The New York City Profit Calculator


New York Magazine has a fascinating feature in today's issue: The Profit Calculator. It covers a cross-section of New York City businesses and studies how they make their money. Chock full of interesting little details, such as

  • For a dollar store, it's all about turnover. One store can sell a trailer of cookies (162,000 cookies) in four days.
  • For a copy shop, walk-in customers are a negligible percentage of business.
  • For a diner, a large menu is a liability.
  • Each visitor to the Museum of Modern Art costs about $50. The $20 suggested donation doesn't even cover security and utilities.
Comments (15)
  1. John Goewert says:

    I’ve always wondered how places like those stay open. Especially the Yoga studio. Having my own stores in a very niche market, people ask me the same question. Especially with a product that can be bought via the internet and shipped easilly.

    Basically, retail price is 30 to 50% of wholesale prices. With an average month being $16,000 in sales ($40k in Nov/Dec) is $240,000 a year. Rock on, right?

    Minus rent, COGS (since it’s physical inventory), employees, electricity. That really is only like $30 and a cup of coffee at the end of the year. It’s growing toward break even, which is $5000 a week instead of $4000 a week we are doing now.

    The frown from me is that over half of our clientelle walk in with bags of video games from the Game Stop two doors down and then frumple when a great board game is an expensive $30!

  2. George Jansen says:

    So, if I live on the East Coast, visit New York twice a year, and don’t visit MoMA, I’m saving them $60 per year. Can I deduct it?

  3. KristofU says:

    Wow, some places have tremendous turnover, yet a tiny profit margin. E.g. the pizza place.

    I love New York. The only place in the world where you can just step out of your hotelroom, and have something to do instantly.

  4. Bob says:

    John: *Frumple* makes me a *happy camper*. Great Star Control reference there.

  5. hexatron says:

    Please do not fret over the ‘poor’ MOMA. I think they must factor the cost of the art and their fine new building into that $50. Twenty is a ‘what the traffic will bear’ number, and represents a healthy profit, except for the minority of patrons who use several rolls of toilet paper during their visit.

    And it isn’t a SUGGESTED DONATION (the city museums have that) it is an ADMISSION CHARGE.

    For high-power poormouthing, get some Ivy League alumni begging letters ("you’re help is vital if we are to add that precious eighth billion bucks to our endowment.")

  6. Merus says:

    Mr. Cranky: certainly, there are other cities in the world. Is it entirely reasonable to expect a man who lives in the United States to write about them? Surely there are plenty of blogs out there, including those by people closer to said cities and are probably more qualified to write about them.

  7. Publicus says:

    The majority of the little people are penny wise and pound foolish.

    Which means you should focus your business on the pound and not  the penny.

    If you rob people of $10, they will kill you. But if you rob them of $100,000, they will love you. This is how Goldman made their gold (Except they are robbing the nation of billions, and not just $100,000)

  8. Publicus says:

    Forgot to give a example the little people will appreciate:

    Subprime mortgage brokerage business.

    Now you know why robbing them of $100,000 and they will love you.

  9. Matt says:

    Raymond, Merus,

    What’s with the Mr Cranky bashing?

    I read his comment as an entirely fair counterpoint to the previous comment by KristofU.

    I think you’ve both unfairly assumed it’s a criticism of this blog entry or the magazine article and jumped on it without considering it in the context of that adjacent comment.

    [It wasn’t clear to me that Mr Cranky was responding to another comment. (I see each comment out of context on the moderator page.) -Raymond]
  10. Humphrey Bogus says:

    The problem with that MoMa estimate is that it mixes marginal cost and average total cost.  Each visitor that walks in the door doesn’t cost the museum $50–the electricity bills and staff salaries on a given day are the same whether 1 person or 1000 walk in (as are the costs of new artwork).  They’ve simply allocated all of their fixed + variable costs across all of the visitors, which is generally a poor choice in managerial accounting, as it leads to results that don’t always make sense (ie, we’d be profitable if only we’d padlock the front door to keep more people out).

  11. Ashley Ross says:

    Matt, Mr. Cranky:

    No one said that KristofU was asserting his statement as universal unsubjective fact. I’d say his immediately preceding statement ("I love New York.") lends a lot of subjectivity to what he says next. With that in mind, arguing against what he said, as if it were a statement of fact, is just pedantic and nit-picky. :P

  12. Mr. Cranky says:

    New York is generally interesting, but it’s hardly the *only* place in the world with lots of things going on.  Tokyo, London, Paris, Rome, Amsterdam, Shanghai, Singapore, Hong Kong!, Rio, and undoubtedly plenty of places I haven’t been come to mind.

    [If a Tokyo, London, Paris, Rome, Amsterdam, Shanghai, Singapore, Hong Kong, or Rio newspaper wrote an article covering a cross-section of businesses in their city, then I would link to that, too. (Assuming I can read it.) -Raymond]
  13. Matt says:

    KristofU presented an overly broad argument (it did border on the universal) and in this sort of conversation it’s fair to pull him up on it. Mr Cranky’s point was valid, but his comment had been taken out of context.

    And that was my point – comments are a conversation and it was unfair to Mr Cranky that his comment was taken in isolation and out of context. I’m not saying that Raymond or Merus took Mr Cranky out of context deliberately, but by doing it accidentally they skewed the conversation. The beauty of blog comments is that such errors can be pointed out, and the conversation can be "unskewed."

    Nitpickers Corner

    I appreciate that Raymond cannot change the blogging software and that the software presents comments to him without such a context.

  14. Anon says:

    @Matt

    That was a very well argued and balanced comment. You are aware that this is the Internet, right? We don’t take kindly to that sort of thing here.

  15. John Goewert says:

    publicus: If you rob people of $10, they will kill you. But if you rob them of $100,000, they will love you. This is how Goldman made their gold (Except they are robbing the nation of billions, and not just $100,000)

    Sounds like DaBeers’s market tactic.

    That is one thing I have noticed though, the bigger the amount, the easier it was to get.

    It was dang near impossible for me to get a $1,000 loan. However, $20,000 was a cinch.

Comments are closed.