Hey Johnny, how this for long: For the following, take into consideration two pieces of information, that for the sake of argument we will consider as true, thus if I (or they) am incorrect, please clarify, I am willing to learn: FIHTies: "I buy 10 Polo suits for a dollar. I sell 5 at full price of 2 dollars. I have now covered my cost for these suits. Anything that I subsequently take in on the remaining 5 suits is "PROFIT". (Above my cost in this simplified understanding). I can now after covering my cost afford to discount these suits to .35 cents a piece and I am still making money on these suits." Topcatny: "Polo.com is owned and run by Polo Ralph Lauren. Polo.com and the Polo stores themselves sell items at similar retail prices that department stores and specialty stores would sell them for. The typical markup for retail stores is keystone, which is 2 times the wholesale price. Sometimes it is even higher than that but this will make it easier to explain. (In retail speak Keystone, or 2x wholesale, is 50% markup as they calculate the percent of the selling price that is profit and call that markup. So if you buy something at $1 and sell it for $2, that is a 50% markup, why regular math and terminology wouldn't work for the retail trade I do not know.) Manufacturers also work on a similar profit margin, anywhere from 40% to 60% of the price retailers pay for goods is profit to the manufacturer. But we will use the average of 50%. If you take your suit which had a retail price of $1195, the wholesale price would have been approximately $597.5. Polo then probably paid approximately $298.75 to Corneliani to have it made." In which case Mr. Sid loses money on every suit they sell to FB. Although, its not really a lot if you think about it, because if say a $1000 suit costs $500 wholesale and $250 at cost, which means that they lose $50 for every $1000 suit, when they sell them to FB, which one could equate to $750 of potential profit lost. Although, it is not that clean cut, because it's the average that makes or breaks the profit margin. Using what Jon (FIHTies) stated above as a primer: if Mr. Sid purchases, say 20 suits that retail for $1000 each ($20,000) and paid $250 for each at cost ($5000), and then sells 10 of the suits at full retail ($7500 profit), then holds a sale and sells 5 more suits at 50% off ($2500 profit) and then sells the rest of the suits (5 left) to FB for 20% of retail $200, at a loss of $50 per suit ($250 loss). Thus, we are left with: $10,000 profit $250 loss So at the end they lost $250 and made $9750 ($10,000 - $250) on $5000 ($20,000 retail) worth of merchandise. Grossly simplified of course. Jon.