Most specialty retailers (with brick and mortar stores) work on 50% profit margins (bike shops are normally at about 40% - source, a Google search). If you pay $100 for something the retailer probably bought it for $50.
That’s what it costs you to shop locally. No one is robbing you. That’s what it cost them to maintain a store front. Competition keeps everyone honest.
The big guys (Costco and Walmart) work on smaller profit margins – abound 20%. Even at that, Costco’s net profit is normally about what they charge for membership fees. Walmart nets about 5% so their costs are 15%.
Internet retailers have lower overhead so they can sell for less. Brands like mine can sell for a lot less because they are factory direct. Store fronts are now caught in the middle. Things don’t change overnight, but they do change quickly and it will be interesting to see what store fronts, towns, malls, shopping centers, and other retailers look like in ten years.
Consumers will vote and decide who wins, but at this point nobody knows how they are going to vote. Shopping is entertainment and people will pay for it. The question is how much?
