Thanks for the answer.I hear a lot of high volume low margin numbers from people in online retail (especially products that can be duplicated and aren't well protected by IP). It seems to be common in that industry, kindof like how restaurants are often not mega-money generators compared to their operating costs.
Seems like the people doing well in those kinds of businesses are the ones who find ways to scale into astronomical volumes. Basically they become so good at operations and finance that it makes up for the low margins of the products. So, you'll find them with 100s of products online (maybe by acquisition, maybe by continuously developing and marketing products), or 100s of restaurants, etc.
At a small scale, yes it sounds terrible to me too. Surely there are easier ways to make a modest middle class income. If you can scale big, then it's probably like anything else at scale... you're still rich lol. The low margins are a sign of high competition, either directly or with other products that soak up the same part of the customers' budgets. If you experience higher margins than others selling 'similar' products, it may be a sign that you've broken away from the commoditization that the rest of the market is settled into. Maybe the business even makes CENTS
Definitely! Her business does make CENTS and I'm sure if she doesn't get wealthy running it, she probably will when she sells it.
Dislike ads? Remove them and support the forum:
Subscribe to Fastlane Insiders.