[etchalon]

That's just not how the math works.

Let's assume an average marginal loss of 2% of gross sales to theft at a business with a net margin of 4% (typical of retail). Let's also assume wholesale markup of 50%, just to be conservative.

On two million in gross sales, a 2% loss equates to a $40,000. Assuming a 50% markup, the retailer has lost $20,000 in COGs. We'll ignore the other $20,000 for now.

On two million in gross sales, and a 4% net margin, the retailer can expect to make an annualized profit of $80,000.

We deduct the $20,000 in COGs loss, the retailer is now making only $60,000 a year, that's a loss of 25% in profit.

And that's using 50% markup.

In your stated case, with a 30% markup, the retailer would have lost $28,000 dollars in COGs, meaning the retailer is now making only $52,000, a reduction of 35% in net profits.

There is no universe in which this is a non-meaningful amount or to be dismissed as "well, something else has to be going wrong. Theft just isn't that big a deal."

[hnlmorg]

Those figures aren’t accurate (eg shrinkage is estimated at around 1.6% and theft is just one of many factors that contribute to shrinkage, so the actual percentage for theft is going to be even lower) but I’m done arguing with you because you keep taking my comments in bad faith, eg:

> Theft just isn't that big a deal."

That’s absolutely not what I said and if that’s the message you’re taking then you’re looking for an argument instead of discussing the facts.

So I’m done.

[NoMoreNicksLeft]

How many employees does it take to move $2mil in sales? That's not the owner running a mom-and-pop store with only him running the till, is it?

[etchalon]

For a retail location, 2 million might be a lot, or not very much. It's going to be incredibly dependent on what type of retail we're talking.