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Tell Me More About This "Retail Markup"!

O

Ornery

Lifer
I got off topic in shinerburke's thread:...but by golly I'm really intrigued by what I heard about some retail markups! Like 300-400% for name brand tires! Anybody else realize this? :Q

Amused said this is perfectly normal and acceptable, in order to cover overhead etc.. Sheesh! You know, when I buy tires, I expect them to make a profit on the damn things. I pay for installation, balancing and disposal fees. They have the car on the lift for all of 20 minutes. Damn, how much is that worth? It's incredible that prices are so close from one dealer to the next. I suppose there's some sort of minimum price set by the manufacturers. What a racket!

I notice computer parts aren't marked up NEARLY so much. I also notice that Best Buy can't sell a printer for any more than Buy.Com, despite the mega overhead Best Buy has. Interesting, no?

Furniture selling at 150% markup and appliances selling for 60% or so. My, oh, my! Yet I hear dealers sometimes only make a few hundred on the sale of a new car! 😕

Can anybody else mention some concrete markups for specific goods, like cameras, auto parts, construction materials, books, food, tools... anything? Just REALLY curious at this point!

I used to have my own business doing carpentry. I was right up front with people about cost of materials and labor. What a chump, eh? My wife isn't too keen on me going into business for myself again, mostly because of the paperwork and crap. I wasn't too interested either, but if you can soak people for these kinds of markups without a struggle... where do I sign up?
 
markup on 350Zs! 😀

Actually... we buy the tires retail... and then we take them home. Then we have some lesser name tire shop who doesn't have to pay for their employees uniform... for fancy commercials... or all that crap mount and balance them 😀
 
Um, if what I was told is true, that tires are marked up 300%, then I doubt you got them for retail. I found that I could buy tires from The Tire Rack for a lot cheaper than I could locally, even with shipping. I'd still save a chunck of money having them mounted and balanced locally, but I sure as hell wouldn't get the damn things at even half price, let alone 1/3 or 1/4! I have a feeling The Tire Rack is bound by minimum price restrictions too. That, or that 300% markup isn't true. I have no way of knowing.
 
Everything is different. I know that GM in Canada sells Cavaliers for $500 below thier cost because they hope to get some brand loyalty from the Cav. drivers and they hope they will come back for more epensive GM cars in the future. I can see the example of furniture & appliances being marked up so high because ........ really how often does a consumer buy furniture. It's not like most people change them every year. The manufactuer has to stay afloat by charging a higher retail price.

When I used to work in a book store, the mark ups were 40-50% and aquarium fish are maked up 400% because they have to figure in the cost of mortality and transportation.

Like I said, every business is different.

Cheers,
Aquaman
 
I'll ask my friend about the mark up on his tires. He works for Yokohama Tires of Canada. I'll get back to you on that next Monday when he is back at work.

Cheers,
Aquaman
 
Thanks, that's interesting.

I could see perishable food, or even things like fish being marked up a lot due to spoilage etc. I can see where mucho high prices on furniture keeps a LOT of people working. There are tons of furniture manufacturers, but it isn't the manufacturers making the big money, is it? I think most people buy furniture more often than you think. Most of the stuff is junk. It's rarely worth reupholstering furniture.

I don't know, maybe I'm toying with the idea of going into retail. This is a retail Mecca around here. I've seen quite a few businesses come and go, so I can see it's not easy. Funny thing is, something keeps 'em coming. There must be a LOT of money to be made, and these mega markup rumors sort of explains it!
 
my gf works at a jewelry store...diamonds see about a 100% markup...other less precious gems are usually not too much above cost...they are just there to get you in the store to buy the diamonds 🙂
 
Originally posted by: Ornery
Um, if what I was told is true, that tires are marked up 300%, then I doubt you got them for retail. I found that I could buy tires from The Tire Rack for a lot cheaper than I could locally, even with shipping. I'd still save a chunck of money having them mounted and balanced locally, but I sure as hell wouldn't get the damn things at even half price, let alone 1/3 or 1/4! I have a feeling The Tire Rack is bound by minimum price restrictions too. That, or that 300% markup isn't true. I have no way of knowing.
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Well i'm sure those fancy retail stores mark it up since people generally don't know anything about the tires they're buying. We don't go to those though...
 
Originally posted by: Antisocial-Virge
One place I worked at sold industrial bearings. We doubled the price from what we paid and in good months we made like %20 profit.
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Stop right there! You mark it up 100%, but make 20% profit. Why is that? Too much invested in inventory? Too much spent on wages and overhead in general? Is 20% the net, and is that good?
 
Originally posted by: Ornery
Originally posted by: Antisocial-Virge
One place I worked at sold industrial bearings. We doubled the price from what we paid and in good months we made like %20 profit.
Click to expand...
Stop right there! You mark it up 100%, but make 20% profit. Why is that? Too much invested in inventory? Too much spent on wages and overhead in general? Is 20% the net, and is that good?
Click to expand...

No clue really but 20% was considered good in that buisness. The way that buisness works is that you have to carry lots of stock (people usually need bearings NOW) and they are not worth a huge amount per unit so you have to sell lots of units to make any actually amount of cash. Then you take out rent, advertising, utilities and wages and you end up with %20 or less.
 
My sisters boyfriend works @ a tire shop, and he got me a set(4) of 16" Motegi Mr7's (White 7 Spoke Rims) w/ Mid Pro Tires, for $560 (that was with no markup i believe, i would have to ask him though)

Les Schwab another good dealer, offered them for $860, w/ that said, even if her boyfriend marked them up, i got them $300 less
 
I posted about the furniture markup in that thread.

I worked at a furniture store while going to college.

To give you an example, when I would unload La-Z-Boys and put them on the floor, the boss would hand me the invoices and I doubled the invoice price for the price tag.

It was a smaller "mom & pop" furniture store so they would let the customers haggle with them on price. Matresses were marked up about 150% and everything else was somewhere in between.
 
In todays business 10% Profit is good for a lot of businesses, soemtimes even less(a lot less). Now their mark up may be 100-500%, but most of that gos to rent, taxes, salaries, etc etc....

That is how theives tell them selves they ar enot hurting anybody, "these Nikes only cost $5 to make, so stealing is not bad, its only $5". But in the end to design, make, market, and sale those shoes it may cost $40-$80 dollars.
 
Heh..you should see the markups on some of the new Mitsubishi Evos! Its retails for around ~30k, but some dealers are selling it for $50k!!!
 
I'm too used to computer parts prices. The other day I purchased a NEW i740 3D graphics card in it's retail box for $10.00! I had my choice of AGP or PCI for that price. The manufacturer made money on it, the guy who sold it to me made money on it. How can that be? Terminated cables for a couple bucks and floppy drives for $5.00. I'm spoiled!
 
When I worked at Staples, I noticed that Belkin USB cables sold for about $20, while the cost was $2.50. :Q Other things in electronics though usually just had a 10-15% markup.
 
my gf works at a jewelry store...diamonds see about a 100% markup
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I think that she must work at a cut rate store. my best friend ownes a very nice store and his markup is generally 400 to 500%.

It depends on how you look at it. If I buy something for $100.00 and sell it for $200.00 that is 100% markup. but if I have a article that retails for $200.00 and I give a 50% discount that brings it to $50.00 so it depends on which end you are looking from.

A rule of thumb is that a article must sell retail for at least 5 times the manafactures cost in order for anyone to make a profit.
Bleep
 
A rule of thumb is that a article must sell retail for at least 5 times the manafactures cost in order for anyone to make a profit.
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Now, if the CEO and executives didn't draw such high salaries, retailers could be even more profitable. However, CEOs can command great salaries - whether they can lead a company up ... or push them into the ground.

However, I think in Ornery's case, he's looking at something on a smaller scale. He would be in charge and wear many hats. However, I think retail is a tough business -- too many ups and downs. While the prospect of a nice profit seems lucrative, what if the economy drops even more? If you're in retail, you have a lot of inventory to worry about. Sure, a 300% profit seems attractive, but the items need to sell in order for you to make that profit.

 
Originally posted by: Ornery
Um, if what I was told is true, that tires are marked up 300%, then I doubt you got them for retail. I found that I could buy tires from The Tire Rack for a lot cheaper than I could locally, even with shipping. I'd still save a chunck of money having them mounted and balanced locally, but I sure as hell wouldn't get the damn things at even half price, let alone 1/3 or 1/4! I have a feeling The Tire Rack is bound by minimum price restrictions too. That, or that 300% markup isn't true. I have no way of knowing.
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I'll talk to my friend that owns the tire store this weekend and make sure that is still the case. I know when he opened the store 8 years ago it was. I'm sure it still is but I will verify.

 
When I worked at a local drug store, all the over the counter medicine, vitamins, etc.. ranging from tylenol, etc.. all had at least 100% mark up, or sometimes even more than that.

--Mark
 
Here is what my friend who works for Yokohama tire said:

Hey Aquaman - 300%? I wish! Using round numbers as an example, I figure that if
we sell a tire to a dealer for $50 he turns around and sells it to customers
for between $70-$100 at most so it might be 100% on the outside but usually
more in the neighbourhood of 50% I think.


Cheers,
Aquaman
 
Originally posted by: mAdD INDIAN
Heh..you should see the markups on some of the new Mitsubishi Evos! Its retails for around ~30k, but some dealers are selling it for $50k!!!
Click to expand...

50k for an EVO that has all the goodies stripped off. Oh wait they have two options a carbon fiber wing for ~480 and a sun roof. Then again aafter that 50k you still own a Mitsubishi. DOE!!!
 
If you want to see "retail markup" take a look at a Rolex Daytona watch...its MSRP is $6,100 however dealers regularly sell these for upwards of $11,000.....pretty good profit if you ask me considering the wholesale price of them is roughly $3K (any high end watch or other jewelery usually has a wholesale price of at least half of what the MSRP is).

Same thing for alot of popular Harley Davidsons, Vipers when they first came out, Mini Coopers, SVTs and other "limited" items....many dealers charge a "market" premium depending on supply and demand.

Generally you won't get excellent deals on luxury items however deals can be had if you look hard enough, heck I just bought a $300 Montblanc fountain pen for almost 50% off, which is rather unheard of as that brand is usually never heavily discounted....

I know of many other items where a retail markup is commonplace...sometimes it is only temporary until supply can meet or exceed demand, in other cases like Harley and Rolex they purposly limit production so that demand is always present which creates the illusion of exclusivity...
 
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