ps I was in a really bad mood that day.;)

Wally, in my first butcher shop, 89, I ran on a gross margin of 28%. my turnover was $430,000, my GP was $120,000 and my net after all expenses, including a wage fir myself $25K was $66,000. About half my GP or 15% of gross.

So I bought something for $10, sold it for $14 and made $2 (approx including my wage)

Today, a typical butcher shop in a Cantrell has a turnover of $900,000, with a gross margin of 50%, or $450,000.

Typically, rent and consumables accounts for 15%, total employment costs, 25% and profit about 10%. So that's a total of $360,000 in costs and just $90,000.

So, we now buy something for $10, sell it for $20 and still only make about $2 profit, with the rest being swallowed up in costs.

The sad part about all that is that it's the consumer that is paying much more for their goods, while retailers have gone backwards in real terms. The end will not be pretty.

As for your reel, my figure was only for the purpose of an exercise as I am fully aware of the cost of products compared to their retail price.

As for the service issue, again this is a result of online shopping, because so many consumers have simply used the retailers as test pilots, yet it's so common now for consumers to shift the blame on to poor service.

The ironic thing about service is that while people are very impatient with retailers, they accept having to wait to see their doctor and have done for decades.

It's not only in retail, it's anywhere an employer has to engage anyone. We are now competing with countries that do not have all the entitlements expected by workers. Long service leave, holidays, sick days, overtime, meal allowances, weekend penalty rates, superannuation, workers comp, uniforms, GST, maternity leave, and sometimes cars and travel allowances etc. It just gets so expensive to employ anyone here, why is it surprising that it's difficult to compete ? (have I left anything out?)

It's how inflation occurs as everyone down the chain from councils who demand payments from shops in rates to the plumber who comes to fix your tap; their overheads are killing them. Yet everyone is demanding more and more from employers and governments in social services. With the demography changing rapidly as we age, it is all becoming unsustainable.

Yes snake, you left out distribution costs.

A case study.

I had an article made to my specification by a firm in Taiwan. It was probably made in China. I landed it into my store for $2.00 against the $8.60 it had cost to make it here. Incidentally just the brass to make the product here in Oz cost $3.50. This is quite ridiculous when you consider the Asian brass was probably made from Oz, copper & zinc.

My costs when delivered to a retailer were,

Landed cost ...$2.00
Packaging......$3.00
Freight local..$8.00
Freight Perth.$14.00
Total say.....$16.00 average
My markup 20%..$3.20
Total invoice.$19.20
Retail markup..$8.60

Retail price $27.80 + GST

I had to mark up on my invoice values, as that was the actual cost of selling the product.

This is a realistic indication of the cost of marketing in Oz. At this many suppliers & retailers can not make a go of business.

I ultimately gave up selling in Perth & Adelaide as the freight costs were ridiculous.

That's very interesting Hasbeen. Many people do not stop and think about costs of running even a small business and small businesses are the backbone of this country. Most just complain about the tax advantages of those so-called wealthy individuals who they think are ripping them off.

We do start from a disadvantage in that we are a large country geographically with a small population and we don't have the advantage of economy in large scale production for a domestic market as China and Europe and the USA have, although that's not necessarily the case with agriculture, but the farmers do have the climate to contend with. Added value on minerals might help but there are still all the problems that you and I have already mentioned.

Judging by some of the 'Usual Suspects' on OLO you would thing Australia was one of the poorest countries in the world, not one of the richest (10th highest GDP per capita just behind Canada, that's not the Congo). They go on about how hard done by their little businesses are, but I bet they all have flash cars, and big houses and go on holidays every years. No need to whinge and whine fellas when your doing so well.