[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.