Retail margins are far better than lending margins. A furniture store owner once asked me how middle tier finance companies could charge such high rates (18% range) on their paper to the customer. He thought that an insult yet had no problem taking a standard charge card form a customer (21%) and looking at his books his 200% mark up looked very attractive. Did he have overhead sure, paid his staff waitress wages and commission then had a smirk on his face telling me is nicked and seconds area at 50% were still well above his cost.

Not sure where they are getting 200% margins as the furniture industry has suffered some of the worst blows of any group over the last 3-5 years. What used to a largely within the US industry (a big portion of which is in the NC/etc. furniture belt) has now moved/is moving overseas. The materials cost and labor has driven large portions of the industry out and killed most margins for the retailers.

I think even the Amish are having troubles, but they work on a minimal model.

When a guy stops paying on a car, you go get it back. A guy stops paying his loan, you garnish wages and he files BK13...you got nothing.

I am not sure about you, but here mortgages are not claimable on bankruptcy - you stop paying you lose your house, cars they have the car to repo and hope it has maintained its value. Credit cards are a risky business and rates are set to accomidate that. Hence 18+% APR for credit for some folks. Even those of us with good credit get dinged to cover it. Whether you believe it or not, credit card companies set rates and such based on the probabilty that the pool will lose some money (credit holders will file bankruptcy and/or default on cards) - your personal rates are built to cover that, so in my eyes, there is no loss. You assume the risk for lending the money and as a reward, you get high and outrageous interest rates. If you are right, you cover losses, if you are wrong one way you have huge gains/the other you take the hit - I have no sympathy.

Hence, the worse your credit, the higher your rate. Which is actually counter-effective to your situation - but people don't realize that. Please reference the Suze Orman web site if you need further explaination here.

I know the credit unions and the like also make assumptions in this regard absorbing the bad in the rates of the good. Although they are more friendly.

If retailers, small business and lenders and such did not have a margin - why would one even consider running or owning a business??

To buy diecast for $2.00 or $2.49 or even $3.49 or more and sell them for that as a regular practice is just not business smart. I would venture a guess it would be a short lived business.

I would also venture a guess that the margin from Manufacturer to wholesaler is much larger than wholesale to retail - especially in a publically held company such as RC2 who is trying to recoup losses over previous years with the line and investment costs on something they have run into the ground.