Mark up on every day products

Electrical supplies have a huge markup, it's insane

A glass of sweet tea at a restaurant has to be the most profitable thing in the world.

It costs my company 2 cents to make those plug-in fresheners. I make millions per month.

Don't forget overhead.

quote:

---

A glass of sweet tea at a restaurant has to be the most profitable thing in the world.

---

I would guess a glass of unsweetened tea is more profitable

It costs $.06 in ingredients, but how much was the wages of the person who made it?

I have to set prices all the time, and I have to defend them, especially when people google the part and ask why I am double the price it is on eBay. First off, it costs me $20 per customer on average to acquire the job. Then I have insurance, and vehicle costs, inventory costs and taxes on inventory, and shipping charges for inventory. So I am on average -$45 per house I go to. I charge $59 for a service fee so if someone declines the repair after I spent forty five minutes on their machine trying to figure out a tricky problem I make $14. Now that is rare, but it shows how low my margins can be.

Now when it comes to parts, I don't really rip people off, I mark up retail 15% and pay wholesale. So if you see a wholesale price online (or often less than I paid) you can't be upset that I am charging more for a part I have on me compared to a part you have to mail order that no one stands behind.

Sure there are items with huge mark-ups, but the Key in retail is 100% mark-up. You have to expect that everything you buy was bought for half of what you paid by the person who sold it to you.

Though you will sometimes come across 15% markup and other times come across 1000% mark up. A good case is agitator dogs. Very common part $0.75 a set. Parts cost in house is $25. A much bigger mark-up than the bread, yet I even find that my prices is less than the suggested retail of $40. People will pay what th supply/demand curve dictates.

If by profitable you mean a high margin of return on investment then yes. A $2.00 ROI for a soda is 500-700% but a restaurant is only netting $2 per soda sold. This means they would have to sell 500,000 units for a GMROI of $1M. In contrast, more expensive items may have lower margins but may be more profitable due to their higher cost.

For example, suppose an item is purchased for $1,000 and sold for a total of $1,200. To calculate the return on investment,divide profits ($1,200 - $1,000 = $200) by the investment cost ($1,000), for a ROI of $200/$1,000, or 20%.

If the same GMROI is $1M, you would only need to sell 5,000 units to reach your goal making this scenario technically more profitable.

quote:

---

They make it in house for 6 cents.

---

That may be the cost of the dough but you have to factor in the cost of the oven, electricity/gas to heat it, the cost of the building, labor costs, operating costs (insurance/taxes etc) and the a/c to cool the building because the oven is hot.