Posted by Kurt M. on 9/3/2004, 10:53 am The numbers you listed seem to be gross profit percentages vice mark-up. A 35% profit on wine seems a bit high for me. It translates into a 55% markup when the average is between 30-40% (24-28% profit) depending on your area. 23% profit on beer is about right. The average is about 25% for a 6-pack, 20% for a 12-pack and 16% for a case. For spirits a 22% profit also seems just a bit high, ours is about 15-17% for half-gallon and 18-20% for 750ml. Keep in mind that each store needs to figure out their own profit depending on a number of things, which you are already familiar with. You may want to be careful when you purchase your wine and spirits stock. You know in MD certain products go off or on sale several times a year. Purchasing items during the sales month may allow you to pass the savings on to your customers. In our store we are very conscious of this and we still get some customer that remark that certain items are less expensive in the store down the street. Well, that just the way it goes, some items might be the same, some lower and some higher. Items that you purchase by the bottle, the other store might purchase by the case and save 50 cents a bottle, which is reflected in their price. I would not be concerned about occasional remarks, simply point out that you are trying to be competitive, not necessarily beat the other guy and that there are many items in your store that are less expensive than in the other store. There is absolutely no way to please all customers, regardless of how hard you try. In the end your income/profit must pay for your entire inventory, electric, insurance, salary, taxes and licenses and, of course, make a net profit for you.
Dave, regardless of how competitive you are, there will always be some folks that complain about prices. You could give an item away for free and someone will complain that they cant receive two. Keep in mind that its almost impossible to offer the lowest price on all items. The vast majority of customers dont necessarily look for only the lowest price; they look for selection and customer service first. Of course, it doesnt mean you can charge whatever you want.
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