Quote:
Originally Posted by KSig RC
Gross margin on cigarettes is something like 17-20%, right? It's clear that your interest here isn't the smoker, it's keeping your high-margin cash cow viable. So it would make sense that people are switching to 'value' brands to offset the cost, right?
Except they're really not, are they Tom? The actual increase in movement has been in specialty brands, imports, and etc. This was what I meant by "profitable model" before - there's still tons of money for you to make . . . you'll just have to figure out where. Remember: the number of cigarettes sold has fallen nationwide, but actual dollars spent has increased. Sure, this is partly due to tax increases, but it shows the raw cap on available disposable income hasn't been reached. Studies have shown that it's not even close to being reached. The sky isn't falling, no matter how poorly your friends performed in your anecdotal evidence.
If anything, you should direct your anger at the state taxes, which are hilariously high compared to the obscene amount of money they get from previous tobacco litigation.
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Wrong Bucko, It is 8 % Mark up which equals @ 2/1 gross prfit, not 8 % profit even close.
True, the money has raised, is not at the retail or wholesale level, but at the State and Federal level.
So each level of Government wishes to use Tobacco as a cash cow, they are losing money, jobs, and taxes.
The disposable income is raising (?), well I am not so sure about that?
Little do you know or have a clue of how much profit is there for a Store like mine or others who have finally given up and said screw it.
Get a little experience from a store like mine and then Please come back and tell me what you find!