Some retailers have low profit margins, but high volume. The old joke is told about a retailer who sold products below cost, losing a little money on each sale. “I make it up on volume,” the retailer said. (Volume means that the retailer is losing a lot of money, of course, and never breaking even.)
The origin of the joke is uncertain, but “make it up on volume” has been cited in print since at least 1933 and 1934. The joke may be much older—“we depend for our profit on selling a large quantity” was cited in the New York (NY) Evening Post in 1833.
[This entry was prepared with the research assistance of George Thompson, who found the 1833 example.]
6 February 1833, New York (NY) Evening Post, pg. 2, col. 2:
Among the business anomalies which meet the eye of a stranger visiting New-York, are the placards exhibited in the windows of the retail shops, informing passers by that the stock in trade within is selling off at prime cost, or according to the more alluring announcement which some have adopted, at fifty per cent. less than cost. A person attracted by this lure to become a purchaser, must soon come to the conclusion that either the veracity of the dealer is not of the most scrupulous description, or else that he laid in his goods at enormous prices. One in the habit of passing these shops, must at least smile to perceive that notwithstanding their owners have been selling off their goods “at less than cost” for so long a time, their shelves continue to be as well filled as ever. We have heard of one individual, who “wishing to retire in consequence of declining health,” was five years disposing of his merchandise, “at prime cost,” and at the end of this time he found his capital so much augmented that he removed into a more busy part of the city, and entered into trade on a much larger scale than before. How is it that trades-people can sell their goods at less than they paid for them, and yet realize a handsome profit, is one of those mysteries of commerce which we never could penetrate. Perhaps they are like the Irish mercer, who, having assured a lady customer that the silk he desired to dispose of to her actually cost him more per yard than he charged for it, was asked how he then could afford to sell it so low. “Ah, madam, he replied, we depend for our profit on selling a large quantity.”
9 November 1933, The Oregonian (Portland, OR), pg. 6, col. 2:
Watching world agriculture fall deeper and deeper into the troubles of overproduction, one is reminded of the lunch stand man, selling fat hamburgers for five cents, which was less than cost; and who replied to an inquirer, “I’ll make it up on volume.”
Google News Archive
7 May 1934, Lewiston (ID) Morning Tribune, “News Behind the News” by Paul Mallon, pg. 4, col. 4:
The oil men were acting like the peddler who lost money on every sale but tried to make it up on volume.
Google News Archive
5 March 1952, Pittsburgh (PA) Post-Gazette,"Business-Like Government,” pg. 10, col. 2:
This is perhaps the most notable innovation in government economics since Congress decided that though taxpayers lose something on every item in the annual rivers and harbors bill they make it up on volume.
Google News Archive
18 May 1962, Pittsburgh (PA) Press, “New Camera Shot For Carpenter Orbit Mission” by Fred Remington, pg. 50, col. 2:
You’ve heard the story about the man who bought Panama hats in Ecuador for $3.25 and sold them in this country for $3. “You’re losing a quarter on each one,” he was told. “Yeah, but I’ll make it up on volume,” he replied.
Facing Life Alone:
What widows and divorcees should know
By Marian Mira Grosberg Champagne
Indianapolis, IN: Bobbs-Merrill
“We lose money on every item but make it up on volume” is an old joke.
Accounting and Economic Decisions
By Donald A. Corbin
New York, NY: Dodd, Mead
“You cannot lose a little bit on each unit sold and make it up on volume,” goes an old accounting joke.
December 1990, Changing Times (Kiplinger’s Personal Finance Magazine), pg. 100, col. 1:
Those yields mocked the old slogan, “We lose money on every deal but make it up on volume.”
How to get it, keep it, make it grow
By Tama McAleese
Hawthorne, NJ: Career Press
The greatest slogan I ever heard came from a TV advertisement: “We want your business so badly that we are willing to lose a little on each sale and make it up on volume.” (Think about it!)
January 1992, Kiplinger’s Personal Finance Magazine, pg. 52, col. 3:
You’ve heard the old line: We lose money on every sale but make it up on volume.
New York City • Banking/Finance/Insurance • Friday, February 25, 2011 • Permalink
If there was a competition on who sold they most products, then they win.