Asked November 11, 2015, 9:27 AM EST
Volusia County Outside United States
It appears that the shop owner is selling a perishable product. The shop owner purchases the x units of a product and marks up each unit by a certain amount for a profit margin. It appears that profits generated from the units sold are barely able to cover the total cost of all the units that were part of the initial purchase. I agree that the shop keeper is not generating a profit because he is not selling a significant number of units purchased in the initial purchase.
I would ask why is the shop owner consistently placing large orders and only selling quantities that barely cover the cost of the order? Why does not the shop keeper order quantities based on previous sale records.
If the shop keeper is able to sell greater quantities or nearly all of the items that are part of each order, hopefully he would be able to generate a profit selling the items assuming that his profit margins cover all operating and overhead expenses.