- Nov 21, 2008
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I don't work in the consumer space, but from what I have gathered, it is just huge profit margins. Herman Miller and Knoll both have gross margins 30%+ and net income 10%+, and other luxury goods/fashion brands have 50%+ gross margin and 15% net income.Are there insane licensing fees or some other factor in their COGS or do the expensive designer styles just have huge profit margins?
My best guess is that licensing is more expensive than having in house designers, but a place setting like that probably has on the order of $20-30 in COGS, so before any licensing cost, you're looking at 80-90% gross margin.