Word: markup
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Dates: during 1950-1959
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...operating on a cash-and-carry basis, Ohrbach's keeps its operating expenses down to 17% of sales (v. the department-store average of 35%), and holds markup down to about 20% (v. the average 40%). By eliminating sales slips. Ohrbach's saves time and trouble for clerks. And by a fast system of recording price tags, Ohrbach's can give each of its 150 buyers a detailed account of the previous day's sales; hot items can be reordered before their sales appeal cools. Twice a week buyers examine the coded sales tags, mark down...
...such gimmicks successful? Most often not, since fancy premiums and lavish advertising come out of the dealers' 24% markup on the car, not out of the manufacturers' profit...
...discount house is not a new idea. "Wholesale" houses of one kind or another have existed for years. What is new, and frightening to retailers, is the small markup on which the discounters operate. Since they usually spend no money on displays, give no credit or free delivery, and rarely advertise their wares, their overhead is small and the saving is passed on to the consumer. "In addition to the trade discount, we get an extra 1¼ discount by paying cash for everything we buy," says Los Angeles' William E. Phillips, whose discount house grossed...
...lawsuit on every small discounter. Some big companies such as Sunbeam, Magnavox and General Electric are trying to police their dealers rigidly. But many companies are none too anxious to lower the boom on discount stores that move large quantities of goods, since the manufacturer still gets his full markup. In fact, even businessmen who publicly condemn discount houses often deal with them privately. One big Chicago corporation recently bought all its employees Christmas presents from a discount house, picked up 700 radios at $9.45 each, v. $19.75 list price...
...developments have been the rapid increase in automatic vending machines (which last year dispensed more than $1.5 billion worth of goods) and the spread of self-service selling, even to department and drug stores. The self-service supermarket has not only trimmed distribution costs enough to cut its average markup to 16%, but it has done much to change the manufacturer's selling methods. Johnson's Wax, which was once sold primarily through hardware and department stores, now moves mainly through supermarkets, which now sell dozens of items that have no connection with food...