The actual retail margin is, I read today in the WSJ, 1-2%.
You'll notice quite a few things missing from that graphic between the $5.67 "cost" and the $14.00 retail price. I'll list just a few of them here:
1. Retail labor (sales employees, management, etc.)
2. Facility costs (rent for retail space, maintenance, etc.)
3. Security personnel
3. Employee benefits
5. "Shrink" due to loss of product, theft, etc.
6. IT and other administrative costs
That barely scratches the surface, but you get the idea.