luke strawwalker
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$80 gross profit on a $600 sale is just over 13%. That is horrible for retail.... Figure a 2-6% retailer credit card transaction fee... you make nothing..So to make any money you are investing a ton with little ROI.
Paints, glues, tools and wood are 40-60% markup. Do the math...
Jerome
Ok, I see your point... but I'm still scratching my head...
You make a $600 RC setup sale, and pocket $80 bucks profit...
You sell a hobby knife or bottle of glue and pocket, say $3 profit (at say a 60% markup on an item costing $5 bucks)... you have to make 27 sales of the cheap stuff to match the profit (roughly) of the single large item sale, even at a lower profit margin... (using your example and percentages).
Granted, selling a bottle of glue or a hobby knife requires less knowledge and salesmanship, and less time with the customer (although, have you ever seen some guys quiz the hobby shop guys on which glue to use for a certain application or which type hobby knife blade to use for what purpose-- almost as bad as here on the forums when such subjects come up! Usually devolves into an argument over cross-purposes...) Thing is, it still takes at least as much time and effort to sell 27 bottles of glue or hobby knives or whatever to get the same profit level as made off a single high-dollar RC sale, even if the guy has to stand there and discuss the various components/features and stuff of the RC sale with the customer before making the sale... So I really don't see how, even at the higher markup, the little stuff is a bigger profit maker than the larger sales...
Unless you're saying that, strictly speaking by your own example, smaller items vastly outsell the bigger stuff by a much higher ratio than say 25 or 30:1...
I can see how both are critical sources of revenue for a hobby shop, on both levels... I just have a problem seeing how one is SO much more important than the other...
Not that it matters much anyway, I suppose-- I'm not running a hobby shop... but I DO find it fascinating nonetheless... I also find it interesting that most hobby shop folks I've come across really seem as if they could care less about anything but the big-ticket RC sales... everything else is basically just 'wasting their time' (even if they're just sitting behind the counter reading a magazine when you ask about something) if it's not a big-ticket RC item you're wanting to talk about...
Oh well... Later and have a good one! OL JR