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More info?)
Nice to hear good info from a Proffessional !
"GTX_SlotCar" <deroy@maine.rr.com> wrote in message
news:2p57oiFh1bo0U1@uni-berlin.de...
>
> "Andrew" <spamtrap@localhost> wrote
>> Who (apart
>> from you) said anything about buying old stock at old prices?
>
> I hate to be picky, Andrew, but this:
>
>>When they buy in new stock from Intel, then they can reduce
>>their retail price.
>
> certainly seems to imply that.
>
> I don't know why people seem to think that large etailers like newegg work
> on such a small profit margin. Some of the smaller companies with a hand
> full of employees are on tight margins, but the larger ones try to average
> about 50% gross profit (100% markup). Small items like adapter cables
> (molex
> splitters) may cost them under 50 cents and they sell them for 4 or 5
> bucks.
> On larger items they may only make 40% profit. Other large items like
> RPTVs
> and appliances have 100% markup (or more for white goods), but are usually
> run on sale. A couple years ago I bought a 50" Toshiba HDTV from Sears. It
> retailed for $2500. With price matching and storewide discounts, I bought
> it
> for $1633. I know for a fact that Sears paid under $1300 for it,
> delivered.
> I was in retailing for years. Starting as a manager for Endicott Johnson,
> 7
> years as a Radio Shack store manager, 4 years with Toro, and 7 years with
> my
> own store before I sold it.
> Let's take an example that most of us are familiar with, like the VGA
> Silencer that many bought a few months ago for their nVidia or ATI cards.
> Let's assume that, like most products of this type, it was made in China.
> Someone (a small US or Euro company) brings the idea to a Chinese
> manufacturer.(China today is like Japan of the 50's and 60's, but without
> the attitude problem.) There it's designed and priced. The item is then
> shipped to the company for about $4. I'd be surprised if it cost 5. The
> company sells it on their website for a retail price of $22. They also
> sell
> it to distributors and large retailers/etailers for about $10. A small
> retailer buys from the distributor for about $15 (sometimes known as a
> "jobber's" price). He's pretty much stuck with selling at retail. The
> large
> companies will perform a (sometimes ongoing) price/movement analysis to
> figure out which price to sell it at to maximize their profit. Competition
> from other large retailers has a big affect on this price. They want to
> capture the largest market share possible, but make as much money on the
> item as they can. They have to find the sweet spot. So, the etailer may
> decide the best price is $21, where they can sell 100 Silencers a day. At
> $22 they lose a large market share to other large and small retailers, and
> at $20 they're just throwing away profit because it won't increase sales
> that much. Usually the price will be less than retail, but of course, as
> we
> can see now, they can sell items like the NV5 Silencer for double the
> retail
> price and still sell out of them.
>
> The rule of thumb is, if you can't make at least 10% NET profit (that's
> after expenses), you're better off investing your money. I hear Google is
> doing very well
>
> Gary
>
>
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