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Old April 2nd 17, 03:48 AM posted to alt.home.repair,ca.driving,rec.autos.tech
Jonas Schneider
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Posts: 20
Default I used to buy tires from TireRack - now SimpleTire (how can they do it?)

On Sun, 2 Apr 2017 02:24:29 +0000 (UTC), Jonas Schneider
> wrote:

>> What is pure profit? Are you talking the difference between the price
>> they pay and the price they sell the tire? That is far from pure.
>> OTOH, if you did a cost analysis of the labor and overhead of running
>> the business I may agree.

>
> Your question is a fair question, since my original assumption was that
> tires are a commodity, where it's not the general nature of a commodity to
> sell much above it's cost.
>
> Let's go back to that number to see what it was saying exactly.
> http://www.moderntiredealer.com/uplo...issue-2015.pdf
>
> That PDF says that there are 200 million replacement tires sold each year,
> where, on page 52 of that document, we find the exact words:
> "According to a recent Modern Tire Dealer survey of independent
> retail and wholesale tire dealers, the average profit margin
> on a passenger tire is 26.4%. For a light truck tire it falls to 24%.
> The average wholesale passenger tire sales margin is 12.4%."


Here are the definitions:
Sales Margin: http://smallbusiness.chron.com/sales-margin-18383.html
Profit Margin: http://www.investopedia.com/terms/p/profitmargin.asp
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