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Where does the $100 for shoes go?

November 12, 2011
Let’s say a sports shoe costs about $100. Yes, I know they are more expensive than that but $100 is easier to work out!

Where does the $100 go ? These are approximate $$ and it’s different for smaller store and big chains, but let’s take some liberties with some general figures.
$60 – Suppliers $60 – on average the markup is about 40%
$15 –  Rent – you might think 15% rent is excessive and I agree, but that’s what some shopping malls are charging
$10 – Wages – especially with penalty rates for weekends getting higher every year.
$10 – Expenses – all other general expenses including electricity, marketing, rates, shop supplies
$5  – Business Owner – what, only $5!
Now let’s discount that shoe 20%. Who misses out?  First to go is the Business Owner’s share, trim the wages a little, try to cut expenses because sure as shoes the landlord or the supplier isn’t coming down in price.
I’d love to sell shoes at a lower price but you can see there’s nowhere to move.

From → Shoes

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