## Viewing post in Do you understand business?

(Edited 2 times)

I agree on the ingot price, but in what kind of companies have you been working?

Edit: well comparing it to my company is unfair because we charge for work time, too, so we would add that, but that would not result in a general 200% profit, this is crazy. MAYBE for small items below 100 bucks that makes sense, i.e. account for your work time as a minimum of 100 bucks, and energy (the coal ;) ) but not for a 100,000 dollar ingot resulting in 200,000 profit, this is out of proportion

I worked at a small hardware store for 10 years and we had a similar price structure. For low cost items (under \$5 cost) the markup target was about 100%, so a \$3.00 cost item would sell for \$5.99. In the business world you use a different formula so the percentages don't get as crazy. We calculated Gross Profit Margin which gives a percentage between 0 and 100. Formula was 1 - Cost/Retail, then multiply by 100 to change it from a decimal to a percentage. So if an item sold for 100% more than cost, it had a GPM of 50%, and 200% more than cost had a GPM of 66%.

And Ideally for Items below \$20, you'd aim for 50-60% GPM. More expensive items (over \$100) had worse margins (sometimes only 5-10% GPM) because people compare prices more when buying those items.

So the tldr version is: 100% markup is not uncommon for low cost items in the retail world.