Zack, you are ignoring a basic fact... manufacturing electronics has always been a thin margin endeavor, whereas reselling of electronics does not have to be. Admittedly, high volume retailers such as BestBuy, Circuit City, etc operate on a low margin/high volume basis. However, an operation such as the Edig Store has miniscule overhead compared to the aforementioned brick and mortar vendors. A 28% margin is in no way atypical for etailers.
Thank you for the response however the overhead of e.Digital's website is only one component of their cost function.
(Cost of goods sold) - (Reveune generated) = (Gross Profit/Loss) - (Operating Costs) / (Revenue generated) = Operating Margin
EDIT: Any costs associated to maintaining the website is accounted for as a operating expense and not factored into the cost of goods sold.
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