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.

That’s totally understandable. The numbers mean the same thing. I appreciate you taking time to make these. They’re really insightful.

I mean, yea this is what your typical Econ class calls it but I’ve seen it called a few different things in different businesses. The chain I work for calls it Gross Margin and Net Margin. We also use cost of sales. Typically restaurants I’ve managed call it COGS.

Edit: Nitpicking something as small as “cost of sales” vs. “cost of goods sold” is pretty pedantic.

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.

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.

I don’t know where you’re getting 6% from but I have never seen a retailer in this market pull 6%. I manage a medium sized chain and we run about 2%. Target pulls about 3%. Kroger pulls about 1.5. Walmart is usually around 2%. I’m very familiar with P/L’s in this industry and this all seems right.

Cost of sales does not include wages or overhead. Only purchases.

That wouldn’t really work. An acre of rice has something like 4 times the calories of an acre of wheat.