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I was out at Best Buy today (the infamous
one that had had a customer arrested back in April) and noticed an
interesting sheet of paper next to the checkout area: it appeared to
be a sales projection for today. If I read it correctly, their
"sales budget" for today was $119,000.
That's interesting. I'm always curious about what things cost, or
how much different businesses make. Let's see what that would
imply. Note: aside from the $119k number I saw at the store, all the
rest of these numbers are swags (scientific wild-ass guesss, for the unintiated.)
- $119k/day * 365 = $43.4 million/year. That might be high; I'm
guessing Saturday is one of their highest sales day. $100k/day
would still be around $36 million/year.
- What would the sales force cost? I don't know how many people
you need to work a store like that .. let's assume 40 people at
$10/hr for 12 hours. That's around $5,000; it may be a little
higher because of higher paid people, so assume $6,000.
- I've browsed around trying to find some real number about Best
Buy, and they suggest their profit on their goods is about 25%.
Assuming $119k, cost of the goods would be around $89k.
- Assume another $2,000 per day for other expenses: electricity,
lease on the store, whatever.
- Assuming 119k/day, that still leaves around $22k profit per
store/day. (If you assume 100k, you get around 17k/day).
The bottom line: that store could be making between 6.2 and 7.9
million dollars per year for Best Buy. That's about 18% profit
margin.
There must be more to the picture, however: Hoover's
reports that for the fiscal year ending in Feb '02, Best Buy's net
profit margin was 2.9%. Some of that obvious comes from the central
operation, but my estimates of the costs per store are probably low in
some ways.
(BTW, I did find some page that said that the average sales per
store were around $36 million annually. So I'm in the ballpark.)
4:47:37 PM 
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