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codybevans t1_j9ghm6y wrote

Reply to comment by PointyWombat in [OC] How Walmart makes money (they just released earnings for the fiscal year ending January 31) by IncomeStatementGuy

Tell me you don’t work in the the industry and have never looked at a P/L without telling me you don’t work in the industry and have never looked at a P/L.

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PointyWombat t1_j9gkyvn wrote

You're absolutely right.. I have no idea what I'm talking about here. I guess I just expected a larger net profit percentage that what is illustrated here.

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codybevans t1_j9gulj9 wrote

Typical net margins in the industry are about 1-2%. But that’s not ever really talked about because $20 billion profit sounds way better when people are referencing corporate greed. Nobody realizes how hard it is to even pull razor thin margins. Or the risk it takes to put that kind of money into a business in the hope you can make those margins. My store will do about 10 million In sales this year. The net profit will probably be right at 100,000. A 1% increase in wages and we are no longer profitable without increasing prices. It’s a balancing game where you have to be looking to cut costs anywhere you can while still being competitive in the job market.

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PointyWombat t1_j9ik369 wrote

This is enlightening. Thanks for sharing. I had no idea margins were actually as thin as that. Also, when you say 'the industry', are you referring to retail in general for consumer goods?

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codybevans t1_j9rgvh4 wrote

No worries. Most people don’t know because they’ve never needed to. And most of my experience is in retail and specifically grocery. Some sectors of retail do have higher margins. Home improvement, and some apparel companies for example. But I am not well versed enough in their operations to know a lot about them.

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