What's the mark-up on cycle clothing?

[GrumpyGregry]

I do not agree with this statement. The customer should be aware to some extent of the true cost of producing the goods. If the person producing the goods is getting ripped off and the end buyer of the goods is also getting ripped off, then what does this say about the middle man?

An informed consumer always is*. Less that 1 in 100 consumers give a tinkers cuss. They just want the bling "gimme, gimme, gimme, I need it and I need it now"

*Which is why I won't pay list for stuff from people like Rapha. (or others "labels" in non-cycling contexts.) I've been on visits to the sweatshops, and the nicely air-conditioned factories too tbh, of Dhaka, Bangladesh.

 

[rollinstok]

It often amazes me that people who have little clue about the market etc think that retailers should be more altruistic, and make the minimum possible profit in order to help the consumer. They forget that people are in it to make money, not provide a public service.

The same people can be found writing indignant letters to the local papers complaining that 100k plus council executives should be paid the minimum wage.

There is nothing wrong with making money. There is plenty wrong with sheer greed and profiteering.
I was in business to business sales for over 30 years and the accepted profit margins for any company of this type is between 35 and 40%, this is enough to keep any company strong with good returns for the owners and fair wages for the staff.
Business people are savvy and understand market forces and fair play with each other. When it comes to retail, the customer is shat upon from a great height, the great pity is most of them are unaware of it.

 

[rollinstok]

So you'll happily take advantage of your customers' ignorance?

Seems completely at odds with your earlier posts.

Ha ha.. got me there.
No I wouldnt do that.. honest !!

 

[screenman]

What absolute tosh, regardless of what it costs to make, how much does it cost to sell. Now that is a concept very few people who have not run a business and in fact many that have do not know.

Let us start a list.
Rent
Rates
Insurance
Advertising
Wages
Packaging
Decorating
Fuel
Heating
Electricity
Transport
Staff Holidays
Staff sick pay
Accountant fee's
V.A.T
Import Duty
Import clearance fee
Sponsorship
Returns/warranty
And the list goes on and on all has to be paid out of the margin on what you purchase, profit comes right down the bottom.

For anyone running a business these few words were told to me years ago after turning over a 7 figure number in a year without a profit, and those words were. Turnover for vanity profit for sanity.

 

[rollinstok]

Overheads are a fact of life for any business.
It is no accident that every high street, retail park or shopping centre in the UK are pretty identical to the next one. The retailers that you find in these identikit centres enjoy immense profits on almost every item they sell.
A famous furniture retailer offers 4 years interest free credit and nothing to pay for a year on a 3 piece suite costing £2500...delivered in 6 weeks... they pick up the phone and order one in from China at £170.
I recently bought a Ritchey pro stem for £22 delivered, high street price £39.99. The company I bought it off did not pay less than the high street shop. They simply have a philosophy of enjoying success through moving stock at a fair price, and best of luck to them too.
My rants are not directed at the little guy who runs his local bike shop, but big business which exploits the little guy customer with a home to run and the overheads that comes with.

 

[The Jogger]

Should the retailer be made aware of how much disposable income you have before deciding what to charge you?

You seem to forget one fundamental thing here, it's the customer that picks the retailer not the other way around, although in some retail establishments you go into, you would think it was the retailer allowing the customer to buy from them!

 

[fatblokish]

Value of goods is what the buyer is prepared to pay. Mark up is none of the customers business. Never has been. Never will be.

Not quite accurate. I have worked in the construction industry where such matters can be completely transparent, to the extent that the mark up and base cost of goods, works and services are openly stated and tendered using the NEC Option C for of contract. I'd estimate that tens of billions of pounds are spent annually in the UK on this and similar types of contract.

 

[GrumpyGregry]

Not quite accurate. I have worked in the construction industry where such matters can be completely transparent, to the extent that the mark up and base cost of goods, works and services are openly stated and tendered using the NEC Option C for of contract. I'd estimate that tens of billions of pounds are spent annually in the UK on this and similar types of contract.

Simple a transparent, negotiated, way of determining what the buyer is prepared to pay surely?

 

[Nearly there]

I used to work for a large retailer and our delivery print outs of stock received used to list the cost of items bought and the price we sold them at and some items were 100% mark up for example our own brand jeans were £4 at cost and sold for £8 in store however Wranglers cost £12.50 and we sold them for £19.50 which was still massively less than the high street.When it was sale time many items at 100% mark up were sold at half price(cost) but many were sold at less than cost when halved.If you go into a shop and they advertise an up to half price sale you can bet nothings being sold at less than cost.

 

[fatblokish]

Simple a transparent, negotiated, way of determining what the buyer is prepared to pay surely?

Absolutely, (although normally tendered instead of negotiated) but the mark up is very much the customer's business.

 

[rollinstok]

Many business to business transactions are negotiated with the interests of both the selling company and the buying company being respected and considered.
Its usually a healthy, transparent relationship that is carefully nurtured to a position of mutual trust.
Prior to the dumbing down of our population, we traded with a barter system which is very similar to the way companies do business with each other today.

 

[screenman]

It is not profit on every item have you heard of lost leaders etc, it is margin not profit. Profit is what is left at the end of a period say a month or a year or even 10 years.

 

[rollinstok]

Ive heard of loss leaders. Loss leaders are exactly what they say.. there is no profit or margin ( profit can be determined on every item sold as well as a whole over a given period )
Companies that use loss leaders habitually are taking a huge risk as they need the specific customer to buy other items at an acceptable margin to make it remotely worthwhile.

 

[screenman]

So a shop sells an item with what you call a profit of £10, I call it margin. Now at the end of the year due to overheads the shop makes a loss of say £10,000. See, no profit in everything they sold that year.

 

[GrumpyGregry]

Overheads are a fact of life for any business.
It is no accident that every high street, retail park or shopping centre in the UK are pretty identical to the next one. The retailers that you find in these identikit centres enjoy immense profits on almost every item they sell.
A famous furniture retailer offers 4 years interest free credit and nothing to pay for a year on a 3 piece suite costing £2500...delivered in 6 weeks... they pick up the phone and order one in from China at £170.
I recently bought a Ritchey pro stem for £22 delivered, high street price £39.99. The company I bought it off did not pay less than the high street shop. They simply have a philosophy of enjoying success through moving stock at a fair price, and best of luck to them too.
My rants are not directed at the little guy who runs his local bike shop, but big business which exploits the little guy customer with a home to run and the overheads that comes with.

I would not be so sure about that. Depends on the on line dealer but the volumes they shift tends to mean they can negotiate bigger discounts with the distributor.