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Margin mugs: A bank paid how much for a 2m Ethernet cable? WTF!

Rol Silver badge

You're forgetting the yearly retro, which can kick 10,20 even 30% back to the buyer.

If you're in business to sell on merchandise you will most probably have negotiated a volume deal with your suppliers. that deal would usually equate to a yearly lump sum cash back once you have met the agreed volume.

That's why all purchases get funnelled through central so they can focus their buying on the company who's volumes they are trying to meet.

Thing is, you only ever hear the immediate cost and markup moan, they never let on the retro payment will practically quadruple their profit margins.

It's the same thing that Tesco got a hiding for. They factored in retro payments to their profitability months ahead of ever qualifying for them, and then failed to meet the volumes.

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