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General Asylum General audio topics that don't fit into specific categories. |
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In Reply to: Your Math is Correct, But You Conclusion Is Not posted by Charles Hansen on October 23, 2017 at 18:41:30:
"The single company in the world that operates with the lowest gross profit margin is Costco. Their margin is a flat 18% on everything. "
I'd have to say THAT premise is incorrect.
Last place I worked "for" was a manufacturer of floor & roof trusses. Of the many hats I wore at one point or another were purchasing manager, estimating manager, and occasional sales.
Even with our substantial overhead, massive (union) labor costs, and whatnot - our "do or die," "break even" margin was 12%. We certainly shot for higher. GM & above grumbled at anything 15% or below. They shrugged at 18 to 20%. Quickly said YES at anything above 20%, and rejoiced if something went out the door at 30% or beyond. Not much pulled in 30%. I.e.? In a given month, perhaps material for a 2 car residential garage and a few spec homes would go out at 20%+ margin (say, $65k to $100k), while $1MM to $1.5MM for continuing project work under contract would be sent out at often 15% or less. That's TIGHT.
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Follow Ups
- RE: YThe single company in the world that operates with the lowest gross profit margin is Costco. - David S. 10/24/1707:12:44 10/24/17 (2)
- RE: YThe single company in the world that operates with the lowest gross profit margin is Costco. - Charles Hansen 12:09:05 10/24/17 (1)
- RE: 10% net margin - David S. 14:10:14 10/24/17 (0)
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