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In the old retail model, the markup is so high that they basically don't care about waste, factory cost, or logistics.
by throwaway4good 2y ago
In the old retail model, the markup is so high that they basically don't care about waste, factory cost, or logistics.
- lotsofpulp 2y agoThat does not make sense per real world profit margins. Broad market retail businesses earn sub 5% profit margins (except Home Depot, which seems to be an exceptionally well run operation). If you are spending 95%+ of every dollar you earn, then surely you HAVE to be cognizant of waste, logistics, and COGS in order to stay in business.
- throwaway4good 2y agoThe big costs are staff and rent. I was referring to the markup from the factory cost to the sticker price - that is very high in clothing. It can still be money losing business if you are not selling enough.
- lotsofpulp 2y agoIt is only because the retailer cares about factory cost that the retailer can afford the staff and rent. Even paying the relatively low factory cost, the retailer can barely eke out a profit, so they must be discerning about the price to quality ratio of the clothing they are buying to retail to the public.