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Nothing in my wallet
How much profit do running stores make on shoes? 3/26/2006 10:25AM Reply | Return to Index | Report Post
Just curious. I bought some racing flats the other day on they gave me 15% off. Made it cheaper than buying online. But how much of a markup are there on shoes?
TMoney
RE: How much profit do running stores make on shoes? 3/26/2006 10:42AM - in reply to Nothing in my wallet Reply | Return to Index | Report Post
typical retail markup is 45% in a specialty shop
runn
RE: How much profit do running stores make on shoes? 3/26/2006 11:26AM - in reply to TMoney Reply | Return to Index | Report Post
Then you add in costs of operation. Hopefully they end up making about 20%, but it is about 45% mark-up.
Econ 101
RE: How much profit do running stores make on shoes? 3/26/2006 11:39AM - in reply to runn Reply | Return to Index | Report Post
The mark up is about 90%, leaving a profit margin of about 45% which will NOT leave you making 20%.
trackhead
RE: How much profit do running stores make on shoes? 3/26/2006 11:51AM - in reply to Econ 101 Reply | Return to Index | Report Post
by saying 45%, of course, it is meant that roughly 55% of the MSRP = dealer wholesale cost before shipping or discounts.
Rossdeau
RE: How much profit do running stores make on shoes? 3/26/2006 11:56AM - in reply to trackhead Reply | Return to Index | Report Post
Who cares what the markup is ... retailers cand and will charge what the market will bear. Basic economics, my boy.
Jzs
RE: How much profit do running stores make on shoes? 3/26/2006 12:33PM - in reply to Nothing in my wallet Reply | Return to Index | Report Post
Keystone pricing is the goal. Say a shoe costs the running retailer $50, the shop owner would price the shoe @ $100. This would result in a 50% mark/margin,($100-$50=$50/$100=50%. It would be hard to GET Keystone $$ in today's competitive market, but that would be the goal.
Econ 101
RE: How much profit do running stores make on shoes? 3/26/2006 12:37PM - in reply to Jzs Reply | Return to Index | Report Post
No, that would be a 100% markup and 50% profit margin. It's pretty simple.
Jzs
RE: How much profit do running stores make on shoes? 3/26/2006 12:39PM - in reply to Econ 101 Reply | Return to Index | Report Post
that's what I wrote.
Econ 101
RE: How much profit do running stores make on shoes? 3/26/2006 12:40PM - in reply to Jzs Reply | Return to Index | Report Post
No you wrote 50% mark/margin
Earl
RE: How much profit do running stores make on shoes? 3/26/2006 12:52PM - in reply to Jzs Reply | Return to Index | Report Post
Keystone pricing on apparel is the goal for footwear the the goal is a 45% margin. For example the typical whole sale cost for a shoe that retails for $100 is $55. So the reailer makes $45 or 45%. Factor in volume discounts and they make a little more.
jester
RE: How much profit do running stores make on shoes? 3/26/2006 1:47PM - in reply to Earl Reply | Return to Index | Report Post
just remember, all you greedy bastards, that all of that money does not go into the pockets of a store owner. they must subtract rent, utilities, insurance, payroll expenses, etc before they cut themselves a paycheck.

not a great way to get rich.
Ignoramas
RE: How much profit do running stores make on shoes? 3/26/2006 2:55PM - in reply to Earl Reply | Return to Index | Report Post
Can someone explain what keystone pricing is?
Earl
RE: How much profit do running stores make on shoes? 3/26/2006 3:09PM - in reply to jester Reply | Return to Index | Report Post
You're right, I was just trying to answer the question correctly. Operating a running store is a lot of work and it takes several years to even make a profit let alone get rich. Most of the successful stores have been around for 20 years or more.
jester
RE: How much profit do running stores make on shoes? 3/26/2006 3:19PM - in reply to Earl Reply | Return to Index | Report Post
sorry earl, that wasn't directed at you so much as at everyone here... even though i'm normally good about making sure the reply is aimed at the right person, i screwed that one up a bit...


for the guy who asked what keystone is, keystone is a retail term for a standard markup. most of the time it is 100%, which doubles the price relative to the cost.
Uncle Pervy
RE: How much profit do running stores make on shoes? 3/26/2006 3:30PM - in reply to jester Reply | Return to Index | Report Post
Correct... Even a 50% GP tells you nothing. It's your cost of operations.
fartleked
RE: How much profit do running stores make on shoes? 3/26/2006 4:26PM - in reply to Ignoramas Reply | Return to Index | Report Post

Ignoramas wrote:

Can someone explain what keystone pricing is?


Keystone means that an item is sold in a retail outlet for twice as much as the store bought it.

For example, you see a shirt at the local running store that is being sold for $30. The running store paid $15 to buy it, before shipping, discounts, and anything else.
racing flats are dogs
RE: How much profit do running stores make on shoes? 3/26/2006 4:41PM - in reply to Nothing in my wallet Reply | Return to Index | Report Post
You were able to find racing flats in a specialty brick & mortar store? Amazing. Rest assured the owner isn't making a dime. Oh sure, on your pair the margin was probably around 40% but the majority of the size run will not sell before an update is made. Racing flats are a losing proposition at retail for the vast majority of stores. Unless you buy some additional merchandise, consider yourself the victor in this economic transaction. I hope they're still in business when you go back for your next pair.
GVont
RE: How much profit do running stores make on shoes? 3/26/2006 5:47PM - in reply to racing flats are dogs Reply | Return to Index | Report Post
I'll chime in:

There is a BIG difference between PROFIT and MARGIN.

The former is what the store makes after everything is figured in: Rent, Utilities, Payroll, Taxes, COG (Cost of Goods), Advertising, etc.

The latter is what they yielded on the sale vs. what they paid. For instance, wholesale price points are generally the same throughout the industry (without the volume discounts being figured in). A shoes that retails for $100 has a wholesale price of $55, for instance. Now, depending on what the store's discount is, the margin will be the net yield...

On a side note, there are most definitely running stores that can make a decent profit, but so many variables are important for this to happen. For instance, just because you happen to sell the shit out of 6-8 styles at full suggested retail doesn't mean squat if you have 45 other styles collecting dust in the stock room; the key variable is managing inventory for both the styles that sell through and those that do not--unfortunately, in order to be considered a true running specialty store, you must by definition carry all the styles that by and large don't turn and burn--a good example would be racing flats. Everyone likes to piss and moan that running stores don't stock them heavily enough, but the reality is that stores simply do not sell them much anymore...Call it the proliferation of the TnT runner, call it whatever you want, but it's true...

My 2 cents...
fartleked
RE: How much profit do running stores make on shoes? 3/26/2006 6:00PM - in reply to racing flats are dogs Reply | Return to Index | Report Post

racing flats are dogs wrote:

You were able to find racing flats in a specialty brick & mortar store? Amazing. Rest assured the owner isn't making a dime. Oh sure, on your pair the margin was probably around 40% but the majority of the size run will not sell before an update is made. Racing flats are a losing proposition at retail for the vast majority of stores. Unless you buy some additional merchandise, consider yourself the victor in this economic transaction. I hope they're still in business when you go back for your next pair.


That's kind of funny to hear. We've sold through size runs of the Adizero, HyperSpeed, Streak XC, Marathoner, Katana and more without any problems.
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