Context and the Dollar stores
To give some context to the discussion in this thread, I thought I would share some information I received last week from the owner of a local "Dollar" store.
She operates a small, independent Dollar type store in a local strip mall. The mall owners have a new tenant coming in at the other end of the mall - a branch of the largest Canadian Dollar store chain. The new store will be much bigger than the independent.
The owner was saying that the big chains have quite an advantage over her. For a typical item which sells to the customer at a price of $1.00, the chains will pay just 8 cents while she, as an independent, will generally have to pay between 12 and 20 cents.
Buy for 8 cents, and sell for $1.00. That is "margin".