The basic law of retail is that everybody’s price for any item is roughly 2x what they paid for it.
So imagine a Foot Locker store. There is a pair of Nikes that cost $180.
That means that the store paid Nike about $90 for them.
You want them but don’t want to pay $180.
Now the store is running a sale. 25% off! That means $45 off $180, or $135. That seems more reasonable so you go in to try them on and buy them.
The store is still $45 ahead, and having lured you in for a sale on those Nikes you want, maybe you also pay full price for some new socks or a hat.
At the end of a season to make room for new inventory they may mark down some leftover items to 50% off (their cost) or even less, having made sufficient profit on the other items they sold during that time.
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Answer:
The basic law of retail is that everybody’s price for any item is roughly 2x what they paid for it.
So imagine a Foot Locker store. There is a pair of Nikes that cost $180.
That means that the store paid Nike about $90 for them.
You want them but don’t want to pay $180.
Now the store is running a sale. 25% off! That means $45 off $180, or $135. That seems more reasonable so you go in to try them on and buy them.
The store is still $45 ahead, and having lured you in for a sale on those Nikes you want, maybe you also pay full price for some new socks or a hat.
At the end of a season to make room for new inventory they may mark down some leftover items to 50% off (their cost) or even less, having made sufficient profit on the other items they sold during that time.
That’s how it works.