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The True Cost


madman1366
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In an effort to put some things into better perspective for people, our bosses at work began recently to share some usually unspoken details about store pricing. I think some folks here might find it rather informative.

 

Most of us I would say get a lot of our figures from a big box retailer, and that is where this is is centered. Big box retailers take a loss on most of the grocery items they sell, thinking that they will make up for that by selling more throughout the rest of the store where they make all profit on those items sold.

 

In other words, how much in terms of dollar amounts a store earns in a day is not as important as what they sold the most of.

 

Basically, most hardline/softline items are sold at 60-80% profit, some going into the 90% range. Those gains, help cover the losses on the grocery end among all the other things. The problem is, Walmarts and Targets have been selling a lot more grocery, and a lot less of the rest that needs to sell to be profitable. That's one big reason why we're seeing the soaring prices.

 

 

Now, I would expect that Transformers would probably fall toward the lower end of that average, but still highly profitable. But what people should also know is that we're not paying for the transportation and most other commonly known costs, we're also paying so people can enjoy cheaper groceries. Now I don't know if people find that to be a good thing or a bad thing, but there it is.

 

So next time we're taking the rising costs of various things into consideration, there is at least that one more big factor here to remember, and one more cost to worry about raising. So if oil prices go up, we pay more. Gas prices go up, we pay more. Transportation costs go up, we pay more. AND if food prices go up, we pay more.

 

Just thought some might find this interesting. I kinda did.

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Well, I spend alot more on groceries than I do Transformers, so I reckon this works to my benefit. I do wonder how some grocery stores stay in business though....

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I'm fully aware how the usa based large retail stores work. as I use to work for LOWES for 3 years. I quit that job 10 years ago because I was only getting $11.25 per hour. I got another job & have been their for over 10 years, that currently pays $35+ per hour.

Edited by Shadowpanther
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I'm not surprised, I'm just curious as to why Target set the Deluxe DOTM price to $30 and then to $16 while Walmart conitues to try and sell them at $7.27. It is crap like that that does not make any sense to me

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I'm not surprised, I'm just curious as to why Target set the Deluxe DOTM price to $30 and then to $16 while Walmart conitues to try and sell them at $7.27. It is crap like that that does not make any sense to me

 

Probably just a case where Walmart is stuck with a helluva lot more they're trying to get rid of.

 

See, over the past 10 years, while the working mechanics have been the same, we're really now feeling the pinch. 10+ years ago, big box sold grocery at more of a break even point. The amount of loss has grown over the years as prices have risen and the retailers are struggling to remain competitive with each other even it it means taking tougher losses on the grocery side to do it.

 

People are buying the groceries a whole lot more for the savings and buying a whole lot less from the rest of the store. That's a trend that has been squeezing retailers more and more as time goes. People just aren't spending on luxury items like they used to.

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Well that makes a little sense, but I'm not sure about luxury items as most of the furniture is crap anyway LOL

And each time I go to Walmart, the Target here is not half grocery/ half hardlines. But every time I go I have never seen someone just get grocery. I just think its also the venders who are trying to raise prices to line their own pockets more than it is people not buying luxury items

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I'm not surprised, I'm just curious as to why Target set the Deluxe DOTM price to $30 and then to $16 while Walmart conitues to try and sell them at $7.27. It is crap like that that does not make any sense to me

 

My guess is,this was some sort of a mistake in the computers.

Edited by Shadowpanther
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Well, I spend alot more on groceries than I do Transformers, so I reckon this works to my benefit. I do wonder how some grocery stores stay in business though....

 

Basically they charge more for "Gourmet" food. Go to any Alde's "or any other discount grocery store" and look around. Sure the milk and produce will have some decent prices, but the more decedent items will have a huge price markup.

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Yeah working retail and having access to a price scanner changed me. Seeing how much the retail store paid for it from the distributor and how much they are re-selling it is disturbing.

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Toys, in general, are sometimes used as a lure, meaning that sometimes not a lot of profit is being made by the big stores. The idea is that toys are used to lure parents in to buying them in hopes that they will pick up other higher profit items while in the store.

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