Just my two cents…
For brands that are manufactured in countries with much lower minimum wages than the United States.
- Cost = $4 or so
- Wholesale = Cost x 2 = $8 (4$ in profit)
- Retail = Wholesale x 2 = $16 ($12 in profit)
I bet you can afford to pay $16 for that item, it’s not that much.
In the US:
- Cost @ a minimum wage of $15 = $20
- Wholesale @ Cost x 2 = $40 ($20 in profits)
- Retail @ Wholesale x 2 =$80 ($60 in profits)
Greedy buggers. We all know that the retail markup is 100% profit for the retailer. So keeping the cost/wholesale/retail ratios the same just makes lots of profit.
Not that retailers aren’t making tons of profit on the jeans (or other items) that they have made overseas for $4 and that you paid $40 for.
How I think it should be:
If the profit margin is kept at more or less the same dollar amount as overseas manufacturing for items that are made here buying American made becomes a lot more affordable.
This would make:
- Cost @ a minimum wage of $15 = $20
- Wholesale + 10 = $30
- Retail + another 10 = $40 instead of $80
The ratio is now:
Cost 50% / Wholesale 25% / Retail 25%