Ok, Drudge linked to a Bloomberg BusinessWeek article that tries to make the argument that shoppers aren’t really getting a deal during the Christmas season because these retail outlets are making an 11% profit margin during the season rather than their normal 9% profit margin. Well, DUH! Somebody at Bloomberg BusinessWeek has failed math.
Sure, they are making more. They don’t call this Black Friday because Americans Corporations are racist. They are making more on volume. Their operating costs stay the same, but they are selling a lot more. Even with loss-leader items, people still buy the other items in the store which are not discounted.
“For every $98 flat-screen TV, there’s plenty more to buy at a 98 percent markup.”
Well, shock of shocks! Retail outlets that have to pay a bunch of employees wages, employee taxes, license fees (if they are a licensee outlet), business license taxes, property taxes, healthcare benefits, healthcare taxes, middle management wages, management wages, all on top of the shipping costs and actual costs of the product are actually marking up their products enough that they can actually cover these costs and stay in business.
I guess I shouldn’t find it odd in a country that “graduates” high school students that can’t think for themselves also graduates college business students that don’t understand basic economics.