The retail sector is one of the most diverse industries in the U.S., encompassing everything from agriculture to automobiles to fashion accessories. Some retail sub-sectors, such as high-end clothing and personal-care retailers, can have famously high gross profit margins, but net margins for the industry tend to be low compared to other sectors. This is especially true for web-only retailers, which often see low net margins. For example, Amazon (AMZN) had a net margin of less than 2% for several years prior to 2018, but today commands a market capitalization of $1.7 trillion and a net margin of around 7%. But what really is a good profit margin for retailers? Below covers the points to take into consideration when valuing a company's margins. Key Takeaways + Retailers tend to have profit margins that are lower than in other sectors. + Grocery and food retailers generally have the lowest profit margins, while building supply retailers have the best margins....
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