[sbuttgereit]

Back when I was in the retail industry, we saw nowhere near those kinds of gross margins (100% that is) on average (I worked in corporate management with ~4 chains and consulted to a few dozen others of varying size over a little more than a decade).

More typical gross margins were in the ~40% ballpark. Some higher/some lower; the entertainment retailer I worked with was averaging around 35%. That's not to say it couldn't be dramatically higher by business or product line, one of the retailers I worked for had a popular product closer to 95% gross margin (excluding the stupid crazy 50% shrink we were experiencing on that product)... but we were also manufacturing that product and the chain wasn't doing that well across the assortment.

[e12e]

Just to be clear, when you say 35% you mean you bought inventory at 10 dollars and sold at 13.5? And everything covering rent, pay other costs and profit you made off those 35%?

[sbuttgereit]

Actually, I didn't read the message I commented on closely enough.

In retail, we think of gross margin: (retail price - cost of goods)/retail price.

So, in your example we'd be just under 26% gross margin, not 35%. Regarding the original message I commented on, I looked at the percentages, ignored the example amounts, and presumed gross margin. So in reality, the gross margin there is 50%. Still higher than the averages I saw while I was in the industry (and I was mostly with B&M retail) and higher than the break even point for reasonably well run and conceived retail businesses. That's not to say those more common margins are comfortable for the retailer... more often than not they are cutting it pretty close to the edge much of the time.