16 August 2010
When someone shoplifts, does the store lose money or does the supplier to the store lose money?
Posted by admin under: Small Business .
I’ve always wanted to know who is burdened by shoplifting. In other words: If I like a company/manufacturer and I steal their product from a store do they get profit?
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2 Comments so far...
imisidro Says:
18 August 2010 at 11:44 pm.
The store loses money. The store has already paid the supplier for the items they sell (except when it is consignment which is a different arrangement). Stores don’t charge the suppliers for items that were shoplifted (only when the product is defective the stores can have return arrangements with the suppliers)
And the cost depends on the profit margin of the company for the product.
Take for example a $14.95 DVD with a 2% profit margin, which means the store earns $0.30 for every DVD sold. Now if one DVD is stolen, it means the store has to sell about 50 DVDs to recoup the cost of that stolen DVD.
Ed Atun Says:
21 August 2010 at 5:28 am.
If the item is stolen from the delivery truck outside the store, the supplier takes the loss.
Once the item is inside the store, the store takes the hit. If the store makes a $1 profit on 25 items, the theft of one single $25 item will wipe out the profit on the 25 previous sales. Businesses often operate on thin profit margins. Theft makes the difference between success and failure.