Originally posted by sigma:
Originally posted by RT and his SE:
Originally posted by JaTo:
Originally posted by Pete D:
Originally posted by ODC:
Exxon's profit margins are slightly above 10%. That means they sold about 80bn worth of gasoline.

That's pretty low margins for any industry. For comparo's sake, Microsoft makes 30%-40% profit margins off it's software.



Comparing Microsoft with Exxon (or any petrol company) is absurd, they aren't in the same industry, have totally different cost structures and don't have similiar products just to start. Not to mention that the demand for gas is largely inelastic and that gas is a commodity....



Margins are margins and profit is profit; no, MS is not a commodity-based company, but for people screaming about the amount of money being made (a few pennies on the dollar) in gas sales vs. at least HALF of a dollar going to the bottom-line on SW, it again BEGS the question of people's perception on what "screwing" really is.

You are absolutely right; COST STRUCTURE does play a HUGE role in margins and therefore profits. What kills me is that these companies are building equipment to find oil (no mean feat in of itself) and once it's found, they build equipment that plows MILES through rock, mud and sand to suck up oil, pipe it or transport it sometimes thousands of miles away which after getting piped through refractionating towers and "crackers", then makes it's way through yet another form of transportation to the gas station where the consumer fills up.

It takes a s**tload of investment to do the above and the fact that it's still only $2-3/gallon amazes me.



MS sold 17 million copies of XP in the first 2 months after rollout. IRC we consumers buy 250 million gallons of gas a day. When's the next time you'll buy a new OS compared to your next fill up. Would you rather get 30% every 2 or 3 years or 8% every 3 days?



Would you rather pay 10% of each paycheck in taxes or just pay 10% of your gross in April all at once? It's the same thing. 30% is 30%, 8% is 8%.

If it'd make you feel better, you can ask Exxon if they'd be willing to shave 8% off the price now and just bill you in 2009 for 8% of all the gas you've pumped the past 3 years. It'd be exactly the same amount of money either way.

Or, better yet, let them hit you for 30% 3 years from now. After all, it's okay to pay 30% if you've only got to pay it every 3 years.



There's a flaw in your math.
Let's say you buy a copy of full XP home for $149 and keep it for 3 years. MS profits $44 year one and nothing in year 2 or 3.

You put $20 in the tank. The oil company profits $1.60 (assume 8 cent profit per dollar). 3 days later you do the same thing and so on for a year = $197 x 3 years = $597.
Now imagine profiting 24 cents (assuming $3 a gallon) on 250 million gallons every day of the year!
Consumable vs durable goods.
Make more sense now?

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