Any retailers out there who could answer a question?

[Brewtopian]

I'm finalizing my business plan to open a new retail beer store. I'm having a hard time making the numbers work however and need some help figuring our where I'm going wrong.

I'm figuring an average markup of 35% but my cost are such that I'm not making any money. I'm not losing money either but my net profits are about 1% when they should be between 15% and 20%.

In my analysis of competitors they are operating with a great deal more overhead with the same cost for the product and similar or less volume so whats going on here?

So if any of you are operating a retail store and would be interested in helping a fellow beer lover out I'd really appreciate it.

[einhorn]

Hi Brewtopian,

It's a little tough to help you with your problem/question as no one here (including myself) has seen your numbers. Basically though, I think that your total sales must increase in order to make more than 1%. You can't expect to work with a general 35% mark-up, which is standard, and expect to have profits of 15-20%. Your total sales (and of course your cost structure) are more than likely "ruining" your calculation.

BTW profit margin: as far as I know, most US retailers only make 3-5% sales profit. Here in Germany they make your stated 1-2% as competition is fierce.