How can retail stores discount everything in their inventory 50% (like Kohls and Penneys) and make a profit?

Answer 1

they mark up the prices the first time its for sale

Answer 2

They still make a profit because, the price they pay for their merchandise is far cheaper than the price you, the consumer, has to pay. For example say a company can create T-shirts for 25 cents a piece. They sell those shirts to stores for about 1 dollar a piece. The store turns around and sells the shirts to consumers for about $10-$20. So if a store has a sale that is 50% off they are still making a profit.

Answer 3

A retail store like Kohls or JC Penneys get items much much cheaper than you think. They buy stuff at cost, Just like every other retail store such as Best Buy. Kohls will sell something for $20 that they get for like $4 or $5(Because they buy soooo much of it) and even at 50% off they are getting double the price that they are buying it at.

Answer 4

I can't speak for big box stores, but my friends mother had a simple formula --> 2x cost + 10. A 50% discount still leaves room for profit.

Of course, the real price can be based on what the market will bear, so if something was in high demand and she had limited quantities, the price was higher than the standard formula.

Answer 5

Most stores mark up items 75-%-85% of cost. This means if they reduce it by 50%, they are still making marginal profits. Another trick to this is that they keep the 50% reduction only on select items, as to entice shoppers in hoping they will buy more then what they originally came for.

Answer 6

Well, in retail, you basically try to "keystone" your products, which means that you sell it for twice what you paid for it. A 50% sale is then pretty close to what they paid for that product.

In addition, their motivation may not be a profit on that item. They may sell some items at a loss so you'll come into the store (Walmart does this all the time). They also might realize that the item isn't selling, and they're just trying to dump it for whatever they can get outta it.

Answer 7

by selling more quanity than normal..that is why all the store have crazy hours during these sales. Pluse most retail prices are marked up so much that taking 50% off still doesn't make the product cheaper than the store bought from the supplier.

Answer 8

Because they usually pay ten percent of the price on the tag. If you buy a shirt for $30, the store probably paid $3 for it. If they mark it down 50 percent to $15 they still make some dough.

Answer 9

All stores can! I own the retail store I work at and I double everything. Material is very cheap. Especially to make clothing. It only cost a couple of dollars.

Answer 10

up the prices,