Retailing, output, margins

The retail margin is essentially the inverse of what they call "markup" in retailing lingo, which I took to mean the wholesale cost of the retail items to be sold. But when comparing output and value added, there is another component, intermediate costs. How do these differ?
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  • Hi Alberta, We apologize, we aren't exactly certain as to your question, so please let us know if this does not provide the answer to your question. The Retail Margin is one portion of the Value-Chain from which the final cost of product is distributed across all the component Industries that add value or cost to the product, without actually adding anything to the product itself (i.e. the bottled water you purchase at the store is not modified once it leaves the bottling plant, but transport to the distributor adds cost (transport Margin), and the distributor adds their wholesaler cost (wholesale Margin, and transport gets another Margin moving from the distributor to retailer, and then finally the retailer adds their Margin - yet the bottled water on the shelf of the retailer is materially identical to what it was when it left the plant, just more expensive). Each one of these elements (retail, wholesale/distribution, transport and production) gets a Margin or portion of the final sales cost and each one has an expenditure pattern for operating their specific business type that is not directly affected by the other businesses in the Value-Chain. Thus each member of the value chain receives their portion of the final sale as a Direct Effect and each element starts it's own round of Indirect and Induced purchases based on it's portion of the sales value. If you are impact a specific Retail Sector (320-331) however, the software doesn't know what specific items are purchased and thus it can only look at what it costs to operate the retailer itself. When you choose Gross Retail Sales, the software will assume the entered Industry Sales is a purchaser of final consumer cost and will reduce that value to only examine the retail portion (since that is the only spending pattern that can be affected). If you choose Gross Retail Margin, then you are telling the software that entered Industry Sales value is all spent on operating the store, and the other components of the Value-Chains prices have been removed from the entered value. Please let us know if this addresses your concern or if you have any additional questions.
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