Wholesale lettuce price yesterday was $10, so retail $12-13, not much of a margin.
But Banks wholesale for money is 1.35%, but sell it on at 4.8%
That would make a lettuce around $28 if they had their way. Keep safe on the road and only buy lettuce, dont borrow money.
Mike Harding said
02:41 PM Jul 7, 2022
I don't think so.
4.8 - 1.35 = 3.45
3.45% of $10 is $0.34.5
Therefore the retail price would be $10.35
86GTS said
04:01 PM Jul 7, 2022
Lettuce get down on our knees, lettuce pray that prices will come down soon.
Craig1 said
05:04 PM Jul 7, 2022
Mike, cost of "goods" is $1.35, selling price of "goods" is $4.80 lor close to 3 times
Mike Harding said
06:59 PM Jul 7, 2022
Ah, OK, I see what you mean.
smwhiskey said
09:50 AM Jul 8, 2022
Craig1 wrote:
Wholesale lettuce price yesterday was $10, so retail $12-13, not much of a margin.
But Banks wholesale for money is 1.35%, but sell it on at 4.8%
All comes down to scale.
So at the risk of being attacked by bank bashers...
If you look at the total profit (which would include profit from other non-lending sources like FX trading) of (for example) CommBank ($8.65b in 2021) against the amount of money invested in home loans (approx $510b) to achieve that profit, you'll find the profit margin for a bank on loans is somewhat less than 1.5%.
Compare that to your lettuce example where the margin is 20-30% and (being generous) the profit margin is probably still at least 10%.
Simon
Craig1 said
07:59 PM Jul 8, 2022
Simon, That bank actually owns very little, sold most of their own buildings, get a lot of " their" money from fools like most of us and then broker a big percentage to hopefuls to pay back for A long time, so I dont get the return on investment calculation by you. So maybe I am dense ?
Wholesale lettuce price yesterday was $10, so retail $12-13, not much of a margin.
But Banks wholesale for money is 1.35%, but sell it on at 4.8%
That would make a lettuce around $28 if they had their way. Keep safe on the road and only buy lettuce, dont borrow money.
I don't think so.
4.8 - 1.35 = 3.45
3.45% of $10 is $0.34.5
Therefore the retail price would be $10.35
Ah, OK, I see what you mean.
All comes down to scale.
So at the risk of being attacked by bank bashers...
If you look at the total profit (which would include profit from other non-lending sources like FX trading) of (for example) CommBank ($8.65b in 2021) against the amount of money invested in home loans (approx $510b) to achieve that profit, you'll find the profit margin for a bank on loans is somewhat less than 1.5%.
Compare that to your lettuce example where the margin is 20-30% and (being generous) the profit margin is probably still at least 10%.
Simon