Discussion
Ive no idea why - I was just musing and the thought occurred that retailers of differing sorts will always have different markups for the products they sell. Of course - this will vary in line with volume sold, rents etc but I asked myself what would most likely be the single most 'marked up' item for sale in the UK marketplace. Ignore stupid short term loans or optimistic futures - I am looking at physical goods that are exchanged for cash.
Using all the power of my brain - itself addled by cheap booze - I have 2 possibles
1) greasy spoon cup of tea - £1 - one teabag, dash of mild, hot water ~ 10p = 1000% increase
2) icecream van '99' - £1 - one cone, dollop of cream ~ 15p = 850% increase
note that my maths is mainly guesswork and I appreciate a capital outlay is necessary to generate the sums mentioned; Thats the point though - which initial investment - no matter how short lived - could possibly best the examples above??
Using all the power of my brain - itself addled by cheap booze - I have 2 possibles
1) greasy spoon cup of tea - £1 - one teabag, dash of mild, hot water ~ 10p = 1000% increase
2) icecream van '99' - £1 - one cone, dollop of cream ~ 15p = 850% increase
note that my maths is mainly guesswork and I appreciate a capital outlay is necessary to generate the sums mentioned; Thats the point though - which initial investment - no matter how short lived - could possibly best the examples above??
a fair one - to be more specific - having paid for the infrastructure to generate the good in question - and not including the cost in raw material or method of delivery including labour. Which single good would see the most profitable reward for my efforts?
Edit - and a realistic cap too - I appreciate a few tens of millions will buy a chip fab but thats beyond the scope of the individual...
Edit - and a realistic cap too - I appreciate a few tens of millions will buy a chip fab but thats beyond the scope of the individual...
Edited by paolow on Wednesday 5th November 01:05
Most manufactured goods work on a 7-10x cost principle.
Of course, remove VAT/Import duties/distribution costs, retailer/distributor margins, and it's not hard to see that the manufacturers themselves aren't making all the money those numbers would suggest.
Suddenly the potential £900 margin on a £1K telly doesn't look so unreasonable!
Of course, remove VAT/Import duties/distribution costs, retailer/distributor margins, and it's not hard to see that the manufacturers themselves aren't making all the money those numbers would suggest.
Suddenly the potential £900 margin on a £1K telly doesn't look so unreasonable!
Ok, its not the worst, but I picked up an official England FA childrens T-Shirt the other day. Ok, its the 2007 one, but it was reduced from 44 quid to 3.5. Yep, thats less than 10% of the original price.
So it then begs the question of exactly how much money mark-up was there on the original shirt and exactly how many people paid the full price. I suspect that even at 3.5, the retailer was making money - a small amount, but still made money.....
NOW THAT'S A BIG MARK-UP!
So it then begs the question of exactly how much money mark-up was there on the original shirt and exactly how many people paid the full price. I suspect that even at 3.5, the retailer was making money - a small amount, but still made money.....
NOW THAT'S A BIG MARK-UP!
PJ S said:
Most manufactured goods work on a 7-10x cost principle.
Of course, remove VAT/Import duties/distribution costs, retailer/distributor margins, and it's not hard to see that the manufacturers themselves aren't making all the money those numbers would suggest.
Suddenly the potential £900 margin on a £1K telly doesn't look so unreasonable!
AV exists in a nearly perfectly competitive market. Of course, remove VAT/Import duties/distribution costs, retailer/distributor margins, and it's not hard to see that the manufacturers themselves aren't making all the money those numbers would suggest.
Suddenly the potential £900 margin on a £1K telly doesn't look so unreasonable!
Most sets, especially the fast moving lines are sold at under 10% nett nett margin to the retailer.
42" especially there is f
k all in.Plotloss said:
PJ S said:
Most manufactured goods work on a 7-10x cost principle.
Of course, remove VAT/Import duties/distribution costs, retailer/distributor margins, and it's not hard to see that the manufacturers themselves aren't making all the money those numbers would suggest.
Suddenly the potential £900 margin on a £1K telly doesn't look so unreasonable!
AV exists in a nearly perfectly competitive market. Of course, remove VAT/Import duties/distribution costs, retailer/distributor margins, and it's not hard to see that the manufacturers themselves aren't making all the money those numbers would suggest.
Suddenly the potential £900 margin on a £1K telly doesn't look so unreasonable!
Most sets, especially the fast moving lines are sold at under 10% nett nett margin to the retailer.
42" especially there is f
k all in.It's not like the manufacturers are making £800 profit all for themselves, or the likes of yourself, Der, and Currys/etc are making £300 a piece.
paolow said:
1) greasy spoon cup of tea - £1 - one teabag, dash of mild, hot water ~ 10p = 1000% increase
no where near that mark up, my old dear owned a number of snack bars and there's no way that amount of profit in a cup of teabooze is easily the biggest profit generator - bottle of lager from supplier <£1, to you sir, in a club £4
tomTVR said:
Paitings and other artwork must have a fair old markup on it.
Standard ltd edition prints from the better publishers are double plus vat.Antique paintings would be marked to whatever the dealer felt brave enough to ask.
Some times he will find a "sleeper" in auction and pay a few hundred. He knows its worth and sells it on making thousands.
I think you are talking gross margin - i.e. the difference in the cost of raw materials vs. the price the consumer pays.
I always thought soft drinks were the highest.
1-2p of Coca-cola concentrate for a £2 pint of coke; so a 99% GM.
Sleep Envy - where was your Mum buying her tea bags? PG Tips is £3 for c.150 bags so 2p each. Water - essentially free, so in all a 98% margin if you sell it for £1.
I always thought soft drinks were the highest.
1-2p of Coca-cola concentrate for a £2 pint of coke; so a 99% GM.
Sleep Envy - where was your Mum buying her tea bags? PG Tips is £3 for c.150 bags so 2p each. Water - essentially free, so in all a 98% margin if you sell it for £1.
If we're talking about a premises then you're forgetting the leccy/gas bills, Fuel bills (if mobile), property rent, insurance, staff, apparatus for making tea or ice cream, building and machinery maintenance, protection rackets, etc.
This would have a bearing on your Nett profit which is actually the type of profit which means the most.
Gross is nice to look at but Nett is the real picture.
However if we're talking about burger vans in a layby then a lot of these "overheads" dissapear after the initial outlay. Leaving behind Fuel to get to the layby, fuel for the genny, gas for the griddle, cost of car tow van, cost of burger stand then bacon, sausages, buns, french sticks (posh I know), cheese, mushrooms, eggs, tea coffee milk sugar soft drinks.
THEN watch the money roll in if you've picked a good spot.
This would have a bearing on your Nett profit which is actually the type of profit which means the most.
Gross is nice to look at but Nett is the real picture.
However if we're talking about burger vans in a layby then a lot of these "overheads" dissapear after the initial outlay. Leaving behind Fuel to get to the layby, fuel for the genny, gas for the griddle, cost of car tow van, cost of burger stand then bacon, sausages, buns, french sticks (posh I know), cheese, mushrooms, eggs, tea coffee milk sugar soft drinks.
THEN watch the money roll in if you've picked a good spot.
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