Selling internet SERVICE is different than selling a PRODUCT. Your
costs are not in the hard costs of the product, leases, etc. it's in
the monthly costs (bandwidth, servers, employees, credit card
processing fees, etc.). So your "gross profit" is going to be much
higher than Walmart or Target, because their biggest expense is Cost of
Walmart's Net Profit for 2005 was 3.6%, which translates to $10 billion in profit.
On Sat, 27 Jan 2007 17:06:21 -0700, Travis Johnson wroteI just read the USA Today article from 2003. It says the namebrand items provide 15% profit while the private label items provide 30% profit. Those are HUGE margins for a company now doing a billion a day in sales.I don't know where those numbers come from, but I know that some of thier stuff sells for definitely less than those markups. Perhaps some sells for more and makes up the difference. ' I really don't see how you can call 15% huge. It's very small. Nobody I know of that's doing well in the retail business of commodity items is selling things at those margins. Remember, just because the markup is 15%, doesn't mean the actual profit is. Overall, Walmart isn't making huge percentage profits on the gross sales.I agree they have gotten where they are because they can operate on very low margins and are very efficient. This is the reason all the small mom and pop places have gone out of business... they can't figure out how to operate on less than 50% margins... or they don't want to.Well, for my $38 account, I know I have less than $10 fixed expenses, including all the leases, etc. The only thing not factored into that is equipment replacement costs, as I really don't know what that's going to be long-term. I really do expect to make a 50 to 70% profit on sales in the future. And that's not going to make me rich in any sense of the word. Different market, different service, different universe. :)Travis Microserv wispa wrote:On Sat, 27 Jan 2007 14:27:22 -0800, George Rogato wrote Blake Bowers wrote: You know, the only real difference between WalMart and most other retailers, is that what the manufacturer agrees to do, WalMart holds them to. Rubbermaid, Vlasic Pickles, Bicycle makers, the list goes on and on. All of them agreed to do X, Y, and Z and each found out they had agreed to do things they didn't know how to do, or could not do.Many companies agreed to sell to WalMart at less than their cost, and went broke trying to keep up with demand. WalMart is a huge market. They sell in 3 months what the next largest retailer (the second largest retailer, that is) in the world sells in a year.Walmart insists that prices must FALL, not rise, and that they must be competitive. Walmart's profit on some items is on the order of 1 to 5%, and those are not large items, either. They DO their part in passing on revenues to manufacturers. Nobody exists on slimmer margins than WalMart does. There's a trail of ! dead or damaged companies in WalMart's wake, but it wasn't Walmart that did it to them. It was their own greed or incompetence, when they were offered a chance at the largest retailer's shelf space in the world, and took it in terms they could NOT sustain. There's a lesson for all of us in that, in that we really SHOULD know our capabilities and have a plan to deal with both growth and competition. Can we handle success? Can we keep our word, do we know our own selves well enough to make our plans and stick to them with discipline? Will we promise what we can't deliver, if it appears to promise us growth?Every company that sells products to WalMart knows exactly what they're expected to do when they start out. Many think they can get concessions, or have unrealistic expectations. I spent quite a bit of time reading about this... And I resolved at that moment, no matter what the future, I resolve to know what I'm doing, where I'm going, and what I and my company can and cann ! ot do. I sort of turned over a new leaf after reading and digesting. It was a good way to start 2007. Inspired by WalMart, no less. Hate them if you want, but I don't and can't. They're a breath of fresh air in a world of fudging, loose focus and blind ambition. They have an absolute resolute goal they have never wavered on, and that has always been the customer. WE need that kind of discipline and focus, too, as companies and individuals. NEver forget what we're here for. The pickles... The famous pickles. Got to love it. You tie the pickles with thebankruptcy, when every industry analyst, all the business mags, Vlasic themselves,all agree, Walmart or the pickle deal was not a critical factor in their bankruptcy. Not sure about pickles, but I have heard the "Rubbermaid" story. Walmart, dropped Rubbermaid off at the door of bakruptcy. Popular story about the way they do business.All Walmart business practices do is give everyone an example of extreme agressiveness of those ! sharks out there.-- WISPA Wireless List: [EMAIL PROTECTED]/Unsubscribe:http://lists.wispa.org/mailman/listinfo/wirelessArchives: http://lists.wispa.org/pipermail/wireless/ --------------------------------------------Mark Koskenmaki <> Neofast, IncBroadband for the Walla Walla Valley and Blue Mountains541-969-8200 -------------------------------------------- Mark Koskenmaki <> Neofast, Inc Broadband for the Walla Walla Valley and Blue Mountains 541-969-8200
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