The costs incurred by the merchant of storage, of employing sales staff in his store and so on, cannot add anything to the value of the commodities he sells. So, its obvious that the difference between the price he pays for these commodities and the price he sells them at cannot be all profit. The profit he makes must be considered as the net profit, after all these costs have been taken into account.
For the industrial capitalist, the difference between the cost price of commodities and their selling price is equal to the difference between their cost price and their price of production, i.e. cost price plus average profit. For capital as a whole, that is the same as the difference between the cost of production and the value of the commodities. In other words, it is the same as the difference between the paid labour (contained in the constant and variable capital) represented in those commodities, as opposed to the total labour represented by them, which includes the unpaid labour, represented by the surplus value, created in the production process. But, things are different for the merchant.
“While the industrial capitalist merely realises the previously produced surplus-value, or profit, in the process of circulation, the merchant has not only to realise his profit during and through circulation, but must first make it.” (p 283)
But, how is this possible? If the merchant buys these commodities from the industrial capitalist at their price of production, then if they sell them at their price of production, they can make no profit. If they add a profit over and above the price of production then we have a situation where commodities are not selling at their price of production, which means that in their totality they are selling above their values. But, we know that cannot be the case. The only other alternative would be for the merchant to be defrauding the industrial capitalist by paying them less than the price of production. But, then that would firstly be to base ourselves on an uncertain and subjective basis for understanding profit, as well as meaning that industrial capital as a whole was being denied the average profit.
As Marx puts it,
“This is realisation of commercial profit by raising the price of commodities, as it appears at first glance. And, indeed, this whole notion that profit originates from a nominal rise in the price of commodities, or from their sale above their value, springs from the observations of commercial capital.” (p 283-4)
The solution to the whole problem resolves itself if we simply realise that the merchant's capital has simply become a separate capital, assumed an independent existence from the industrial capitalist's commodity-capital. If we include the merchant's capital along with the industrial capital in the calculation of the average general rate of profit, the whole problem disappears. The merchant's capital, like the commodity-capital of the industrial capitalist, does not contribute surplus value, but it does have the same right, as capital, to share in the surplus value. All that is required, therefore, is to modify the formula for the calculation of the average profit, so as to include the merchant's capital.
Marx did not include it initially, in developing that formula, because, as he says, at that time, it was necessary first to outline its essential basis, but also because, at that point, the analysis of the separation of “capital in general” into productive-capital, money-capital and merchant capital, had not been undertaken. It was assumed, for ease of explanation, and setting out the fundamental analysis, that the function of money-capital and merchant capital was undertaken by the industrial capitalists themselves.
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