Many of your calculations are borderline ridiculous, and this is no exception. What you've computed is gross profit margins. My first problem is that you dont consider intermediate work. Tiffany doesn't just buy a hunk of gold and a rough diamond then "mark them up" and resell them to you. A Tiffany ring requires hours of craftsmanship. On the other hand, costco basically gets stuff shipped in bulk from a manufacturer, forklifts it up onto shelves, and slaps a new price on it. At costco you're buying the rough material itself. This is like saying that the guy who gives you a haircut charges you 1000% markup on the cost of the scissors he uses to cut your hair. In addition, depending on Tiffany's inventory accounting, the gold in the necklace you buy from them could cost anywhere between $300 and $400 an ounce, throwing the calculation off.

Sam, I will question if you really understand general accounting for cost of revenue. If any hours are put to transform gold to a ring, they are captured in the cost of revenue.