“Considering most retailers bottom line is about 2-5% of sales, an 8% drop would wipe most out.”
Ah-—No! 5% of 8% is only .4%, and if they are working on a smaller margin, the differenc is even less. It only means there will be a smaller gross—the profit (percent-wise) on the gross will be the same, but the net profit will be smaller, but only by the percentage the gross is decreased.
No wonder B. Madoff was such a success—for a while.
Hank
Um. No. If your bottom line is 1 million out of revenue of $50 million. Subtract 8% of revenue = sales of $46 million. Your bottom line is now -3 million. Don’t ever run a business.