Cost, Wholesale and Retail Pricing

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%

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