Can someone who knows retail sales answer this?

Yes. Fair way to look at it. A giant, like Walmart, can afford to sell some stuff at their cost just to get it out of the store and out of inventory. A tiny business, like a mower shop (ahem) can’t.
FYI standard markup is 20% over COGS (Cost Of Goods Sold.) Walmart and Co can subsistence on such a tiny mark up because their genius is selling in bulk.
A tiny business, like a local mower shop’s price setter’s genius was price it until the customers squeak. As a result several of the parts we sold were at 100% COGS.
However wholegoods (entire lawn mowers etc) were at just 20% because the price setter recognized that customers were willing to drive 50 miles to our nearest competitor to save $1500.
So yeah. Out with the old, in with the new.

In addition to what @Dutchess_III said, large retailers will often get incentives from manufacturers to lower prices of older goods to make room for newer models.

They probably just want to get rid of it at this point.

Jewelry markup is typically 2 to 3 times wholesale. 5 to10. times from raw material if you fabricate the item.

I googled, specifically looking to see what the Costco markup is, because I know it’s low. This from “Inc.com” explains what the typical store markup is, vs. Costco. Costco makes the majority of its profits on membership fees, but here’s an explanation about other stores, which according to this site, is 25 to 50 percent. Therefore, if a TV sells for 1000 dollars, the cost may have been 500 dollars.

Oddly enough, the process starts with not trying to make much money. Unlike the typical 25 to 50 percent or more markups at most retailers, Costco caps its mark-ups at 14 percent for outside brands and 15 percent for Kirkland (in-house) brands.

But in many cases the markup is significantly lower, which is why the average mark-up across all Costco products is 11 percent. Roughly speaking, if Costco pays Hewlett-Packard $50 for a set of printer cartridges, you’ll pay somewhere around $55.50.

Of course low mark-ups make it really hard for Costco to generate a profit after factoring in costs of operation, etc.

@jca2 true except they take in billions in membership fees, which makes up for the low margin

@elbanditoroso You’ll see that I wrote in my comment that they make the majority of their profits on membership fees.

The reason I posted that was not so much to show what Costco makes, but to show that other stores have 25 to 50% markup (for those who were speculating, above, what stores mark their stuff up for).

My daughter has a shop that sells jewelry.
If it costs the shop $500, they sell it for $1,500.
Regarding televisions: they may be making room for outdated models.

With electronics especially, the lower price is truly a clearance price. If I’m a merchant, my merchandise price will reflect not only profit, but costs for overhead. This goes for everything from huge corporate big box all the way down to the food truck in the parking lot.

If (again as a merchant) I receive a group of items, such as a shipment of jackets, I will sell them at a reasonable markup reflecting overhead and profit. If I’m expecting more in, and I need room, or I don’t want last year’s model competing with this year’s, I will sell at a clearance price. If the item has been really successful, I might even sell the clearance items at below cost, especially if my profit margin on the line has been successful.

There are also items known as “loss leaders” priced at a loss to get you into the store (digitally or physically) so you will buy other items that make me a decent profit.

I worked in retail many years.

Clothing is typically 100% mark-up. So, the store buys for $100 and retail price is $200. Fine jewelry has a higher mark-up. Electronics I don’t know the mark-up. @jca2 said 25–50%, but then the math didn’t make sense unless I misunderstood what she wrote. My guess is she is saying 100% mark-up and 50% profit margin and then the dollar amounts sound right.

Sometimes if an item doesn’t sell at retail, the vendor will give the retailer money to discount the item to help sell it through. So, the vendor might be paying for all or part of the discount to the customer. To give you an idea, I worked for several clothing vendors, snd my discount was 40% off of cost with all of them. So, if the Calvin Klein jeans were $40 cost, $80 in Macy’s to the customer, I bought them at $24.

The retailer will sometimes advertise an item below cost as a Loss Leader. Loss Leaders are (or were I don’t know now) ilegal in some states. Large companies like Walmart could sell some items below cost banking on the customer buying a lot more while in the store. This is seen by some as an unfair business practice and hurt local shop owners.

Also, some states have laws against what are basically permanent sales that amount to false pricing. If the price is always 30% off, then that means it is not really the higher price before the discount.

Retailers will eventually mark items down below cost to turnover the merchandise, because taking space with items not selling well is a cost. Better to take the loss on the items and fill the space with items that will sell.

I think there are laws against usery….of which over pricing is kind of one.
It’s all about the customer’s perceived value though.

^^Usury is loan sharking, and in the early 80’s many of the protections that had been in force were gutted. That’s why credit cards can charge 25% interest.

Maybe you are thinking of gouging?

@Dutchess_III: Cut and pasted from Wikipedia:

Usury (/ˈjuːʒəri/)[1][2] is the practice of making loans that are seen as unfairly enriching the lender. The term may be used in a moral sense—condemning taking advantage of others’ misfortunes—or in a legal sense, where an interest rate is charged in excess of the maximum rate that is allowed by law. A loan may be considered usurious because of excessive or abusive interest rates or other factors defined by the laws of a state. Someone who practices usury can be called a usurer, but in modern colloquial English may be called a loan shark.

I know what literal usary is. But I think you can get in trouble for charging an excessive amount for a product even if there are fools who buy the product.

@Dutchess_III Just trying to help, not being critical. If it was to the point of breaking a law it would likely fall under gouging, monopolistic behavior, or collusion, depending on the specific situation.

I briefly worked in electronics sales in college for one of the big box stores. Some things have a huge markup like cables are in the range of 300% The budget stuff like an entry level stereo has little to no markup. Sometimes they’ll sell below cost if they know they’re going to sell a cable kit for example. The big markdowns are to rid the inventory so they can use the space for something else. If inventory is not moving and is just eating up warehouse space it’s taking profit away from inventory they could have in that space that moves faster.

Markup on consumer electronics is nowhere near 100%.

It could be a loss leader. It could be a discontinued model the mfg sold cheap. It could be worthwhile to sell at a loss to free up cash and space for other products.