41–50 of 272 posts
I sometimes drink a stupid amount of diet soda. I know drinks are usually high margin, but I wouldn't be surprised if some places lose money on me. I went to a Denny's recently and tried to count the number of refills I got, but I lost count. This is the same Denny's I went to in college, where the waitress knew me. She'd drop two pitchers of Diet Coke on the table before she took my order. The epitaph on my tomb sto…
The only thing I found more interesting than all-you-can-eat buffets actually turning a profit is that there are business people who are apparently content running a business with such slim margins. This article quotes a 5% margin. I know food industry margins are low in the first place, but as a business owner in a different field I'm left wondering why anyone would even bother. The same business prowess and attenti…
> there are business people who are apparently content running a business with such slim margins ... I'm left wondering why anyone would even bother A percentage margin is expressed relative to the value of the sales. Low margin on high value sales is as good as high margin on low value sales, in terms of how much money you make. Low margin is only a problem in low value sales. Why shouldn’t people running a business…
I sometimes drink a stupid amount of diet soda. I know drinks are usually high margin, but I wouldn't be surprised if some places lose money on me. I went to a Denny's recently and tried to count the number of refills I got, but I lost count. This is the same Denny's I went to in college, where the waitress knew me. She'd drop two pitchers of Diet Coke on the table before she took my order. The epitaph on my tomb sto…
If I do go to a buffet I only eat protein because it seems to be the only way to get my money's worth.
If I go to a buffet I fill up my plate with all the food I most enjoy even if that includes the cheap stuff. Then I feel like I got my money's worth, even if they made a profit.
Several of my family members are this way.
I sometimes drink a stupid amount of diet soda. I know drinks are usually high margin, but I wouldn't be surprised if some places lose money on me. I went to a Denny's recently and tried to count the number of refills I got, but I lost count. This is the same Denny's I went to in college, where the waitress knew me. She'd drop two pitchers of Diet Coke on the table before she took my order. The epitaph on my tomb sto…
Similarly with MSG, studies show it is less toxic than salt. It is only 'toxic' in ridiculously large quantities.
I sometimes drink a stupid amount of diet soda. I know drinks are usually high margin, but I wouldn't be surprised if some places lose money on me. I went to a Denny's recently and tried to count the number of refills I got, but I lost count. This is the same Denny's I went to in college, where the waitress knew me. She'd drop two pitchers of Diet Coke on the table before she took my order. The epitaph on my tomb sto…
Oh and I quit, so you can be sure there's hope for you.
The only thing I found more interesting than all-you-can-eat buffets actually turning a profit is that there are business people who are apparently content running a business with such slim margins. This article quotes a 5% margin. I know food industry margins are low in the first place, but as a business owner in a different field I'm left wondering why anyone would even bother. The same business prowess and attenti…
This may come as a shock but software is the exception. The vast majority of the business world operates this way. The fun part comes when you realize that absent monopoly conditions this is the natural stable state of a mature market, and think about what the future of software might look like, and what the current public policy fights are about.
This article claims that banks make 24%, and they are hardly a monopoly. It also claims the overall average is 8.5%.
Earlier quoted context omitted.
If I go to a buffet I fill up my plate with all the food I most enjoy even if that includes the cheap stuff. Then I feel like I got my money's worth, even if they made a profit.
For some people, getting their money's worth (literally: the food they eat cost the restaurant almost as much, or more than, the amount the customer paid to eat it) is the enjoyment. Several of my family members are this way.
Earlier quoted context omitted.
> there are business people who are apparently content running a business with such slim margins ... I'm left wondering why anyone would even bother A percentage margin is expressed relative to the value of the sales. Low margin on high value sales is as good as high margin on low value sales, in terms of how much money you make. Low margin is only a problem in low value sales. Why shouldn’t people running a business…
It’s also important to look at capital expenditure intensity. Spending $100k to make .01% could make sense but spending $1B to make .01% is much tougher, from an NPV perspective.
I might even be post-paying for the inventory (net 30 terms, for example). I post-pay the labor as well. In this case, it's kind of meaningless how much the inventory that I'm turning over costs, given a fixed margin. What matters is how much capital I have invested in the business. It also matters how quickly I can adjust to changing market conditions. If I can respond to changing conditions instantly, it's impossible for me to lose money. In practice this is not possible because of leases and delivery schedules, though. That's where the risk comes from.
Of course, variability of demand is also an important factor. That's where the risk comes in, because there are fixed costs that don't vary with business.