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Nothing you said in this post addresses why margins need to be a relative percentage instead of an absolute amount, which what the post you're responding to bri
by seneca 5y ago
Nothing you said in this post addresses why margins need to be a relative percentage instead of an absolute amount, which what the post you're responding to brings up. You seem to be talking about the general concept of credit. I understand that there's an unstated "every dollar you spend costs you X in financing", but that's not clear from your post.
I'd also strongly suggest Goldratt's lectures, titled "Beyond the Goal" over the Goal itself, as the novel is pretty thin on useful information comparatively.
- fsckboy 5y ago> Nothing you said in this post addresses why margins need to be a relative percentage instead of an absolute amount 1. nothing you said here refutes anything I did say. 2. you made no case for margins that would be independent of costs 3. I did make a case for why at least a portion of margins would would be relative to costs, which would make margins relative to costs. 4. also I did mention equity which means I did go beyond credit, and equity rates of return vs credit rates of return are the same math, it's just the discussion of financial risk that I left out because it is a complex subject also I added an addendum based on your criticism. You should say how you think this should work so people can learn from you.
- antattack 5y agoI am guessing it's due to ROI. Your more expensive product requires higher profit for ROI to stay the same.
- user_named 5y agoIt's actually because retail markup is about 2.5x on top of wholesale. The difference pays for rent, salaries, marketing, margin for discounts, and so on.