How much profit do retail stores make?

[Krye]

How much does Target, JCPenny, Sears, etc tack on to their prices? They have to mark it up close to 50% so that when they throw 20% off sales they still make profit, no?

What about software/video game sales such as Electronic Boutique or Software Etc? How much profit are they making on a typical $50 game?

I'm sure Best Buy, Circuit City, or electronics stores in general must have a decent profit margin too.

Thanx!

 

[JeffreyLebowski]

Originally posted by: Krye
How much does Target, JCPenny, Sears, etc tack on to their prices? They have to mark it up close to 50% so that when they throw 20% off sales they still make profit, no?

What about software/video game sales such as Electronic Boutique or Software Etc? How much profit are they making on a typical $50 game?

Thanx!

All depends on the product. Stuff that you would think of as high tech, IE plasma TV's high-end audio equipment, ect usually sees a 30%-60% mark up. Computer stuff, dosn't really have a big margin, they make money by selling in volume. Furniture is what the real money is in. My ex roommate bought a 2 piece, leather sofa set when he worked for a furniture store for $400. the retail price of the set was over $3000.

 

[vi edit]

A manager of a privately owned gaming store told me that he only makes a few dollars per game on new video games (Xbox, PS2, ext), and actually takes a loss on the consoles themselves after he pays for shipping. He makes up for it in accessories and used games which can have anywhere from 25% to 100%(or more) markup.

Other retail places really depend on the type of product, deals negotiated with distributors, and what they have to mark up to make up for overhead costs.

 

[Actaeon]

I'm sure since they purchase in mass quantities, they get alot of discounts. It doesn't take much money to make the clothing (all those sweatshops). As far as games go, it really depends on the publisher selling it. Often times those hyped up games are expensive for EB and other companies to purchase, probally around $30 each, then reselling for $50, as everyone wants them. Over time, the publisher decides to drop prices to games below the $50, and resellers often sell them around $40-$20.

I really can't give you an exact retail price on either the games or clothing. But probally not much.

 

[Amused]

I depends on the goods. And even if they have a large profit margin on the goods themselves, that margin shrinks quickly when you consider other overhead costs such as labor, taxes, insurance, rent, theft, etc.

So to say X-store buys it's widgets for $10 and sells them for $20 and consider that a 100% markup is to not realize the reality of running a business. Their margin may very well be under 5% after all their overhead is considered.

An example: A large soda costs me less than 30 cents. Yet I sell it for around 1.50. You'd think that was a huge markup, but the profit margins at my stores are VERY thin after overhead is added.

Also, some big sales you see are what is called "loss leaders." The store takes a loss on those items to get people in the store.

 

[ElFenix]

best buy had better margins than circuit city so circuit city fired all its sales people.

 

[Mallow]

I know places like BB give employees discounts on things. On a washer and dryer you might get like 20%? and on computer stuff you get 0 off b/c the difference in mark-ups. Anyone at BB want to confirm/disconfirm this?

 

[Actaeon]

Originally posted by: vi_edit
A manager of a privately owned gaming store told me that he only makes a few dollars per game on new video games (Xbox, PS2, ext), and actually takes a loss on the consoles themselves after he pays for shipping. He makes up for it in accessories and used games which can have anywhere from 25% to 100%(or more) markup.

Other retail places really depend on the type of product, deals negotiated with distributors, and what they have to mark up to make up for overhead costs.

Used games bring HUGE profits into EB and the such. Often buying "hot" games for $20 or so dollars then reselling them as high as $45, just $5 below retail. Obviously games not as popular don't get as much from the company. I go to EB sometimes at work (I work in a mall), and I see people trading in games, and often times, they rarely get more than $40 after 3-4 game trade ins. I've seen games get $1, while other games get about $20.

 

[ElFenix]

federated dept stores

 

[BDawg]

Grocery stores make 3-4%.

A district manager for a national drug store chain once told me, 90% of the store's revenue comes though the pharmacy, but 90% of the profits are from front end sales.

 

[ElFenix]

circuit city

 

[ElFenix]

best buy

 

[fastz28]

Originally posted by: Mallow
I know places like BB give employees discounts on things. On a washer and dryer you might get like 20%? and on computer stuff you get 0 off b/c the difference in mark-ups. Anyone at BB want to confirm/disconfirm this?

Usually not discount from selling price but at cost + 5%.

 

[Armitage]

Note that the 20%/50%/75% sales is often relative to the price that was marked up 20%/50%/75% immediately prior to the sale. Saw that explicitly at a local hardware store when I bought an out-of-stock but "On Sale!!" item. When I went back to pick it up, I found that the normal price was the same as the sale price. Next time they had a "sale" I peeled back some of the sale-price stickers on the shelf to find the sale price was nearly always the same as the normal price.

That store has since gone out of business. A casualty of Home Depot. Say what you want about Home Depot, that's one thing I like. They don't dick around with prices. If I see it at Home Depot, I can be almost certain that's the best price in town. I don't have to wait for a "real" sale, or screw around with rebates, etc.

 

[Krye]

Originally posted by: ElFenix
federated dept stores

Hey I actually have a membership to Federated Dept Stores. They actually were cheaper than "normal" department stores while I shopped there. I haven't seen one in about 4 years now.

 

[spidey07]

10% profit is doing pretty good for any company. Retail is normally less.

check out balance sheets posted

 

[NogginBoink]

Originally posted by: Krye
How much does Target, JCPenny, Sears, etc tack on to their prices? They have to mark it up close to 50% so that when they throw 20% off sales they still make profit, no?

What about software/video game sales such as Electronic Boutique or Software Etc? How much profit are they making on a typical $50 game?

I'm sure Best Buy, Circuit City, or electronics stores in general must have a decent profit margin too.

Thanx!

If you REALLY want to know the answer to this question, go to the SEC's website and read each company's latest annual report.

 

[trek]

the store where i work has regular prices that are actually below cost...

 

[shopbruin]

Originally posted by: fastz28

Originally posted by: Mallow
I know places like BB give employees discounts on things. On a washer and dryer you might get like 20%? and on computer stuff you get 0 off b/c the difference in mark-ups. Anyone at BB want to confirm/disconfirm this?

Usually not discount from selling price but at cost + 5%.

worked at fry's: cost + 10%
working at circuit city: cost