I had no idea our crop was indirectly causing a health issue. I've decided to sell to the Cartel and instead grow poppies.
Then again I'm going to miss Tara.
Ranked: U.S. Industries With the Highest Profit Margins
How are American tobacco companies still making so much money?
Briefly broken down: they sell an inexpensive and addictive product to a loyal customer base. Suppliers (farmers) have very little bargaining power, keeping their costs slow. And an advertisement ban prevents new players from entering the market.
And while adult smoking rates are trending downward in the U.S., emerging markets are more than offsetting U.S. sales declines.
Globally, the sector’s margin is even higher: at 50%. This translates into 50 cents in profit for every dollar of revenue earned.
Other Profitable Industries
Big Tech’s margins aren’t far behind Big Tobacco. The broader ad-driven space, including companies like Meta and Google, averages a 27% net margin.
The system and application software industry, with companies like Microsoft and Oracle, follow at 23%. And the semiconductor space (chipmakers, designers, and equipment manufacturers) also exceeds 20%.
The chart also highlights the structure of the U.S. market. Some industries are dominated by a few strong leaders (like shoes), while others, such as apps and financial services, have more firms.
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