Your terminology is a bit flawed, here.Originally Posted by Alan H
If you have a Cost of Goods Sold, a 100% profit cannot exist. The only way you can ever achieve 100% profit is to sell something you have nothing invested in. If the kilt cost you $40 and you sold it for $1,000, even that would only be a 96% profit margin.
Your example would be a 100% mark-up, which would earn a 50% profit margin.
I know for years that most of the clothing industry could get away with those kinds of mark-ups, but I would guess things have changed considerably. I know in my own line of work, we could regularly see a 35% profit margin, but that was 20+ years ago. Today, we're struggling to keep that number close to 20%. And those involved in retail sales management will recognize that a 20% margin gets pretty skinny at the end of the month. We've gone from questioning if we might be able to make an extra point or two on a sale, to wondering if we can survive by cutting back another point or two.
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