Madhu Menon wrote: > Srini Ramakrishnan wrote: >> We were charged Rs. 150 per 30ml, i.e. $93.75 for 750ml. A bottle of >> 750ml >> costs $6. A profit margin of 1465% > > Because, of course, a restaurant has zero setup and operational costs, > and import duties on liquor are nil too.
Nice counter-argument. You forgot the cost of liquor license and the occasional "baksheesh", recently legalised. If you were to distribute those costs to your sales, how would you do it? You cannot, hence the term break-even. At some point in time, every business breaks even. After that, the setup cost cannot be included in calculating profit. Secondly, even with operational costs and import duties, most (if not all) restaurants have high rates for drinks (not just the alcoholic kind). Try to BYOB, and the restaurant charges corkage. So what is really the operating model here? Wish I knew, or could find out...
