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RE: Saving the economy by decreasing marketing margins
I know it sounds harsh and selfserving but that is one slaughtering i don't mind seeing. Afterall if the big mark ups deminish to say 20% the home (USA, EU) manufacturers will again become more competitive and thus eventually again favoured by the end consumer. And this is what i'm hoping for as it'd stimulate R&D.
If i understand correctly you are saying that 40% of your retail price is profit? Which'd mean a factor of 1.8 from the whole sale price. I have been observing for a while now that many things are cheaper in USA than in EU, but i didn't realize it has been so for 25 years.
Jeepers no - I'm saying that with an average 50% mark up a well run business rakes in 20% after expenses like wages, rent, taxes, and a bunch of stuff like power, phone, internet, stationery etc.
Keep in mind that is not on top of wages paid to the owner - that is the owners only income. If the average mark up drops below about 50% a retail business is screwed, which is why something like 80% of new businesses go bust in the first five years...
Ok, 20% is insanely low... Does that even create any cushion for possible ''crashes''?
I'm currently working on a physical product and am aiming for 30% profit - from the wholesale price - and the retail store would have a market factor of 3-4 (prior to shipping, etc.).
May i ask in which sector (toys, food, appliances, etc.) is your retail store?
20% is pretty OK, most business make less. No it doesn't create much cushion though!
We had a bike shop from 1991 to 2000 and it was the only bike shop in Wellington to avoid going bust - http://www.frot.co.nz/cs/cycle_services.htm#history
Now we have an online business selling food supplements - http://www.naturefoods.co.nz/
Oh NZ! I hear import taxes are murtherous.
Congratulations on being the last man standing :) did you then sell the shop for larg summs?
I went the AM route a few months ago (because my budget was too low to start selling my own products retail - but that project is still pending).
Your online shop is nicely organized and looks tidy. How's CTR and conversion?
I must say i love dark themes and have used a darker theme for a while but was later told light themes ''inspire'' more thrust. Did you do any testing on that? I haven't had the chance yet but will try it in the future as i'd preffer to use a dark theme.