General traders might be interested to know that mark-ups in fruit
and vegetables are around 100%, at least according to an article in the Sydney Morning Herald this week.
Apparently fruit growers have been complaining that their
share of the final price is miniscule compared with what the retailer gets off
their customers. This type of debate is not unusual, particularly in times of
over-supply when growers are forced to reduce their prices.
There are many costs in between the grower and retailer
including transportation, storage, treatment, and of course the wholesaler’s
margin. Getting a handle on just where the profits lie is not easy although
hearing that a single continental cucumber and a bunch of coriander wholesale
for around 50cents but end up $2 in shops does indicate that profit
opportunities can be high for retailers.
Of course you wouldn’t want to be the final stage in the
distribution chain when perishables become spoilt, and dramatically lose value, or have to be thrown out. We are sure there is a lot more to this story.
COMMENTS:
19/01/2016 20:40:43 mark ups "if you want to complain about mark ups, lets start at jewellery stores or clothing … if you have a sale for 50 % off then your business model is wrong. Customers are very wise now and are willing to wait for a sale knowing it will come. At the end of the day if you get up at 4 in the morning you deserve what ever mark up you can get "
Thanks for your input. You will get no argument from traders on the merits of reasonable mark-ups. The point of this article (maybe not made clear) is that rationalising the difference between mark-up to growers and mark-up to retailers is not just a simple comparison of dollar return on a single product. There are many factors that influence a fair return and 4am starts is certainly one of those. - Ed
