Retail Markup

[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 $$.