by francismjenkins (3713) 2 years ago

Right, which is why I'd much prefer coming up with ways to promote more employee owned companies (e.g. something like an SBA loan program), rather than distorting the market with these sort of schemes (which will have unpredictable consequences). 42,000 of our factories have closed since 2000 (and not because of obsolescence of what they were producing, but rather because of offshoring to low wage countries). Why not try to reopen these factories under an employee ownership model? We have plenty of employee owned companies in the US, and studies have shown they're more productive, survive longer, and provide better benefits compared to their conventional counterparts.

I think it's also time for the US to do what every other developed nation on earth does, charge a value added tax (so we can restore the balance between production and consumption).

[-] 1 points by FriendlyObserverB (1871) 2 years ago

unpredictable consequences..? is that what you are worried about !

francisjenkins, I thought you knew better.. !

[-] 1 points by francismjenkins (3713) 2 years ago

Well, yes, some amount of predictability is a good thing. I don't have a PhD in economics, so I'm not quite sure what the effect of this sort of program would be (but I'm also fairly sure academic economists don't understand what the effects of something like this would be), so I don't think it's something we should spend very much time promoting.

OWS is about participatory democracy (in both the political and economic sphere). We have plenty of successful, working models that could be expanded on, before we begin to try more radical experimentation. So for me, my opposition to this has little to do with my views of whether this is right or wrong, efficient or inefficient (since I concede that I can't answer these questions). It's about promoting change in a common sense way.

We know our society can function just fine if we allow citizens to hold recall elections, because many of our states already allow this (and have for about a century). We know employee owned companies work very well, because we have thousands of employee owned companies in the United States, and studies have shown that they're more productive and survive longer, while providing employees with better benefits. We know labor unions can be a valuable resource, because in many cases, unions have proven their merit over time. We know things like nonprofit real estate trusts (in the context of low income housing and rental properties) can work very well, because again, this has been proven as a viable and workable alternative.

We know we can do just fine if we criminalized less things, we didn't knee jerk to an ever increasing authoritarian police state every time something goes wrong, we built more colleges instead of more prisons, because we can turn our history books back a few pages, and find a time where we had less prisons, where we didn't have a military spread throughout the entire globe, and where we didn't have such an intrusive police state. We know one of the reasons for our success has been a public education system that closely matched the state of knowledge and technology (and was well rounded).

Laws like Glass Steagall gave us 70 years of financial stability, and we did just fine before the emergence of superpacs and when money didn't have the influence over our political system it enjoys today. So it seems to me that these are the things we should focus on for now.

In terms of promoting a society where we no longer measure success according to a sort of narcissistic standard, and we care more about each other, this is "ground up" change (not something that can be induced from the top down).

[-] 1 points by FriendlyObserverB (1871) 2 years ago

This is far advanced economics. I had a comment from someone claiming a degree in economics, and she questioned ," how a cap on profits would create a shorter work week?" I had to explain, with the cap our dollar value will rise.. The people with economics degrees aren't even close to solving the problems created by unfettered capitalism.

A cap on the top ensures money remains on the ground where it is needed. There is no other way.

[-] 2 points by economicallydiscardedcitizen (761) 2 years ago

Go to sources of online wholesalers-globalsources.com has tons of links for goods from China that I found out about while working a temp job. In retail it depends on the product too. When I sold shoes at a major retailer I was told that shoes listed between $60 and $200 had a wholesale price of $15 to $70 and in 1979 as a freshman in high school I was able to make commission of $5 to $10 per pair once my volume of 5 pairs sold was made in any given week.

Markup is high but remember to factor revolving costs of operation into it. I don't know of any retailer today who commissions their shoe salespeople in the way we were then since most retail is flat minimum wage including the retailer I sold for in 1979.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

Would costs be higher to sell a product, or to actually manufacture the product? And which requires more " skilled labor?

[-] 1 points by DanielBarton (1345) 2 years ago

http://www.youtube.com/watch?feature=player_embedded&v=h9QEkw6_O6w#!

saw this video how some good points worth a watch

[-] 1 points by hotdoghenry (268) 2 years ago

Profits should be limited? The community should get profits? Retailers should not get profits?

These are the ramblings of an idiot!

[-] 1 points by PopsMauler (182) from Chicago, IL 2 years ago

I know from working there in the past, that Best Buy has a 25% markup on all goods sold in the store.

Hell, you don't even have to work there to figure that out, lol.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

where's the proof ?

[Removed]

[-] 1 points by RedJazz43 (2757) 2 years ago

From the wholesaler to the retailer the standard profit margin is 40%, though this can vary considerably.

[-] 2 points by FriendlyObserverB (1871) 2 years ago

That's higher than the manufacturer!

[-] 1 points by JamesS89118 (646) from Las Vegas, NV 2 years ago

"Keep your money close and your jobs closer."

[Removed]

[-] 1 points by DanielBarton (1345) 2 years ago

There is no set value on mark up price it usually is done by the market though and the true value of the product. This is done by the supply and demand curve. Which can be done the by the consumers. So to answer your question there is no true set mark up price. It is all relative to the area and to the product.

Sorry there is not definite answer

[-] 1 points by alexrai (851) 2 years ago

I think standard retail market is about 100%, but that includes storage, transportation, insurance, plus cost of the goods, etc.

When all is said and done it might be more like 3% profit, obviously depending on the industry. Some products are sold on a cost-volume basis and others on a quality-premium basis.

If you look at the audited financial statements of a company you can get a pretty good idea on markup if you calculate "cost of goods sold" divided by revenue or if you look at what percentage "net income" is of revenue.

You'd be surprised how much a big company like Walmart wastes on transportation & logistics costs trying to get cheap overseas products to market so people can save a few dollars.

[-] 0 points by FriendlyObserverB (1871) 2 years ago

You say when all said and done 3%. but that is after salaries and bonuses which I believe should be included in the calculated profits. Advertising should also be included in profits. In fact all expenses except shipping should be considered profit.

[-] -2 points by Centerrightcountry (16) 2 years ago

So, they're wasting the money, but somehow lowering prices? Please, do elaborate. But if you ever interview for a serious job at Wal-Mart, don't bring it up there. LOL.

[-] 3 points by alexrai (851) 2 years ago

Take a look at the financials for yourself. They save a lot of money on product cost by using Chinese labor, but the cost of shipping it across the ocean, storing it in warehouses, and transporting it to retail stores eats billions of dollars.

They could save all those costs by paying a bit extra to support US manufacturing, and the end prices wouldn't be much different. Not that there is any US manufacturing anymore...

[-] -2 points by Centerrightcountry (16) 2 years ago

Don't you think the people at Wal-Mart are in a little better situation than you are to make that determination? And even if the cost advantage is small, apparently it's enough to drive decision making of their end customers.

I don't like buying things made in China and attempt to avoid them when I can. But I've decided that bottom line price isn't my only consideration and I can afford to make that choice. Personally, I don't shop at Wal-Mart, but I don't judge those that do. Wal-Mart is just responding to it's market.

Dumbass Friendly has posted his obsession about "middleman" margins multiple times. He thinks that middleman margins are too high, yet doesn't go into business to lower them, nor to take a Community College class to learn how to not be so stupid.

[-] 3 points by alexrai (851) 2 years ago

Don't take what I said the wrong way, they make money because the combined cost of product + shipping is still slightly lower than buying American. The margins are extremely thin, but because the company is so massive they still bag a few billion in income each year... even at low margins.

They are not responding to the Market, Walmart has been instrumental in setting the tone of the great race to the bottom over the past 20 years. It would be better for the country overall if they had used local manufacturing, though they would have had a somewhat harder time undercutting other businesses.

Depends what perspective you take. If you think globally, it is a waste of resources to ship all of that stuff overseas, and truck it to stores, to avoid paying labor costs. Labor does not pollute the environment, and wages provide consumer spending power to middle class workers. Its better for society to manufacturer local, and sell local.

[-] -2 points by Centerrightcountry (16) 2 years ago

Para 1, you're right.

Para 2, you're wrong. It may be better for the country, but their customers are telling them decision by decision to pursue the lowest possible price.

Par 3, but resources are fungible and price represents resources. So, especially if you think globally, they're doing the right thing. Now, if you don't think globally, but more nationalistically, like me, you'd rather see us import less and leave more jobs here for the betterment of our society, not someone else's.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

Why do we limit corporate taxes but not corporate profits ?

Business/corporations want to take as much profit without limit , but they want limits on how much tax they pay.

Sounds like a double standard.

If business 's only want to pay 15% tax , than they should be limited to 15% profit.

Corporations only pay us 15% in taxes but they take without any limits. Is that a fair system?

[-] 2 points by monetarist (40) 2 years ago

I dont see how you link 15% tax with 15% profit. Why not 5% profit or 50% profit? Of course there is not logic to this. But then, I dont expect any logic from you.

[-] 0 points by FriendlyObserverB (1871) 2 years ago

The double-standard comes from wanting limited taxes, but not wanting limited profits. Place a limit on profits and we will balance this system.

[-] 1 points by wellhungjury (296) 2 years ago

Markups will vary base on initial cost of item and the overhead it takes to run any given retail operation. Low cost items can be marked up as much 200-300%, while larger ticket items ,like the vehicles in your description, will have a lower percent mark up. I do not know that markup since it is not in my area of expertise. Now, why does a retailer keep profit? Because they are the ones who took the risk to earn these profits. Reminder, profits are taxed. The community gets a share.

[-] 3 points by MattLHolck (16833) from San Diego, CA 2 years ago

risk takers

got a love them

I only give the thumbs down to cowards

[-] 1 points by FriendlyObserverB (1871) 2 years ago

Is the initial cost of the item , the true value of the item?

[-] 2 points by wellhungjury (296) 2 years ago

True value of an item is what someone is willing and able to pay for said item. Markups are designed to cover for overhead and profit. The fluctuation of overhead and the "true value" of any item will ultimately determine if you actually receive profit.

How would you determine value?

[-] 2 points by MattLHolck (16833) from San Diego, CA 2 years ago

what ever people are willing to pay

granted money is not evenly distributed

[-] 1 points by wellhungjury (296) 2 years ago

Basically what I said.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

True value is the cost of manufacturing an item. the profits added on by the middlemen have no true value.

[-] 1 points by wellhungjury (296) 2 years ago

The propensity of someone to buy an item is its True Value. (Willingness, readiness and ability to buy.) Basic economics 101. You could have put $10,000 into the manufacture of an item and if no one will buy it, it is not worth the $10,000. It is only worth what someone pays for it.

I know you have a problem with "middlemen". Break the process of up from raw material to consumer in "your" ideal way. I would like to see how you think it should work. Maybe you will convince me?

[-] 1 points by FriendlyObserverB (1871) 2 years ago

If you put $10,000 dollars into building a garage in your back yard...

and you are not selling it does that make it worth-less ?

[-] 1 points by wellhungjury (296) 2 years ago

You purchased the garage for $10,000, therefore you were the buyer that had the propensity to get the garage, thus qualifying its value of $10,000. Now if you were to turn around and try and sell your property, garage, backyard, main house, you will start with an asking price, but it is only worth what it actually sells for. Actual Value is determined at the time of transaction.

Would you consider addressing the second part of my comment from above?

[-] 1 points by FriendlyObserverB (1871) 2 years ago

the value would be what it cost to build it .. not what it sells for .. and though the garage is not for sale it has value.. just ask the property tax adjuster.. he will tell you it has value. and he will raise your taxes .. lol

[-] 1 points by wellhungjury (296) 2 years ago

Yes, a tax assessor will value your property and apply taxes. I own a shop that I built 4 years ago for $80,000 and the assessed value last year was $220,000 including the property that it is located on that I purchased 7 years ago for $83,000. Go to a realtor and they would assess the value even higher. However, these are projected values. If I sell the property, I can ask whatever I want. (The value from the tax assessor, the realtor or any other price that I wish) When it sells at whatever price is agreed with the buyer, this will become its actual value. This concept is covered with several experts that I have read. Rick Edelman and Dave Ramsey are two that come to mind.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

So, if you were to build a shop and it would cost you $80,000 dollars .. but lets say in advance you ask a realtor when all said in done what it would be worth, and the realtor tells you it will be worth $250, 000 .. so you tell yourself .. you can not go into to such a debt to build a shop worth $250,000 and decide not to build .. at $80,000 you could have afforded to build it , but not a quarter million !!

[-] 1 points by wellhungjury (296) 2 years ago

Originally, I was the buyer at $80,000, thus making its value $80,000 because that is what I paid for it. If I choose to sell, the value becomes what someone else is willing pay for it. If I find a buyer that will pay $250,000, then it is worth $250,000 upon completion of sell. If I can only find a buyer that will pay $40,000, then it is only worth $40,000 upon completion of sell.

When you hear about someone who has a collectable item and claims that it is worth "$2500". It is only worth that when they can find a buyer to pay that amount. Same concept.

Now, I would not go to a realtor to assess future value of the building unless my intent was to sell or flip it. I built the building because I needed it and could afford the cost. If someone told me that it would be worth 3 times that, I would still build it because I could afford the my agreed to price. It's value at that time.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

value at the time .. so than explain " underwater homes" .. These people bought their homes with the intent to pay them off in say .. 25 years .. but during that time the home prices go down .. but since they are not selling and planned to hold on til paid for .. why do they consider the value less ? than what they purchased it for ? if you do not consider your garage to be more than you pay for it .. why would it work in the reverse ?

[-] 1 points by wellhungjury (296) 2 years ago

The only time that being "underwater" matters is when you can no longer afford the agreed to payments and you wish to sell the home to get out of the mortgage agreement or if you are trying to refinance. If the value has dropped below the remaining principle on your mortgage (for many different reasons), then you are unable to sell at an amount to payoff the mortgage and are thus "underwater".

The trigger is the moment that you wish to sell and you find a buyer. At that moment, value is agreed too. Any other time is speculation. In our economy, we have to speculate value for taxes, loan ratios etc. Just a necessary evil. I think people get into trouble when they are too ambitious with speculation. I personal am overly cautious when making these decisions. I would rather do without than be under a heavy mortgage where everything has to be perfect to make the payments. The world is hardly perfect.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

..so what is their home really worth than .. if it is considered underwater but they don't sell it ?

[-] 1 points by wellhungjury (296) 2 years ago

First, why do we want to know? Taxes, refinance, sell, use as collateral? You will get three different assessments of value. The best way to speculate value is to see what other houses that are similar in size, condition etc. are selling for in the surrounding area. That will give you an estimated value. When it actually sells, is when you know actual value.

Do you disagree with any of this? What is your perception?

[-] 0 points by FriendlyObserverB (1871) 2 years ago

If the dealership makes ten thousand profit on a tractor, the farmer had to work hard for that ten thousand and had plenty of risk, while the dealership did nothing.

[-] 2 points by wellhungjury (296) 2 years ago

The dealership purchased or paid for the rights to sell the tractor from the manufacturer. They also pay the overhead on a storefront with sales staff, repair technicians, other staff, parts, taxes etc. Any of which is not paid for will put the dealer out of business.

[-] 0 points by FriendlyObserverB (1871) 2 years ago

That doesn't answer to the question, " how much mark-up?"

[-] 2 points by wellhungjury (296) 2 years ago

I stated that I did not know that specific question in my original post. I was trying to discuss the other comments and questions that you made in your original post. I think that I am trying to better understand how you determine who should get profit and who should not.

My work relates more to manufacturing and we have a system of markups in our materials too. Depending on the original cost of any given materials can determine the percentage of which it is marked up. Smaller cost items will have a much larger markup to compensate for labor, shipping and handling. Higher cost items get a smaller markup to cover for same variables. Ultimately, you got to be able to pay your bills to keep working or you close your doors.

[-] 1 points by gnomunny (6614) from St Louis, MO 2 years ago

I didn't go to business school but something I learned back in the eighties when I was doing some research was that if it cost you, say, one dollar to have someone manufacture a product you want to sell, you would have to sell it for $1.60 (if I remember right) just to break even. That sixty cents was supposed to cover all the other costs besides manufacturing it; i.e. advertising, transpo, taxes, etc. That's one basic aspect of mark-up. That was back in the eighties though, so all associated costs are probably much higher now.

[-] -1 points by Centerrightcountry (16) 2 years ago

Then open a new dealership that undercuts the existing dealership. You'll make easy money and make farmers better off. But you can't, because your idea is idiotic.

[-] 2 points by FriendlyObserverB (1871) 2 years ago

Show us the mark- up.

[-] -3 points by Centerrightcountry (16) 2 years ago

You're just another lazy fuck with a bad idea.

[-] 2 points by shoozTroll (17632) 2 years ago

Ain't nuthin' lazier than WallStreet, except maybe conse(R)vatives.

Pure 100% lazy.

[-] -2 points by Centerrightcountry (16) 2 years ago

If you say so, because, of course, you know a lot of people in the business in your circles. LOL.

[-] 2 points by shoozTroll (17632) 2 years ago

I just asked supervisors. They get lazier, the higher they go.

WallStreet produces absolutely nothing. Zip. Nada. Not a single damn thing.

Conse(R)vatives are very lazy minded. That's been proven through fMRIs. They just don't have their brains in gear.

[-] -2 points by Centerrightcountry (16) 2 years ago

Typical Joe-lunch bucket stupidity. You'd be lucky to find Wall Street on a map.

[-] 2 points by shoozTroll (17632) 2 years ago

That's still a lot better than the flying monkeys you have for brains.

They make it easy for you to get lost.

And lost you are, you dim little star.

[-] -2 points by Centerrightcountry (16) 2 years ago

Oh my, now that hurts. I grew up in a blue collar family, I get how labor can often see management as doing nothing. But the view is out of ignorance, nothing else. Funny, but I had some friends in college that were first timers in their family. Their blue collar relatives had them convinced that going to college was going to "write their tickets". They got a big shock when they didn't get the "do nothing" jobs their families fantasized about. Pure ignorance.

[-] 2 points by shoozTroll (17632) 2 years ago

Of course I saw it, but I also talked to them.

Every single one went into management because they were lazy and didn't want to work.

Shocked??

Don't be, it's truth.

Management is LAZY! And that's not funny at all.

[-] -2 points by Centerrightcountry (16) 2 years ago

Just like my friends' dads.

[-] -1 points by takim (23) 2 years ago

you can't expect marxists to understand .

[-] 1 points by wellhungjury (296) 2 years ago

I understand, but I like having discussions with those who are not of the same opinion as myself.

[-] 0 points by takim (23) 2 years ago

YOU want to have a discussion, they have an agenda which does not permit discussion. They love give and take as long as you take( agree with) what they're giving.

[-] 1 points by wellhungjury (296) 2 years ago

I suspect we all have agendas. I am upfront with mine. To label each other and ourselves (dems/repubs, conservatives/liberals etc) is a waste of energy. Most ideas from the left, right or others may have good merits. I choose to address each on its own and decide for myself which is the best approach. Guess that is why I have always been registered as an Independent. I cannot pull a party line....I just do not trust anyone that much.

[-] 1 points by factsrfun (6714) from Phoenix, AZ 2 years ago

You may be right about parties, but signing a pledge is an action, and standing against everyone who signs a stupid pledge that controls their actions, is a fair manner to decide whom to support, now it is true that almost all the people who have signed the "I will be stupid" pledge are Republicans and almost all Republicans have signed, but that just makes it easy, not wrong to oppose them.

[-] 0 points by wellhungjury (296) 2 years ago

If you mean signing a pledge to a specific party, I would say that Democrats and Republicans are equal in their partisan fever. I think what makes this country work is that we do have the extremes but ultimately over time follow a path of moderation. Sure, things swing hard to left or right from time to time, but in time those things tend to correct themselves too. Nether side is completely correct in its approach to governing. The one thing that they are both good at is keeping and obtaining power, which happens to be their main focus.

[-] 2 points by factsrfun (6714) from Phoenix, AZ 2 years ago

I was reffering to the Grover Norquest no tax increase pledge, did you really not pick up on that?

At least the folks at home know that either you're slow, or very uninformed, nice time saver, don't you think?

[-] 0 points by wellhungjury (296) 2 years ago

You responded, for the first time, to a thread that has not spoken of Grover Norquest nor "no tax increase". I think you are on the wrong thread. Maybe you should probably read a little more slowly and sound out the words so you can fully understand what you are reading. Don't be so quick to be dick.

[-] 2 points by factsrfun (6714) from Phoenix, AZ 2 years ago

yeah, I'll keep that in mind, and you make a good point to all those who didn't know what I was talking about

[-] 0 points by Builder (4202) 2 years ago

Your endless posts regarding this same topic are nothing short of SPAM, meaning Stupid Pointless Annoying Messages.

Online shopping is currently doing a great job of rationalising in-store profit margins. Support online shopping if you really want to destroy those you consider to be profitting too much from retail markup.

Then get onto the real issues of this movement, chiefly, the control of our media by six major corporations, and why they are Too Big To Jail, even when they are clearly breaking every law that was meant to curtail their criminality.

[-] 0 points by JuanFenito (847) 2 years ago

It depends on the product and the sector.

Groceries have a very thin margin because the market is extremely stable. People come and go reliably and habitually. Everybody needs it. I think they are around 30% on average.

In the pet store that I help run, mark up (Not synonymous with profit) is up to 300% for cheapo items (<2$ each) and more like 25% for more expensive stuff. Many, many factors go into this decision. How small is the item? Is it easy to steal? How easily can a child grab it and break it? How likely is an employee to be injured while handling it? Is it perishable? What are the chances someone will buy it before it goes bad? Roughly the same amount of labor is used to take a small cheap item off of a truck, and scan it at the register, as it is for a larger expensive item. So we need to make more percentage on these types of items to cover this.

If the profits should be confiscated and given to the community, why should they also be limited?

And finally, Do you think there is nothing at all that limits mark up? Do you seriously think we can charge whatever we want? If we raise prices too much, someone else will beat our prices significantly and we will go out of business. The market self regulates prices.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

Either way you look at it, you are taking as much as you can. Correct ?

[-] 1 points by JuanFenito (847) 2 years ago

No. I could charge a million dollars for a dog toy if I wish. No one would pay it, and everyone would go down the street to my competition. I can only charge what going rate is for the services I am providing, or else the market will crush me like a Styrofoam peanut. But yes, I do charge this theoretical maximum amount. Doing anything less would be akin to a person with a PhD taking the salary of unskilled labor, a senseless waste.

[-] -1 points by FriendlyObserverB (1871) 2 years ago

You compare a retailer with someone who has a PhD !!

You retailers really think mighty mighty high of yourselves..

[-] 0 points by JuanFenito (847) 2 years ago

That is probably the most childish counter-argument I have ever heard. I don't think highly of people with PhDs, It was merely a reference to pay scale.

Wait a second... you think people with PhDs are "higher" than other people? I treat everyone the same, which is why I didn't think anything of it.

[-] 0 points by FriendlyObserverB (1871) 2 years ago

Everyone is higher than the back-rider middleman... EVERYONE !

[-] 0 points by JuanFenito (847) 2 years ago

Really? Wow. The thing about middlemen, is that the market does not tolerate them unless they are adding value to something.

If I buy a product from Wal-Mart at $7.50, and try to sell it to you on criagslist, you wouldn't buy it, because I'd have to charge you more than wal mart does to make any money.

Every middleman situation is like this, people will go to the highest source that suits them. No one is stopping you. People buy from middlemen because they want to, or else the middleman goes out of business and the workers go bankrupt.

And now you are engaging in identity warfare, something that has been used since the dawn of humanity to drum up hatred against one class or race or another. All you have to do to gain power is to get people hating each other. Poison people and then convince them you are the antidote.

[-] 0 points by FriendlyObserverB (1871) 2 years ago

The middleman has all but bankrupt the entire nation and global economy due to unfettered profits.

It's not hate , it's reality.

[-] 1 points by JuanFenito (847) 2 years ago

It's a stereotype, which is a function of hatred. Sure, some middlemen are what you described, but do you think all of them are causing the economic collapse? Really? The guy selling auto parts down the street is destroying the economy with unfettered profits?

As I said, stereotypes are hatred.

[-] 0 points by FriendlyObserverB (1871) 2 years ago

I will share a story of a parts dealer. The manufacturer sold the part to the wholesaler for $50. The wholesaler repackaged the part and sold it to the retailer. The retailer sold it to the customer for $450 !

It's really not hate .. it's justice.. middlemen have been doing this from the begining of time.. they should be thrown in prison , but I will settle for a cap on profits .. to the bare minimum for their hateful existence .. lol

[-] 1 points by JuanFenito (847) 2 years ago

Yep. More stereotypes.

Why doesn't the customer buy it directly from the wholesaler? Or, perhaps from the manufacturer? Could it be that the item increases in value every time it is handled?

Do what I do, I make my own stuff. There's a simple solution to the problem. I guess that doesn't solve your problem of not having your neighbor's stuff...

Let's take wal-mart for example. They buy the item directly from the manufacturer, and give the customer a slam-up price. All for an average profit of around four cents on the dollar. Would you buy an item that costs five dollars, risk having it destroyed or stolen by pirates on the way to the US, risk having customs seize it because you didn't line your paperwork up right, risk having your employee steal it off of your loading dock, risk having the building caved in by a natural disaster, risk having a shopper steal it from you, and most importantly of all risk not having anyone buy it at all, all the chance to get twenty cents once the bills are paid?

I didn't think so. That's why you are not in business. Things work on a large scale, which is why shoppers hire middlemen to get them goods. They can't drive to a factory in another state to get toothpaste.

Your thinking is really not much different from the crazy right wingers who want to throw homosexuals in jail. Does it matter what your neighbors are doing in the privacy of their home? No. Does it matter to you who your neighbors are buying their groceries from? No. If you don't want to participate in the system, the way other people want to have it, make your own stuff like I do.

[-] 0 points by FriendlyObserverB (1871) 2 years ago

Speaking of stereo type, are you a troll ?!

[-] 0 points by JuanFenito (847) 2 years ago

No, I am serious. These are real questions, talking points and issues, you can choose not to debate or reason with me if you wish, but acting like I am not raising real points here amounts to saying "lalalaAA! I can't hear you!"

All the nonsense spouters have left it appears, now the term "troll" is used in place of "I don't have anything to say to that"

[-] 0 points by FriendlyObserverB (1871) 2 years ago

If there was a cap on profits we could all begin retirement in our forties !

[-] 1 points by monetarist (40) 2 years ago

again another stupid statement with no bearing on logic.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

A cap on profits would give money greater buying power. And allow the working class to work easier and retire earlier.

I thought you gave up on this debate?

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[-] 0 points by hchc (3297) from Tampa, FL 2 years ago

Then please get your corporation going and start doing that.

Or shut up.

[-] 0 points by FriendlyObserverB (1871) 2 years ago

Over 30 comments, but no one knows/ gave an actual example of mark-up. Why is this? Why do retailers keep their mark-up a BIG secret? If everything is so honest and justified, they would openly display the mark- up. I sense things are not so honest. Retailers are hiding secretly how much mark-up they add.

We pay sales tax, and profit on all purchases. We know how much sales tax we pay , but we do not know how much mark- up. It would appear the government is honest , but the retailer is not.

Also some one commented buyers want the cheapest prices. I believe when buyers can afford better they buy better. But because profits are so high buyers don't have extra cash and forced to skimp on cheapest products.

[-] 3 points by JoeTheFarmer (2654) 2 years ago

Probably because every retailer marks up things differently. Smaller retail stores need to mark up things more because they have less volume if sales. Bigger stores like Walmart, Kohls, and Target can mark things up less because of the huge volumes they sell.

Designer boutiques can mark up items significantly because they are selling to a select audience of fools with money. People will pay a huge markup on a "Coach" handbag so they can flash it about. Does it cost Starbucks more to make a cup of coffee than the local bagel mart? No but they can charge twice the price because people think it is better. It is probably the same coffee from the same mountain in Brazil or Columbia.

As for automobiles you will find the markup on a Ford Fiesta is a lot less than the markup for a Mercedes. Why? Because some people are willing to pay for the luxury, sure it costs more to produce but not 300% more.

In general retailers will charge what people are willing to pay. Larger retailers do a lot of research to figure out what that number is. Smaller retailers use trial an error. Mark it too high and nobody buys, mark it to low and you have a hard time paying the bills.

[-] 1 points by gnomunny (6614) from St Louis, MO 2 years ago

You touch upon a little-known concept in marketing called "perceived value." If you can convince a consumer that a dollar cup of coffee is actually worth four dollars by some clever marketing like connecting the drinking of said coffee with, say, the 'hip' West Coast celebrity lifestyle (read Starbucks), you'll find many gullible consumers that will pay that price. It amazes me.

[-] 1 points by JoeTheFarmer (2654) 2 years ago

I saw a program where a coffee shop was caught substituting Colombian coffee as expensive Maui coffee and were doing it for years. People swore there was nothing like it.

You gotta love marketing. I always loved Folgers saying "It's mountain grown!" I checked and all coffee is grown in the mountains.

I also love "one of the best" because you could be second to last.

How about when they put up "real people" or "real customers" on TV commercials. That does not mean they are not actors

[-] 2 points by gnomunny (6614) from St Louis, MO 2 years ago

They have marketing down to a science, don't they? "Mountain grown" a great example. I remember when Ricardo Montalban was shilling for the Chrysler Cordoba and its "fine Corinthian leather." There's no such thing as "Corinthian leather" of course, but it has a nice ring to it, doesn't it? For the worst of the worst, do some checking on the Noka chocolate story from 2006. A markup of as much as 4,444% for chocolate that, upon further investigation, was no better than your common Hershey bar, but, like your coffee story, people paid it until the company was exposed. Perceived value. Great comments, Joe, it gave me a good laugh.

http://dallasfood.org/2006/12/noka-chocolate-part-1/

[-] 0 points by FriendlyObserverB (1871) 2 years ago

Mark it too high and the consumer has a hard time paying his bills, plus to compound the problem as profits are raised sales drop and manufacturing lays off; manufacturing is what supplies retail with consumers. The cap cures the evil profit problem.

[-] 2 points by JoeTheFarmer (2654) 2 years ago

If you price it too high it will not sell and then you either lower the price or go out of business. It is not an easy game to play. It is even tougher when there is competition. Subway has the $5 foot long so Quick Check has the $2.99 10" with a free drink so McDonald's puts out the $1 menu.

All without a cap.

[-] 2 points by FriendlyObserverB (1871) 2 years ago

I feel tied up in chains , as I watch the competition fight over who gets the next drop of my blood. Neither one of them is my friend.

[-] 1 points by JoeTheFarmer (2654) 2 years ago

You are way too cynical. You need to lighten up. Your life is a cakewalk.

In the days of old it was much tougher. You had to get up early to milk the cows, churn the butter, chop the firewood, wash the clothes in the river, crap in the out house, and half of your children would die before reaching 18 and you would probably die before 55.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

But life would be so much nicer if there was a cap on profits. Money would have much more buying power. I could work fewer weekly hours and retire in my forties. Plus enjoy a few lavish holidays. Wouldn't that be great!

[-] -1 points by JanitorInaDrum (134) 2 years ago

As soon as I became psychically and psychologically dependent on McDonalds dollar menu, they started cutting things off it. No more 2 for 1 cherry pies and there I was, writhing in agony at the drive through.

Now it's their fault I'm stuck in expensive detox and several people were wounded.

You see, this is the true and seldom discussed true nature of making a dollar.

Surely you can see this now and will stop with all this extreme crazy wing capitalism talk.

[-] -2 points by JanitorInaDrum (134) 2 years ago

Oh but that menu differs depending on where you are. Sunshine and oxygen has to be pumped in to where I am, which is a geographic armpit surely not far from hell.

[-] 2 points by JoeTheFarmer (2654) 2 years ago

So make your own lunch or go to Lucile's Lunchenette or Al's Diner. Honestly, I have not eaten at McDonalds in more than 20 years.

[-] -2 points by JanitorInaDrum (134) 2 years ago

Well then who would I have to blame for all these maladies? ;-)

[-] 0 points by engineer4 (352) 2 years ago

As long as they keep mcnuggets, the world will be fine.

[-] -2 points by JanitorInaDrum (134) 2 years ago

Your wisdom is profound, timely and admirably astute.

I nominate that your likeness be graven in gold and worshiped by all on regular intervals. ;-)

[-] 1 points by gnomunny (6614) from St Louis, MO 2 years ago

You know, there IS that empty spot on Mount Rushmore between Lincoln and Teddy R! (-;

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[-] 0 points by engineer4 (352) 2 years ago

A little humor goes a long way

[-] 1 points by engineer4 (352) 2 years ago

You are assuming that you need to buy. You only need necessities such as food, shelter, etc. All other items are extra. If the price is too high for any consumer good, then don't buy it. I follow this logic all the time, and this resulted in good savings, good life, and future secured. You have to be selective and smart in your purchasing of goods and services. Quit complaining about profits, there is nothing wrong with it as it provides incentive to the producers and investors. Let the market work. If you try caps and limits, nothing will work very well, you will have shortage, no choices and price instability. You need to get a better grasp on how things work. Your pie in the sky ideas ( caps, hour coins, equal pay, etc) that you keep promoting in these forums are just that and nothing more.

[-] -1 points by JanitorInaDrum (134) 2 years ago

I tend to buy mass quantities and like to pay every last dime plus 20%.

Then I like to sell below cost, advertising like hell (maybe several super-bowl spots) and make up for it in volume.

[-] 1 points by JoeTheFarmer (2654) 2 years ago

That is what they do. It is hard to start out like that but WalMart started as a small department store in Arkansas. Sam Walton looked for good deals and instead of keeping the profit passed savings on to the customer. He did so well he opened a second store, then a third...

There a many avenues to go. If you stay small boutique you will naturally have to charge a higher markup and to do that you need to offer something different.

[-] 2 points by DanielBarton (1345) 2 years ago

because there is not set mark up and there will never be a set mark up. If i am the only one who makes or knows how to do something i can mark it up a million percent. If thousands of people know how to do something or sell something the same i can only mark up the price enough to get a profit or my money back. This is simple economics please visit your public library and read on supply and demand. It will save you and us time

[-] 2 points by shoozTroll (17632) 2 years ago

It's because it's a long and convoluted trail. The end seller is hardly the only one responsible for pricing.

From the entity that mined/produced/refined raw materials to our "friends" on WallStreet.

The profit trail that leads to markups is blurry at best.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

The retailer knows exactly what he paid for each item. And he ain't talking. What is the reason for his silence? Is he ashamed of his greed? Is he worried customers would revolt!

[-] 3 points by JadedGem (895) 2 years ago

I know what the mark up on most items is. It varies from business to business based on their expenses and payroll and competition. When looking at china's wholesale prices, please check out the shipping and order quantities as well. If you are really concerned you can stop buying highly processed foods and buy bulk wheat and other dry goods from a place like Bob's Red mill or Walton feed. Remember to check prices in your local store and figure in your shipping costs. It is not worth buying in bulk and having it shipped if its just as cheap to buy the same item in your local store.You can buy a used car, that will save you thousands of dollars plus independents usually make less on the sale than dealerships. Look for unbranded products if you can and avoid purchasing the products that are made in china, branded and sold at huge markups. Sometimes its okay to order straight from China if it is between two products both made in China and that would require shipping. Go to a farmers market, the food is usually grown near by and that saves on the gas to get to your table and supports local farmers. There are Salvation Army stores everywhere so you can by used clothing and other items for your household ,used, right in your community. Used items are often the best deal. Sometimes you may want to buy a name brand electronic at Walmart simply because they offer the most convenient service policy and local options for product repairs or an imported item would be minimal at best. Undesirable cuts of meat are often cheapest per pound and sold for less the cost per pound to process a live animal, so you are getting a deal on that. But you are a troll so you don't really care about making smart buying decisions. You don't care about real capitalism or even spending more on an environmentally friendly product or one with higher standards with in the factory for the workers. Responsible consumers weight their options if they are fortunate enough to have spending money beyond meeting their basic needs in the only manner possible. Real members of OWS do need to think about all the things I mentioned and become more responsible consumers and put their money where their mouth is whenever possible. No matter how many people are jailed in the US, I could still run out and buy a crack rock if I so desired. That's the capitalist system at work as I've told you before. The cheapest product is not always the clear winner. As many retailers as go under, I hardly think most are trying to rob you blind. But if you really are concerned about costs and markups, by all means do what poor people do and buy as many things used as is humanly possible, show up at the Wednesday super-sale for $99 per pound pork-chops and chicken breasts, buy a freezer. Cut back your cable, ask yourself if you really need high speed internet. Why can't your house be 80 degrees this summer? I have good Ideas, I actually do have to watch my money and spend smart to survive. I know how to do a lot on a little. I have to. Some of my options are more limited and I can't always purchase based on conscious, sometimes I have to make some purchases simply on price. If we all do the best we can, we can make a difference!

[-] 1 points by Gillian (1842) 2 years ago

Right On!

[-] 1 points by FriendlyObserverB (1871) 2 years ago

What's wrong with simply placing a capmon profits. This will improve the value of the dollar exponentially. Everyone wins with a cap.

[-] 1 points by shoozTroll (17632) 2 years ago

So is everybody else in the supply and manufacturing chain.

Not to mention WallStreet.

Why pick on only the retailer?

This does however fall in line with my suggestion for a "truth in profits act".

[-] 2 points by FriendlyObserverB (1871) 2 years ago

Yes , a truth in profits act. Good idea shooz.

[-] 1 points by shoozTroll (17632) 2 years ago

It would be nice to know how much a thing actually costs.

Remember too, that monies corporations donate to think tanks and "foundations" like ALEC are likely in budget and not part of profits.

[-] 0 points by FriendlyObserverB (1871) 2 years ago

Where do you think the budget comes from?

[-] 1 points by shoozTroll (17632) 2 years ago

Corporate budgets are formed by the corporations themselves.

Where did you think they came from?

[-] 1 points by FriendlyObserverB (1871) 2 years ago

Shooz, your name is on my bad list. Do you remember why?

[-] 1 points by shoozTroll (17632) 2 years ago

Am I supposed too?

Why do you keep a list?

[-] 1 points by Gillian (1842) 2 years ago

Friendly,retail mark ups vary but are generally quite large for the largest retailers since they pay so much less for items... but the average ranges between 65 and 150 percent. Retailers can charge anything they want as long as there are people who are willing to pay. I've known dept. stores who paid a penny for slightly defective Jeans and then sold them for 50 dollars a pair and the consumer never noticed that they were flawed. Drug companies mark up their drugs 300 to 3,000 percent. Wine is marked up very high...about 200 or more percent. Cigarettes are marked up extremely high and the gov't makes most of that in taxes and the store makes hardly anything.
Consumers control the market with demand and customers are definitely becoming more savvy shoppers. JC Penny has quit having their sales and they have set one price point and that's what you pay and always will. I like it. I would rather be able to shop anytime and get their best deal than to have to wait for sales, knowing full well that they just inflate prices in order to compensate for the sale prices anyway.
I believe that most things we purchase new today are cheap, cheaply made goods usually made in China. Outsourcing manufacturing is what has kept our prices low at the checkout but in return we receive cheap, defective products that we need to replace more often- costing us much more in the long term. I quit buying new things for the most part, I refuse to buy anything made in China and have chosen to purchase things that I plan to keep for the rest of my life or be able to sell at some point. If you plan ahead and don't impulse buy, you can save yourself tons of money in the long run because you won't be replacing things so often, if ever again.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

Thanks Gillian.

Retailers keep their mark-ups a very close secret from the consumer. And of course trying to make the most profit possible. With many advertisement tricks. But none of them honestly display mark-up. And these dishonest people are the people that control the unemPloyment rate of the nation. It is through highest profits possible policies that the consumer works long long hours on a tight tight budget.

A profit cap would change all that. No longer would the greedy merchant control the lives of the consumer.

[-] 1 points by Gillian (1842) 2 years ago

I can understand why you feel as you do but try to put yourself in the retailer's position. I own a tiny company with two employees so I don't compare to the big boys in any way really. But, I don't want my customers to know what I pay for something because they don't understand why I price as I do and so, if they knew, they would nickle and dime me to death and I would go out of business very quickly. here's the thing. The mark up is not the issue really. It's the net profit that becomes the issue when it's used to only support the greedy business owner without compensating employees fairly or giving them poor working conditions ( like the chinese factories that make most of our American junk). My net profit after paying wholesale for the item is very little- especially when I can only purchase a small quantity and have a lot of overhead or more employees to pay. I had a very hard time explaining this to my husband and is why we are now divorced. He thought if we charged double for a product that was our profit. Nope. After I pay everyone, pay my bills, pay all my operating expenses, I really don't make that much money. Most of my profit comes from service and consulting- not from retailing items. Do you ever think about how much your plumber makes? Let's say 80 dollars an hour ( for a self employed plumber) and he's taking home about 20 dollars an hour which leaves 60 dollars an hour minus travel time, fuel, vehicle wear and tear. No purchase of goods, no shipping expense. Service industries, consultants make tons of money. I am a very fair business person and I don't negotiate my prices because I don't mark them up with the intention of negotiating. Some companies do that and manage to con their customers into believing they are getting a good deal. No one gets a free lunch! Those big chain lawn companies make a lot of money and they do it in some of the most unethical ways. They don't pay their technicians well and they will sometimes dilute their products with so much water in order to increase profits. The customer doesn't know that. I knew one company that used food coloring and was applying nothing at all every other time yet charging as much as 100 dollars per application. Some companies will mark up an item with the intent of putting it on sale or running a promotion. I don't do that. If I do anything, it's to give someone something for free in exchange for a referral. All of my customers know that when I must increase my prices, it's being done so very fairly due to the increase in fuel or other living and operating expenses.
The way that you protect yourself against gouging is to shop wisely, not on impulse but very thoughtfully and do some research. Find the lowest price, read reviews about the retailer and the product.
Passive income..... take a look at bank products and fees. Banks charge more for debit or credit transactions and nothing for checks? Yet, a check costs more to process. So, it's obvious that they are capitalizing on what people use the most of. Convenience fees? I hate the term because it says that they are making me pay extra for saving time, gas, paper, ink. It's annoying as heck. Doctors make a lot of passive income from prescribing drugs and handing out samples because drug companies pay them or reward them for doing so. Does it take more thought or energy to prescribe these drugs? No. But, they do it because it's where they make 100 percent profit...essentially, it's free money, free car, free trip to Hawaii, etc.. It really annoys me that people are willing to pay a plumber or electrician a hundred dollars an hour for changing a light fixture but when it comes to the guy lifting their nasty trash can into a truck and hauling it away, they don't think they should pay him very much. What about hair stylists? Most cut the same cookie cutter style day after day and get paid around 60-200 dollars a cut just to stand there, chat and use scissors, dryer and some product and then they get a tip. But, we must ask, are they renting the chair from the owner or are they employees. Some salons rent the chair because it's too expensive to pay the employee a good wage and pay business insurance and pay the liability and worker's comp insurance ( which is outrageous). So, there are a lot of factors to consider before judging whether a retailer is gouging you.

People need to slow down and pay attention and work the system for their own benefit. You have to be savvy, informed and patient to make smart choices as a consumer- otherwise, you're going to pay for all that convenience.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

Sorry Gillian , the cap is the only way to rein in the greed, balance the wealth, and save the economy. You understand.

But worry not, a thriving economy will bring customers to your shop, along with capped profits. It's a double win. ;-)

[-] 2 points by Gillian (1842) 2 years ago

I don't understand how you would cap profits when every company and every industry differs and I don't see how that would make any difference anyway. Even if you told Walmart that they could only have a 3 percent net profit margin, they would find all sorts of ways to maintain their executive salaries and bonuses and then everyone else would suffer..those working for them. Product quality would suffer, costing us all more and small business would become extinct because it doesn't have the tax deductions and loopholes like the big boys do to be able to funnel money into lower tax/no tax accounts.
Walmart had a 3.8 net profit margin in July 11. I had a 1 percent for the same month. What does that tell anyone? What if Walmart was forced to operate at a 1 percent like me? Don't misunderstand, I wouldn't care if Walmart disappeared along with Home depot, Lowes and the rest of the big boxers. But, who do you think would suffer as a result of a lower profit margin? The employees and the customers, not the CEOs. They will always find a way to funnel money into their pockets first. So, I really don't understand. Profiteering is a whole nother ball of wax and it should be outlawed. Take for example the 39 percent increase in premiums in 2010 for Blue Cross/Shield ( in response to Obama's healthcare reform). That is obviously insane greed at work and anyone would be able to see that. The sad part of this is that if I had a policy with them , I would not be able to afford it unless I raised my prices and my profit margin 40 percent. I would go out of business because I could not compete at all with anyone in my industry. So, Reagan's trickle down theory surely holds up in that respect!! Yes indeed, I end up being driven out of business because these big guys drive up the cost of everything...food, electricity, fuel, goods and services, etc..

[-] -1 points by JanitorInaDrum (134) 2 years ago

Stop making sense and just comply when you're told you have to buy something in the name of patriotism.

[-] 2 points by Gillian (1842) 2 years ago

Sorry, you're right. I know...team player, team player. Sorry, sorry sorry.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

Gilian, you misunderstand the application of profit cap, it goes on the mark-up, .. not the net.

[-] 1 points by Gillian (1842) 2 years ago

You'll have to give me a specific example and show me how that will control pricing and benefit everyone.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

let's say the mark-up cap is ten percent across the board.

Prices suddenly drop in all the retail stores.. buyers come out from everywhere .. and sales go through the roof.. manufacturing orders go up... jobs are created ... and more buyers ..

Stores like walmart that buy cheap from china and compete with local manufacturing , will now be limited to the mark-up .. so walmart buys for $5 and resells for $5.50 .. instead of the usual 200% mark-up from $5 to $15. the consumer saves $9.50 .. and spends it on other items ..

You really need to understand how the concentration of wealth has stalled the economy .. and stopped the flow of money.. They were sucking profits out at a very high rate during the boom while a lot of borrowing was going on , and suddenly when the borrowing stopped the economy stalled .. the wealthy are not circulating those profits. and no one is borrowing anymore .. the government is deep in debt and can't borrow anymore.. the interest is very high and it comes out of the tax budget .. .. So ... the cap would have prevented all that money from piling up at the top .. and kept it circulating within the hands of the consumers .. creating jobs like it is intended for. But currently consumers are broke ..and without jobs .. and not spending .. and can't borrow anymore .. so here we sit . all because the greed of unfettered profits has milked the economy for all it can..

A cap on profits is not intended to put the retailer out of business .. but rather to stablize the economy.. and prevent an uneven gap in wealth. Without the working class and the consumer.. shops will close up.

[-] 1 points by XenuLives (1645) from Charlotte, NC 2 years ago

Is there a specific product that you want to know the mark-up on? Like others have said, its going to be a different story for each item. We can, however, pool our resources and probably get the full story for a specific item, depending on the complexity of that item.

[-] -1 points by FriendlyObserverB (1871) 2 years ago

I would like all retail to display the original price. Than add their profit at the till.

Specifically, let's look at agricultural equipment. Everytime I drive by one of those dealerships I wonder how much mark -up there , and I think about how much harder the farmer has to work just to pay the lazy-ass dealer his profit mark-up

[-] 0 points by XenuLives (1645) from Charlotte, NC 2 years ago

For farm equipment, a lot of that cost is covered by US through government farm subsidies. But yeah, I get your point.

I was thinking about a friend when I read through this. He went up to Maine during a school break to get some work picking blueberries. The workers there get paid $2 per bushel, no hourly rate or minimum (a lot of undocumented workers do this type of labor.) I'm not sure how much is in a bushel, but from what my friend described these things were probably 10-20 pounds of blueberries each. Now figure how much you and I pay for a little 1 pound container of blueberries, and tell me how much mark-up is going on after considering pay for the laborers, the costs of planting the blueberries, the cost of the land, spoilage cost, and then the transportation costs. I'd bet that we're still looking at a 200-300% mark up based on how cheap the labor is.

I'm fine with companies providing good products for a reasonable profit. How much would you consider to be a reasonable mark up? I think 50-100% is fair for non-perishable goods like electronics, and up to 200% for perishables to account for spoilage.

[-] 2 points by FriendlyObserverB (1871) 2 years ago

How much would be a reasonable mark- up? That is a most important question.

Retailers are simply a link in the chain of supply. Just as the transportation company is a link in that supply line. But the transportation does not markup the price of the item. Just a handling fee.

Markup should definitely not be determined by " supply and demand". Just because the consumer is working harder and overtime on weekends, that does not justify allowing the retailer to raise his mark-up!!!!

[-] 1 points by FriendlyObserverB (1871) 2 years ago

First let's look at the actual mark- up. Which everyone is guessing at this point. I despise the market secrecy of it all.

[-] 1 points by XenuLives (1645) from Charlotte, NC 2 years ago

I don't have the data, so all I can do is guess. Still, we can do some math and get a pretty good estimate with some calculations.

How much is 1lb. of blueberries where you live? How far away is your town from Maine (ballpark?) Do you know how much the regional power company charges per kWh in your area? What percentage of a crop of blueberries do you think will be unsellable due to rot before it reaches retail? How much does an acre of farmland cost in Maine?

I don't have these numbers, but this gives you an idea of the amount of data that is needed to do the math on something like this. And this is for something that is pretty much a "pick-and-ship" item, like berries. How much more complicated would it be to figure out mark up on a cell phone, with parts from numerous sources, labor from who-knows-where, and the various manufacturing expenses that go with it?

[-] 1 points by FriendlyObserverB (1871) 2 years ago

Very simple really.

The retailer processes nothing. What they pay for is the way they sell them item. All the manufacturing costs add up to the final price. And it's that final price is where the retailer adds his mark-up.

Retailers will never share the original cost of an item. Nor would wholesalers.

The manufacturer, the worker, and the consumer are all three oppressed by the middleman. The middleman bargains for the lowest possible price from the manufacturer, and the highest price from the consumer. This is the biggest fault with capitalism. A cap would change the whole system.

[-] 0 points by XenuLives (1645) from Charlotte, NC 2 years ago

I agree. In reality all that the retailer does is provide a convenient place for consumers to purchase manufacturers' goods. Retail stores are a service in that regard, since they give us the convenience of buying Ben & Jerry's ice cream in Topeka, KS instead of having to drive to Vermont to get the same goods.

This model, of course, breaks down now that manufacturers can sell directly to us through the internet. Do we still want to pay a convenience fee to have all of our goods available in the same place, or are we OK with spending a little more time to get the same things delivered to us from the source? If it meant that I get to pay the wholesale price for these goods (manufacturer's costs + profit) then I would switch...

As long as manufacturers will charge us consumers retail prices for their goods it is a moot point. I assume that the pricing works this way in order to appease retail, because retail is going to make up the bulk of most products' sales for at least a little while longer.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

Thanks for understanding. Did you know the retailer actually has his hand on the economic dial! That's right , the amount of mark-up determines the amount of sales which in turn effects everything else from job creation and tax revenue. The retailer controls the unemployment rate of the nation. Do you feel the retailer is qualified to make decisions that affect the nation ? Or should we have government regulate profit caps!

[-] 0 points by XenuLives (1645) from Charlotte, NC 2 years ago

Of course there needs to be regulation. Without any regulation, capitalism would absolutely destroy even more lives. I don't want to live in a cage at the expense of some guy with a yacht collection.

I think there is a large influence from the manufacturer's wages as well. The higher overall wages are, the more consumer spending, which creates demand for more products and services, improving the economy overall. If we keep paying employees so little that they have to take out food stamps to survive, then those people are actually taking a toll on the economy instead of being a force for improving it. Conservatives want to abolish the minimum wage and pay "un-skilled" people close to nothing, but they don't realize that they NEED those people to spend money or else business as we know it will collapse. You can't expect demand for anything other than basic food if your consumer base can't afford anything!

One big issue: What would happen to profits earned once they exceed an imposed profit cap? Would they be taxed? Forced to be given to charity?

I'm not sure if a profit cap is better than a salary cap on the CEOs of the largest corporations. If you cap salaries at, say, 100x the pay of the lowest-paid worker, then everyone at the company gets fair compensation for the work that they do to help that company produce.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

This is another reason the profit cap will work. Wages are low because manufacturing is operating on a tight budget due to low sales. The cap will increase sales! Which will result in higher wages due to a higher demand for the worker. A big win for sales cap.

A cap provides consumer protection.

Sales profits can never be earned more than the cap.

If the cap is ten percent, the retailer can not charge more than ten percent.

Again, the cap is a patch. The CEO wage , depending on what sector of the economy, would be reduced due to sales profits being limited by the cap. They can afford the the loss in pay. The money saved will remain with the consumer.

Thanks for this discussion. You are the first sincere discussion in a long long while.

[-] 0 points by XenuLives (1645) from Charlotte, NC 2 years ago

Thanks! It is nice to have a conversation on here that doesn't involve trolling the trolls.

[-] 0 points by FriendlyObserverB (1871) 2 years ago

Is there a website where actual prices and mark-up is listed for all products manufactured and sold?

[-] 1 points by monetarist (40) 2 years ago

god u r so dumb

[-] 1 points by MattLHolck (16833) from San Diego, CA 2 years ago

there could be ( a rather daunting project )

but who would pay for it

[-] 1 points by FriendlyObserverB (1871) 2 years ago

So what your saying , no one knows how much mark-up there is on anything sold.

[-] 1 points by monetarist (40) 2 years ago

yes people do. If you worked in the procurement division of any retailer or the sales division of any supplier/manufacturer, you would know. And that information is not guarded by any NDA. It's just domain knowledge.

If only you were not a anti capitalist anti govt hippie, you would made for a fine Republican Presidential nominee, after all they don't need brains.

PS: Romney would be an exception to that

[-] 2 points by FriendlyObserverB (1871) 2 years ago

I am not anti government.

We the people.

We the government.

[-] 0 points by JanitorInaDrum (134) 2 years ago

There exist many products of which the only way to find out the real rock bottom price is to buy them all.

Then the only way to find out the max retail price is to wait until they are all sold.

For some reason, I've always been drawn to such items and they seem to find me as well.

[-] 0 points by po6059 (72) 2 years ago

why should the profits of a private business owner go to the community?

[-] -1 points by MikeInOhio (13) 2 years ago

Why don't you spend some time in Russia and you will see how well "community profits" worked out.

Hey, I've got an idea. Why doesn't President Obama just send everyone a check for 1 billion dollars and we'll all be rich?!

[-] 1 points by Gillian (1842) 2 years ago

Now that's an idea!! I likes it, I likes it! :D Can I nominate you to be my president?

[-] 0 points by MikeInOhio (13) 2 years ago

I don't think you would like me as President. Too much fiscal constraint.

[-] -1 points by monetarist (40) 2 years ago

its not a secret. While you can't get markup on individual products for competitive reasons (the retailers have deals with the manufacturers which they would not like their competitors to know), you sure can get the overall profit margins for a retailer.

Walmart's profit margin is a puny 4.19% http://ycharts.com/companies/WMT/profit_margin

Other retailers too have similar numbers. Quite frankly, retailing is a low margin business.

Similarly you can look up the profit margins of manufacturers like Unilever, P&G etc.

So my dear friend, it's not a secret at all. All you needed to do was to look up the annual report of any of these companies. But looks like you dont know this simple fact and draw hasty and utterly foolish conclusions from that.

As to why the retailer keeps the profit? Because they have to pay their employees and shareholder, they also have to expand. But most importantly, it's their right to keep the profit just as you get to keep your salary.

So may I dare suggest that you need to really get out of that cave you are living in, read a few books (because lets face it your education has been a mess) and get a job.

[-] -2 points by FriendlyObserverB (1871) 2 years ago

I am not interested in margin, but actual mark-up. BIG secret. Hides their greed. Even the government is transparent. Cowardly retailers are are the silent enemy that live among us. They will not hide forever, we will find them.

[-] 3 points by monetarist (40) 2 years ago

I will now stop arguing with you. Not because you are stupid, which you are. But rather for the sake of my own sanity.

PS: The profit margin is basically (not exactly) tells us about the aggregated markup of all sales.

PPS: In case you health insurance does not cover it (or if you don't have one), I would like to pay for your weekly visit at the nearest psychiatrist.

[-] 3 points by Recycleman (102) 2 years ago

monetarist

You have shown to much aggression for such a simple question. Personal attacks of FriendlyOb have shown your need for more fiber in your diet or mouth. You may need to up your prescription on the meds. Relax and smoke a joint.

Unless you work for Walmart as a propaganda writer then you are doing a good job.

If so explain why they purchase Dead Peasant policies. Basing profit off the death of employees is just wrong.

[-] 0 points by monetarist (40) 2 years ago

Hey dumbass, your boyfriend FriendlyOb thinks that markups are some closely guarded secret. And that is why I am making fun of him. As for the aggression, I have always despised people who are stupid but think they are smart. Stupid people who know they are stupid are fine. But the category your boyfriend falls under just makes my blood boil.

As for dead peasant policies, I think Walmart doing it is wrong. However, it is an accepted policy to ensure the company against death of top level execs.

[-] 2 points by Recycleman (102) 2 years ago

Aggression again. Take a chill pill. Lack of vocabulary results in profanity.

As far top executives comment you show your own lack of knowledge. They insure hourly employees with a death policy also. They report the results on a budget and calculate discrepancy as a loss. Meaning not enough employees died year to date according to budget.

[-] 0 points by monetarist (40) 2 years ago

I think your reading comprehension sucks. Read what I wrote again. Let me distill it to aid your understanding. What Walmart does it wrong. But if a company ensures itself against the death/disability of a top exec, thats acceptable. Still having trouble comprehending?

But then think of it in another way. Let me be the devil's advocate here. What is wrong is taking a position on a person's death? As long as you are not in any way causing the death or preventing it, what exactly is wrong? Sure it ain't pretty but it ain't illegal either. If I and you take a bet that say 80% of the people who are on this forum will die between the ages of 70 and 80, what is the problem? I am killing anybody, I am just taking a position here.

[-] 1 points by Recycleman (102) 2 years ago

You are miss informed. It is not top ex. They ensure store worker. And yes it was illegal until corporation sponsored a few representives and changed the law. Even though it is still illegal for you to insure some else with out their knowledge. And speaking in English it is not top exec but all employees with out their knowledge. So if you think profits from dying employees is ok then hope you add to someone's profits upon your death. It will increase ebtad. Earnings before taxes after death

Speaker about it makes me want to cover you. You mind?

[-] 1 points by monetarist (40) 2 years ago

Okay let me repeat what I have said twice already. I know Walmart is taking an insurance on it regular shop floor employees which as I have said is wrong. However, companies do insure against death/disability of key employees and there is nothing wrong with that.

[-] 2 points by Gillian (1842) 2 years ago

Yes, it's like taking life insurance out on your spouse. People do this all the time and everyone who is married should if they depend on their spouse's income to survive.
It's actually very wise for businesses to insure their ' tools' even if they are employees. However, I know Walmart will not suffer or fall into bankruptcy if one of their sales associates or even one of their executives dies It's a bit obvious that they are just profiteering on death.

I own a tiny business so both of my employees are key to my success. If I lose one of them, it really does hurt my business and cost me a bundle of money to replace them. It never occurred to me to insure them against loss. That's a bit too much for me to swallow. Employees come and they go, they could quit anytime and I'd still be in the same boat. I'm really glad I don't shop at Walmart :D

[-] 2 points by DKAtoday (26862) from Coon Rapids, MN 2 years ago

You know? That is a very funny insight.

Why have the insurance providers never issued divorce insurance?

Wow a pay-out to both aggrieved individuals, kind of like having no-fault insurance on your car.

But the cost of being insured in this divorce happy society would likely be prohibitively expensive.

Huh.

A 1%'er insurance?

[-] 1 points by Gillian (1842) 2 years ago

They do, it's called alimony :D But you're right, I'm surprised that they haven't issued divorce insurance ..what a brilliant idea and it would encourage even more folks to hitch up, make babies and then divorce and then shack up together as a wealthy happy couple hahahhaha It would certainly get the economy moving again, eh? Do you suppose they would have a pre-existing stipulation like having to be married for so many years before you can file?
Let's try it! I'm game. I want to be a 1%er.

[-] 1 points by DKAtoday (26862) from Coon Rapids, MN 2 years ago

They would likely want to have some sort of Kardashian rule.

{:-])

[-] 1 points by Gillian (1842) 2 years ago

HAHHAHAHAHA I had the same exact thought!!

[-] 1 points by DKAtoday (26862) from Coon Rapids, MN 2 years ago

:-])

[-] 1 points by Recycleman (102) 2 years ago

Profit from employees death by insuring them for unrelated business purposes is not only immoral but was illegal just a few years ago. So if a Walmart burns down and all employees burn to death its OK because they made budget. The best part is they don't carry that insurance for the employee to compensate the family. Double win. profit for the 1% upon death and taxes.

[-] 1 points by Gillian (1842) 2 years ago

Can you imagine how many corps could actually find ways to murder their employees in order to rake in insurance? I can't prove this but I know a foundation that is notorious for having employees that die just weeks before their retirement and it's just a bit too common to be coincidental. All the employees are african-american too and the families get absolutely nothing, not even a pension, when the employee dies. It's really disturbing.

[-] 1 points by monetarist (40) 2 years ago

I agree that it's not all that moral to take an insurance on your shop floor workers but I don't see any reason why Walmart should be giving that insurance money to the families of the employees when Walmart is paying the insurance premium from it's own pocket.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

So if I am driving my car and you are my passenger.. and if their is an accident and you get killed , you are saying I should be the beneficiary because I paid for the insurance .. sounds good to me !!! lets go for a ride in my car . lol

[-] 1 points by monetarist (40) 2 years ago

Did you pay for my insurance? Then yes you may be the beneficiary.

And in real life, I would not want to be in a car with a lunatic like you.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

Ah come on , it will be fun .. and don't worry I have insurance ;-]

[-] 1 points by monetarist (40) 2 years ago

Thanks for the invite but I am a bike person. I ride my Agusta F4 and use a car only when it is too cold outside.

[-] 1 points by Recycleman (102) 2 years ago

That makes no sense. You cant have it both ways. Just another way our political officials let large corporations take advantage us employee. Death insurance should be for the families only not to enhance corp. profit.

[-] 1 points by monetarist (40) 2 years ago

Sure. I agree on the principle. But again, it's not illegal and people are free to 'bet on' stuff, even if it's someone death.

[-] 1 points by gnomunny (6614) from St Louis, MO 2 years ago

You might be surprised how many businesses do this. A used-car lot? Years ago I bought a Ford Ranger from a used-car lot, and in the huge stack of papers I had to sign was an life insurance policy, payable to the lot. If I would have died, the used-car lot would have received more than my own family!

[-] 1 points by francismjenkins (3713) 2 years ago

Profit margin can approximate mark up on retail sales ... huh? The only way I can see that is if we do it comparatively. In other words, first we'd have to approximate operating costs across the industry (Target, Walmart, etc.). Then look at profits, then guesstimate mark up. Anyway, there's much easier ways to understand how much the mark up is. Simply stated, assuming they don't release these numbers (and I'm not sure if they do or not), Walmart imports goods from (most often) China. Even if they don't pay an import tariff, there's records of the transactions. So figure out what they're paying per unit, and subtract it from the shelf price (too easy). Nonetheless, I know there's figures out there on how much the mark up is for retailers like Walmart (if someone wants to do the research). It's been a while, but I remember reading studies that contained these numbers (but like I said, it's been a while, and I don't feel like hitting Google right now, however, I think I remember seeing numbers in excess of 80%, but I'm not 100% sure, so don't quote me on that).

[-] 1 points by monetarist (40) 2 years ago

They dont release markups because

  1. It varies across retailers
  2. It can vary every hour of the day (say some special sale offer that runs from 9 AM to 10 AM)

However, operation margins can be found in the annual report of the company.

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[-] -2 points by Centerrightcountry (16) 2 years ago

You are one stupid fuck. What's with the hard on you have about retail sales margins? Post after post you keep bringing your idiotic idea and reply after reply people mock you. Did some girl at the mall have you arrested for stalking or something?

If margins are too high and these middlemen don't add value, then maybe even a stupid fuck like you could start a business. Why do you suppose you won't do that? If the opportunity to undercut them and to sell for less is so obvious and vast, how come you are all over it?