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| reply to dcurrey
Re: Bull $hit said by dcurrey:No way should any company be getting a triple digit percent markup on anything. For your sake, I hope you never eat in a restaurant. Hard to find a single item in any restaurant that isn't at least a triple digit markup.
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Jay: What the @#$% is the internet??? | |
| said by PaulHikeS2:said by dcurrey:No way should any company be getting a triple digit percent markup on anything. For your sake, I hope you never eat in a restaurant. Hard to find a single item in any restaurant that isn't at least a triple digit markup. The reason they have to mark it up so much, is because they have to pay Natural Gas prices for cooking, Air Conditioning for the cooking area, plus management, and a small amount actually goes to the waiter as their hourly money.
The Telecoms have 3 major things they pay for: Spectrum (overpriced by our government so that small companies can't afford it), Workers (Higher management ALWAYS OVERPAID), and Facilities costs (they build way to many stadiums and BS).
Once a company gets to a certain size (they always forget about Customer Service at this point) they need to be held accountable even if an idiot (probably an employee) makes a mistake on their own bill, considering that somehow in America we can get away with saying "Unlimited Data" as long as we put a star next to it.... | | |
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 CylonRedPremium,MVM
join:2000-07-06
Bloom County | reply to PaulHikeS2
And yet their average profit margin is less than 5% Which means - most of the items do not have that much markup. Certainly alcohol and desserts also have high markups but most of that is eaten by the costs of everything else needed to run a restaurant.
With markups like that - they would not be the #1 business to go under in less than 1 year. | |
| said by CylonRed:And yet their average profit margin is less than 5% Which means - most of the items do not have that much markup. Certainly alcohol and desserts also have high markups but most of that is eaten by the costs of everything else needed to run a restaurant. With markups like that - they would not be the #1 business to go under in less than 1 year. You're confusing gross margin with net earnings. Food always has to be marked up at least 300% (although you're correct that they make the most on drinks and desserts) which is a gross margin, but net earnings are based on revenue after all costs, including rent, fixtures, labor, insurance, etc. are considered. | |
| reply to PaulHikeS2
You obviously don't know the restaurant industry too well.
Take a simple Dominos franchise where sales are $10k per week:
Rent: 5% of sales
Overhead (water, gas, elec, phones): 10%
Royalties/National Advertising: 10%
Labor Cost: 28%
Food Cost: 28%
Amortization (debt service): 8%
So, all that works out to be 89% of sales. These aren't fictitious numbers, either; these are from an actual Dominos franchise operating in my area!
So, while that $14.99 pizza really costs Dominos $4.19, it also costs them $4.19 to produce it, and $4.96 for all the other costs and royalties, and the franchise operator earns $1.65 on it. Oh, and that's before taxes, too!
So, yes the restaurant industry marks up every dish by 300%, but the actual profit margin is very small. Ten percent is normal, if not high.
So, how does this translate to the world of mobile carriers? They also have fixed and variable costs like every other business.
What gets people angry is that they charge for something people believe should be free, yet if these things were free the carriers would have to charge more for other things in order to recoup their costs for network buildout/repairs/upgrades/services/etc.
While it's true that a text message costs the carriers exactly zero to receive and transmit (text messages are sent through an auxiliary communications channel originally set aside for signalling and locating services, and not the main voice/data channels) they charge for them because they are in demand, and because if they didnt have that revenue stream, the cost of everyone's voice plans would be significantly higher. | |
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