Retail Markup

[RoadRaven]

There's also a chance that someone buying from the sale will also buy something that's not on sale.

*points finger at self*
GUILTY

[Velobambina]

Maybe they needed a quick inflow of cash? I find it interesting, despite the fact that the email Terry sent to limited customers apparently encouraged folks to "share the news," that they did not send a mass email to ALL their customers. If they wanted to reward their preferred customers, seems that it would have been better to give each of those folks a special coupon code or something that would work only w/the customer's name. Seems like their available stuff has really been picked over---all the good things sold out. Not sure if inventory clearing to make way for new stuff was the real reason, since we are in the midst of the holiday season and the next "new" stuff would seem to be spring gear? Maybe it was an anticipation of a slow holiday shopping season, since that's forecasted?

If there's something I really want, I am willing to pay full price, too. Unfortunately, I've waited for sales in the past, only to discover that my size has been sold out either before the item went on sale or before I could get my order in at sale price.

I have to admit to being disappointed because I intended to put the snow leopard print cashmore top on my list for Santa. It's now sold out in my size. So is the Exte Ondo jersey I've been eyeing, but I have a couple places where Santa can still get it at full price.

[Grog]

I agree with all that's been said, and would add that it's also a way to get people shopping early for Christmas gifts. In smaller family-sized businesses, the pre-Christmas time can be HELL, and a tiny glitch at the last minute (a sick employee that doesn't come to work for a few days) can turn into a big nightmare. Perhaps they're trying to get people to buy NOW, even if at less of a profit for them, than later...

[snapdragen]

Retail markups can be pretty intense. When I was making and selling jewelry, I'd at least quadruple the cost of whatever item I was selling.

[Triskeliongirl]

But spadragon, were you factoring the cost of your labor into that?

[Running Mommy]

Ok, as a soon to be new bike shop owner, here is the deal..
On clothes it's usually around what they call "keystone" which would mean if it was 10.00 at cost the retail would be 20.00.
I've never heard of anything in this industry that gets higher than keystone.
Like someone said, if it was their own brand and they were just paying for cost of manufacturer, they would be making money even at 50% less.
As for the Gore and other brands, there are two possibilities. First they may have just been trying to clear out stock for the new stuff, as it's coming soon.
Second, they may also have scored some manufacturer close outs. Retailers can pick up some extra revenue if they get a sweet deal on close outs from the manufacturer. The manu is trying to get rid of it, so they basically unload it for cheap, and then the retailer brings it in, makes it LOOK like it's a markdown, and still makes some nice $$. BUT as a retailer you have to becareful with that. Sometimes closeouts bomb. There is a reason why they didn't sell in the first place ya know.
Now as for mark ups on bikes, they are MUCH less! Usually between 36-43%. And when you consider that most bike shops need to maintain about a 42% markup overall just to keep the lights on, well they aren't making a ton of money on bikes. So rest assured, most lbs owners aren't living the high life over that bike you just bought. In fact the place they make the money is in clothing, parts, and accessories. But even then most lbs' that I know try to stay competitve with the online market- which is very hard.

[snapdragen]

But spadragon, were you factoring the cost of your labor into that?

That's where I ran into trouble, I always undervalued myself!

[HillSlugger]

My running capris arrived today. They are marked "Spring 2006". This suggests they were clearing out old stock.

[HillSlugger]

I don't think we ever came up with a definitive "why did they do this?", but since this sale I've received several Terry email announcements and catalogs in the mail and I've made additional purchases. So, it's possible that the cost of the markdown is offset by obtaining a new, huge mailing list of confirmed buyers. Mailing lists are worth $$.