On 4/1/2017 10:24 PM, Jonas Schneider wrote:
> On Sat, 1 Apr 2017 20:58:20 -0400, Ed Pawlowski > wrote:
>
>>> On a typical ultra high performance tire which is, say, $75, that means
>>> that 1/3 the cost is pure profit online.
>>>
>>
>> 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%."
>
That is a pretty small margin, Far from pure profit. You have to take
out rent, labor, utilities, insurance, supplies for office, shipping,
maintenance,taxes.