50% off? When stores reduce prices by 50%, they're still making?

Question

a profit, so how much profit do they normally make?

Answer 1

you really do not want to know.

Answer 2

Profit margins vary a lot. Fast moving items, food etc, with a lot of competition, would have quite low profit marginns to start with, so the scope for further discounts are limited. A lot of the special offers, 2 for 1 and so on , are manufacturers promotionns, and not necessarily the store cutting the price.
Things like clothing, furniture, jewellery. cosmetics etc, usua;lly have much higher markups originally, so the scope for reductions, sales , etc. are greater, whilst still maintaining a profit margin. All retailers have to be aware of the economics, and to balance turnover with profit at the end of the day. and to maintain adequate stock control.. No one gives money /goods away unecessarily. There is always a reason....

Answer 3

Usually stores reduce prices to turn stock and bring cash into the business. Historically January is a slow month for business and discounts are intended to increase sales and flow. Probably making covering overheads and wages at 50% off but may not necessarily all costs.

Answer 4

It depends on the item, but at 50% that in a lot of cases is them selling it at costs. So if you consider wages, running the store and all other costs other than buying the item, they aren't making a profit. What they are doing is liquidating inventory back into cash, and minimizing the costs verses keeping that unwanted item around for 11 months and trying to sell it next Christmas.

Answer 5

I used to work in retail, but it's been a few years. Generally retailers are making anywhere from 100-500% profit. We are not counting jewelry, that's muck larger. So if something costs the retailer $100, they are marking it from $200-$500. So if they reduce prices on the $100.00 item 50% they AT least still making $50.00.

Answer 6

Prices are inflated.Even sale at cost will make only loss ,if you add operating expenses.In the case of shoes ,suitcases the marked price is more than 100 percent more.Reduction sales are mostly cheating or selling old goods or non -moving stocks.In real sale a reduction more than 15% is not possible.Any how shopkeeper is not doing as charity work/social work.

Answer 7

(retail) * 50% - (what they pay for it) = (profit)

that is the profit .

this means that they pay less than 50% of the cost of the item that they're selling it for.

the profit depends on the initial price that they pay for the item. But of course it must be less than 50% what the item is being sold for to make a profit.

this will be the basic equation from Cambridge to Hong kong. Despite what such notable figures as local store managers say.

Answer 8

all of that might be right - Retailers also do loss leaders, so make a hit (less or no profit) on that particular item so that they get people in store to buy other items (how many times have you walked in to buy one thing and wondered out with more items)

Answer 9

Depends what you're talking about. Paying retail for jewelry is RIDICULOUS! I remember selling fine jewelry, and my discount for a $350 watch, I ended up paying $65! It was 40% less $75 or something crazy like that. So pretty much anything retail is a rip-off. The mark-up is HUGE!!!

What about a cup of coffee now?? It might cost them 15 cents. That's America!! -LL

Answer 10

Well, they dont nesscary make profit, sometimes they lose...

ex.)

I was a store manager of walmart and when we marked the price down to half off, we sometimes lost money due, and other times we broke even, and some times came ahead.... it just depends on the item....

Answer 11

their making profits by whoring around!