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LBS reasonable markup

Started by Keith Vetter · · Last activity · 58 posts · 1,249 views

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Road Cycling
Published
11 June 2004
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17 June 2004
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Keith Vetter
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  1. Todd Kuzma <[email hidden]> wrote in message news:<[email hidden]>...

    Quoted message said:
    Quoted message said:

    I recall learning that little semantic trick to avoid letting the
    consumer know that we took 100% markup on just about everything. I
    don't object to a store taking keystone markup. It is generally
    necessary to make any profit at all. I just prefer that a retailer I
    do business with call a spade a spade.

    This is no semantic trick. In running a business, "markup"
    is not a useful accounting term. "Margin" is. If you look
    at a profit and loss statement, it shows you margin, not
    markup. Margin is the number used in profitability
    calculations. Gross margin is the number used in industry
    benchmark comparisons. Nobody uses "markup" in any sort of
    business analysis.

    See, you're still doing it. You are using the semantics of accounting
    to distract people from the fact that you use keystone markup which is
    100%.

    Quoted message said:

    However, thanks for giving us an insight into your character
    by telling us that you tricked your customers. Just don't
    accuse me of the same.

    I didn't say that I did it. I said that is how retailers did it when
    I was in the business. I seldom had occasion to discuss markup with
    the customers and, when I did, I didn't tell them we were taking 50%
    markup when we were taking 100%.

    [censored] Durbin

  2. "[censored] Durbin" <[email hidden]> wrote in message
    news:[email hidden]...

    Quoted message said:

    I didn't say that I did it. I said that is how retailers did it when
    I was in the business. I seldom had occasion to discuss markup with
    the customers and, when I did, I didn't tell them we were taking 50%
    markup when we were taking 100%.

    Whatever, I'm suprised you would be pricing goods at less than 300% of cost.
    That's the pricing I remember way back when I worked Xmas in a department
    store.

    Of course, some retailers do sell for less...

    Doug

  3. in article [email hidden], [censored] Durbin at
    [email hidden] wrote on 6/15/04 7:22 PM:

    Quoted message said:

    See, you're still doing it. You are using the semantics of accounting
    to distract people from the fact that you use keystone markup which is
    100%.

    Who exactly am I distracting and why? I told you that all of my financial
    documents use "margin" rather than "markup" and why. I told you why I don't
    like using a straight markup formula to determine pricing. Yet, you choose
    to ignore all that and continue to attack my integrity. I'll be happy to
    discuss LBS management, strategy, pricing, etc. with any reasonable person.
    Unfortunately, you don't seem to be interested in that. So, I'm done with
    you.

    Todd Kuzma
    Heron Bicycles
    Tullio's Big Dog Cyclery
    LaSalle, IL

  4. GS said:


    The whole topic got me wondering... how many on this group who are
    gung-ho on supporting the LBS don't support the local guy in other
    areas of their consumerism?
    I'll bet some of you here are on a Dell computer - bought through
    mailorder. Why not go to the local computer guy? You would've gotten
    much better service.

    I've had a Dell, now I've got a budget mail order system. Works great for
    what I need. Why go local? Most computer products are commodities now days
    and often not cost effective to repair. Price is the driving factor for me
    on computer purchases. Additionally, I've found that local doesn't always
    mean good. Nothing worst than paying a premium for local service and
    winding up stuck dealing with a bunch of knuckeheads. Same can be said for
    dealing with mail order customer service, but at least the price is usually
    better.

    Quoted message said:

    Some of you probably buy your books and CDs on Amazon. Why not spend
    full-price at the mom and pop book store down on Main Street?

    Price vs convienence. Depends on what I'm looking for. If I can wait and I
    know what I want -- Amazon. If I need something soon, want to touch it
    first, or just want to browse then a bookstore. If I need to replentish
    reading material -- the local used book shop.

    Quoted message said:

    Ever send flowers or candy through 1-800-Flowers.com, or FTD.com? Why
    not go personally to the local florist or candy shop?

    Flowers for the wife, I'll go local (probably not often enough). Obviously
    internet/phone are great for sending gifts to out-of-towners. Different
    market niches. It strikes me there's room for both models there.

    Quoted message said:

    Even when you're not using mail order, sometimes your shopping
    patterns have just as much impact. Ever notice how the local hardware
    shop is now almost extinct? Yet we all willingly go to Home Depot
    because we know that their prices will always be the best and we can
    get everything we need in one shopping trip.

    The market speaks. If Home Depot didn't deliver what the majority of people
    want then they wouldn't be so successful -- all conspiricy theories aside.
    It's kind of funny how you hear so much criticism about the Home Depots and
    WalMarts of the world, but the parking lots are always full. Money
    talks -- these place attract customers and make money, that's a successful
    business model. Like it or not, that's just reality. Can't the LBS's of
    the world adapt to those circumstances?

    Quoted message said:

    How many of us go to Starbucks instead of the small, privately owned
    coffee shop? The list goes on and on.

    Starbucks or local -- people are going to go where they get the best value
    for their money. Obviously individuals compute "value" differently, but it
    is the aggregate of those computations that defines the market -- classic
    microeconomics. That so many otherwise educated people seem willing to
    argue that the traditional LBS should be exempt from that mechanism is truly
    strange.

    Tom

  5. "tcmedara" <[email hidden]> wrote

    Quoted message said:


    The market speaks. If Home Depot didn't deliver what the majority of


    people

    Quoted message said:

    want then they wouldn't be so successful -- all conspiricy theories aside.
    It's kind of funny how you hear so much criticism about the Home Depots


    and

    Quoted message said:

    WalMarts of the world, but the parking lots are always full. Money
    talks -- these place attract customers and make money, that's a successful
    business model. Like it or not, that's just reality. Can't the LBS's of
    the world adapt to those circumstances?

    If LBS's adopted the Walmart model, we'd have one. Performance/Nashbar. Like
    it or lump it.

    Pete

  6. "Frank Krygowski" <[email hidden]> wrote

    Quoted message said:

    <sigh> About ten years ago, our terrific local hardware chain,
    Stambaughs, folded in the face of competition from Lowes and Home Depot.
    I still hate it. Lowes gives me my choice of 18 styles of toilet
    paper holders, as if that matters to me. Stambaughs used to carry every
    fastener known to mankind, every obscure bit of hardware you could ever
    need, sold by pleasant old guys who had been working the hardware
    business since the 1950s. Now it's Lowes or Home Depot.

    Actually, Lowe's usually has that obscure bit of hardware or fastener. The
    problem might be finding it, because that pleasant old guy isn't ther to
    point you in the right direction.

    Pete

  7. GS said:

    The whole topic got me wondering... how many on this group who are gung-ho
    on supporting the LBS don't support the local guy in other areas of their
    consumerism?
    I'll bet some of you here are on a Dell computer - bought through mailorder.
    Why not go to the local computer guy? You would've gotten much better
    service.

    This computer was custom built for me by a local guy.

    Quoted message said:

    Some of you probably buy your books and CDs on Amazon. Why not spend
    full-price at the mom and pop book store down on Main Street?

    Sadly, we have no mom & pop bookstore within seven miles, AFAIK. Barnes
    & Noble drove them out of business. Hell, Barnes & Noble even drove
    Little Professor (another chain) out of business here.

    But FWIW, my all-time favorite bookstore is Powell's in Portland OR.
    It's about 3000 miles from here, but it's amazing!

    Quoted message said:

    Ever send flowers or candy through 1-800-Flowers.com, or FTD.com? Why not go
    personally to the local florist or candy shop?

    I've always gone personally to the local florist. But, sign of the
    times: Their shop is now flattened to make room for a Walgreens
    mega-chain drug store. :-(

    Quoted message said:

    Even when you're not using mail order, sometimes your shopping patterns have
    just as much impact. Ever notice how the local hardware shop is now almost
    extinct? Yet we all willingly go to Home Depot because we know that their
    prices will always be the best and we can get everything we need in one
    shopping trip.

    <sigh> About ten years ago, our terrific local hardware chain,
    Stambaughs, folded in the face of competition from Lowes and Home Depot.
    I still hate it. Lowes gives me my choice of 18 styles of toilet
    paper holders, as if that matters to me. Stambaughs used to carry every
    fastener known to mankind, every obscure bit of hardware you could ever
    need, sold by pleasant old guys who had been working the hardware
    business since the 1950s. Now it's Lowes or Home Depot.

    Quoted message said:

    How many of us go to Starbucks instead of the small, privately owned coffee
    shop? The list goes on and on.

    Sorry. I drink tea. Preferably oolong.

    --
    --------------------+
    Frank Krygowski [To reply, remove rodent and vegetable dot com,
    replace with cc.ysu dot edu]

  8. "Frank Krygowski" <[email hidden]> wrote in message
    news:[email hidden]...

    Quoted message said:

    Sorry. I drink tea. Preferably oolong.

    Oolong? You struck me as a sencha kind of guy.

    --
    Warm Regards,

    Claire Petersky
    Please replace earthlink for mouse-potato and .net for .com
    Home of the meditative cyclist:
    http://home.earthlink.net/~cpetersky/Welcome.htm
    See the books I've set free at: http://bookcrossing.com/referral/Cpetersky

  9. Claire Petersky said:

    Book store: I'm lucky enough that I have a used bookstore in my
    neighborhood, and a branch of the public library, as well as a Barnes &
    Noble. The library and the used bookstore get the first crack, but the B&N
    is there as back-up.

    you shouldn't steal from the public library, claire. or at least move them
    to the third place.
    --
    david reuteler
    [email hidden]

  10. Claire Petersky said:

    "Frank Krygowski" <[email hidden]> wrote in message
    news:[email hidden]...

    Quoted message said:

    Sorry. I drink tea. Preferably oolong.

    Oolong? You struck me as a sencha kind of guy.

    I don't know what you can tell about a person by their tea choice (as
    opposed to their tea leaves) - but I'm definitely an Oolong kind of guy.

    --
    --------------------+
    Frank Krygowski [To reply, remove rodent and vegetable dot com,
    replace with cc.ysu dot edu]

  11. tcmedara said:

    The market speaks. If Home Depot didn't deliver what the majority of people
    want then they wouldn't be so successful -- all conspiricy theories aside.
    It's kind of funny how you hear so much criticism about the Home Depots and
    WalMarts of the world, but the parking lots are always full. Money
    talks -- these place attract customers and make money, that's a successful
    business model. Like it or not, that's just reality. Can't the LBS's of
    the world adapt to those circumstances?

    The WalMart model is lowest price. That's it. Folks don't
    really care if their underwear is made by 6-year olds
    chained to sewing machines 20 hours a day as long as it's cheap.

    The downside of this business model is that we are a
    high-wage country in a low-wage world. Just about
    everything that we do can be done by somebody else cheaper.

    Todd Kuzma
    Heron Bicycles
    Tullio's Big Dog Cyclery
    LaSalle, Il 815-223-1776
    http://www.heronbicycles.com
    http://www.tullios.com

  12. Todd Kuzma said:

    The downside of this business model is that we are a
    high-wage country in a low-wage world. Just about
    everything that we do can be done by somebody else cheaper.

    And yet, we still have one of the lowest unemployment rates, and highest
    standards of living.

    Matt O.

  13. Quoted message said:

    Folks don't
    really care if their underwear is made by 6-year olds
    chained to sewing machines 20 hours a day as long as it's cheap.

    I think you have overstated the situation just a bot, and would be interested
    in your reference for the above statement.

    In any event, that salary may be the difference between a family starving or
    living. Given no other oprion of making money, I would work when and where I
    could.

    Of course, working condition can and should be improved. However, it is not
    like that person at that low wage has a comfortable living room to go to or a
    recreation park where they can swim and bike. They don't. Perhaps a slum
    crate with no plumbing is where they would otherwise hang out. The total
    situation is pretty desperate, and at least they can make money due to the
    Wal-Marts and others of the world.

    http://members.aol.com/foxcondorsrvtns
    (Colorado rental condo)

    http://members.aol.com/dnvrfox
    (Family Web Page)

  14. In article <[email hidden]>,
    [email hidden] says...

    Quoted message said:
    Quoted message said:

    Folks don't
    really care if their underwear is made by 6-year olds
    chained to sewing machines 20 hours a day as long as it's cheap.

    I think you have overstated the situation just a bot, and would be interested
    in your reference for the above statement.

    It's obvious hyperbole.

    ....

    --
    Remove the ns_ from if replying by e-mail (but keep posts in the
    newsgroups if possible).

  15. Denver C. Fox said:
    Quoted message said:

    Folks don't
    really care if their underwear is made by 6-year olds
    chained to sewing machines 20 hours a day as long as it's cheap.

    I think you have overstated the situation just a bot, and would be interested
    in your reference for the above statement.

    Well, sure it's an overstatement. If packages were labeled
    with a description of the working and environmental
    conditions of the factory that made the item, people may
    make a different choice. Maybe people prefer not knowing.
    I don't know. However, it is clear from the success of
    WalMart and Chinese-produced goods in the US, that low
    prices are more important than maintaining US-levels of
    working and environmental conditions.

    Unioin workers used to live by the mantra "look for the
    Union Label" but no longer. Union members line up at the
    front doors of WalMart, the world's biggest anti-union
    organization. A union member shopping at WalMart is
    essentially saying "I got mine, screw everyone else." That
    attitude works well until he or she loses that union job.

    People say that they want good wages and a clean environment
    for everyone, but they aren't willing to vote with their
    pocketbok in most cases.

    Todd Kuzma
    Heron bicycles
    Tullio's Big Dog Cyclery
    LaSalle, Il 815-223-1776
    http://www.heronbicycles.com
    http://www.tullios.com

  16. Matt O'Toole said:
    Todd Kuzma said:

    The downside of this business model is that we are a
    high-wage country in a low-wage world. Just about
    everything that we do can be done by somebody else cheaper.

    And yet, we still have one of the lowest unemployment rates, and highest
    standards of living.

    Well, yes and no. Here is our current worldwide ranking
    according the the latest UN statistics in several key
    indicators:

    4th Per Capita GDP
    36th Unemployment Rate
    10th Years of Schooling
    32nd Life Expectancy (Male)
    31st Life Expectancy (Female)
    33rd Infant Mortality

    We aren't always as good as we think we are relative to the
    rest of the world. What the future holds for the US is not
    clear.

    Todd Kuzma
    Heron Bicycles
    Tullio's Big Dog Cyclery
    LaSalle, IL 815-223-1776
    http://www.heronbicycles.com
    http://www.tullios.com

  17. In article <[email hidden]>,
    Todd Kuzma <[email hidden]> wrote:

    Why do I get involved in political-statistical bunfights in bicycle
    newsgroups? To paraphrase Homer Simpson, maybe I can be the voice of
    wisdom that guides the mob.

    Quoted message said:
    Matt O'Toole said:
    Todd Kuzma said:

    The downside of this business model is that we are a
    high-wage country in a low-wage world. Just about
    everything that we do can be done by somebody else cheaper.

    And yet, we still have one of the lowest unemployment rates, and highest
    standards of living.

    Well, yes and no. Here is our current worldwide ranking
    according the the latest UN statistics in several key
    indicators:

    http://unstats.un.org/unsd/default.htm

    The UN Statistics website annoyed me until I gave up trying to use it,
    and went elsewhere.

    Quoted message said:

    4th Per Capita GDP

    http://www.worldfactsandfigures.com/gdp_country_desc.php

    This listing (mostly based on 2002 estimates) gives the US as second,
    $37,600 pcGDP, behind only Luxembourg ($44,000!), but fourth is possible
    in the latest data. What is interesting about the listing I have
    referenced is that there are only two nations in the top ten with a
    population over 30 million people: the US and Canada (a distant 9th with
    $29,400). Going down the list, the next big country is Japan, 13,
    $28,000 (Japan's science-fiction economy should be analyzed with some
    caution, but that's a posting for another day), and then Germany at 18th
    and $26,600. No G-7 nation makes less than $25,000 (hello Italy!), but
    the gap between the US and any large nation is substantial.

    Quoted message said:

    36th Unemployment Rate

    http://www.worldfactsandfigures.com/gdp_country_desc.php

    Forbes says 18th in 2002, a figure I find much more likely, but this is
    a relatively volatile number. One caveat is that unemployment rates are
    affected a lot by structural issues within a country, and that different
    countries use subtly different ways of measuring unemployment, which
    makes comparison difficult when dealing with small differences.

    The top 20 countries include Japan (see previous warning about
    science-fiction economics), a bunch of Eurasian "tigers" from Portugal
    to Malaysia, all the Scandinavian nations, notorious statistical
    anomalies Switzerland and Luxembourg, and interesting anomalies China
    and Mexico. I would be very interested to see how China calculates its
    unemployment rate, but the Chinese economy is hot by any measure. As for
    Mexico, clearly it's sucking up all those NAFTA jobs, but it's not clear
    where they're sucking them from, since the US and Canada (28th on the
    Forbes list) have unemployment rates that are as low as anything seen
    since World War II.

    Quoted message said:

    10th Years of Schooling

    You wouldn't want your favourite country to rank way off on this one,
    but I wouldn't worry too much about it, as long as you're still making
    more money than all those smarter countries. One curious thing is that
    despite all that schooling, the common metrics of real academic research
    and advancment (Nobel prizes and research publications) are still
    disproportionately dominated by Americans. So whatever they're doing,
    the smart kids are not getting left behind.

    Quoted message said:

    32nd Life Expectancy (Male)
    31st Life Expectancy (Female)

    The diseases that kill Americans early, are, rather hilariously, related
    to to overeating. I don't mean it's funny if Uncle Mike has a heart
    attack and dies at age 50 because he liked Cheetos too much, but from
    either a historic global or a contemporary third-world perspective, it
    is malnutrition that is the classic problem (well, in the third world
    the major killer is diarrhea, which is only funny until you find out how
    effective and cheap Oral Rehydration Therapy is at saving lives...). In
    order to get US life-spans up to Japanes and Scandinavian levels, I
    propose a vast new government program in which social workers will be
    trained to walk up to fat people eating unhealthy snacks, slap them
    silly, and give them a bunch of leafy green vegetables to take home
    (physician, heal thyself...).

    Quoted message said:

    33rd Infant Mortality

    http://www.geographyiq.com/ranking/ranking_Infant_Mortality_Rate_aall.htm

    My numbers are actually worse than yours. 35th for the us, 6.75
    deaths/1000 live births. Japan has 3.30, and the US is worse in this
    stat than any other G7 nation. Some perspective should be kept: the US
    is better than Israel and worse than Italy, at 7.37 and 6.19
    respectively, so this isn't an insane rate for a developed nation. But I
    think pulling even with Greece (6.12, and this in a country where my
    relatives there are afraid of the hospitals) would be a reasonable goal.

    To give some idea of the spread between prosperous nations with
    apparently functional health systems, Canada is in 20th at 4.88.

    And why on earth is Greenland reporting 16.80 deaths/1000 live births??
    Are mothers there routinely exposing their babies if they don't like
    them? Seriously, they're below Sri Lanka, at 15.22.

    Quoted message said:

    We aren't always as good as we think we are relative to the
    rest of the world. What the future holds for the US is not
    clear.

    Oh for sure. And as a humble Canadian, I keep a distanced but still
    sharp interest in these stats. But by any measure, the US is an economic
    powerhouse.

    China and India want to be the next superpowers, and both have a
    legitimate shot at the title, and have made huge progress. The US
    doesn't have a large amount of control over that at the moment, aside
    from ridiculous and nihilistic solutions ("we begin bombing in five
    minutes."😉 But if I had to bet, I'd say that India, starting from well
    behind, is going to find that being something like a functional
    democracy is going to give it a substantial advantage over China. For
    China to stay ahead of India, I suspect it will have to start giving up
    on Communism even more completely than it has already. And if it does
    that, the US can probably look forward to the kind of happy dotage
    Europe has experienced in the presence of a US superpower: no longer
    fully in control of its own destiny, but not going anywhere terribly
    scary, either.

    Quoted message said:

    Todd Kuzma
    Heron Bicycles

    ObBike: The migration of the bicycle industry has been practically a
    microcosm of industrial transitions in the 20th century. It started out
    with dominant English and American industries, plus European
    componentry, now largely reduced to specialists at the high end of the
    market or domestic companies with overseas production. Then it moved to
    Japan, and when things got pricey, the same formula repeated as the
    industry moved to a cheaper "tiger" economy, in this case Taiwan. And
    now the pattern is repeating again, as Taiwan finds China eating away
    its low-end business, and showing all signs of improving itself into the
    high end. Don't fret for Taiwan too much, though: just like Europe,
    America, and Japan, the outgoing bike industry will leave behind a
    high-priced residue of designers and marketing companies, plus top-end
    manufacturing, that will be a going industry for the forseeable future.

    What was the question?

    --
    Ryan Cousineau, [email hidden] http://www.sfu.ca/~rcousine/wiredcola/
    President, Fabrizio Mazzoleni Fan Club

  18. "Todd Kuzma" <[email hidden]> wrote in message
    news:[email hidden]...

    Quoted message said:

    We aren't always as good as we think we are relative to the
    rest of the world. What the future holds for the US is not
    clear.

    We are like the Spanish Empire of about 400 years ago -- wasting our wealth
    on consumer goods and foreign military adventures. We look invincible now,
    but once we slide, it's going to be very hard to pull us out of the hole
    that we are currently digging.

    I believe the US will remain a country that has the capacity to inspire the
    world for another generation. The generation after that -- I agree, it's not
    clear.

    --
    Warm Regards,

    Claire Petersky
    Please replace earthlink for mouse-potato and .net for .com
    Home of the meditative cyclist:
    http://home.earthlink.net/~cpetersky/Welcome.htm
    See the books I've set free at: http://bookcrossing.com/referral/Cpetersky

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