J. Random Dullard, whom you’ve seen all over the Interwebs complaining about huge — nay, yuge — corporate profits, is of course full of it:
When a random sample of American adults were asked the question “Just a rough guess, what percent profit on each dollar of sales do you think the average company makes after taxes?” for the Reason-Rupe poll in May 2013, the average response was 36%! That response was very close to historical results from the polling organization ORC’s polls for a slightly different, but related question: What percent profit on each dollar of sales do you think the average manufacturer makes after taxes? Responses to that question in 9 different polls between 1971 and 1987 ranged from 28% to 37% and averaged 31.6%.
How do the public’s estimates of corporate profit margins compare to reality? Not surprisingly they are off by a huge margin. According to this Yahoo! Finance database for 212 different industries, the average profit margin for the most recent quarter was 7.5% and the median profit margin was 6.5% (see chart above). Interestingly, there wasn’t a single industry out of 212 that had a profit margin as high as 36% in the most recent quarter.
The seller had a wildly optimistic $485 on the tag but allowed as how he’d let it go for $425 out the door. Considering a brand new one retails at our shop for $499.95, Glock’s minimum advertised price, that was a less than attractive deal.
I did look around for a new one at the show, because retail profit margins on new base model Gen 3 Glocks are so razor thin that even my employee discount only saves me ten bucks or so, which would have been outweighed by instant gratification.
Most people have no idea how thin the margin on new guns is. I’m not aware of any similarly-priced consumer good that sells at retail for so little markup.
Truth be told, I wasn’t aware of the margin on new guns, though if you’d asked me cold a couple of days ago I’d probably have said “Maybe 10 to 15 percent.” Certainly nowhere in the 30s.