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How much do Hard drives really cost?

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Anonymous
December 4, 2006 9:54:34 PM

Hey guys, I was just interested in how much it really takes to make a hard drive from like western digital or seagate, etc. How much of mark up price do retailers or resellers sell for?

How much for a 250gb sata version?

Thanks!

More about : hard drives cost

December 5, 2006 8:09:34 AM

Quote:
How much for a 250gb sata version?

Well, if you want to buy in big quantity, you can get a special prices.
December 5, 2006 1:09:11 PM

Heh, I could probably find out. But then, there are special pricing even between resellers and manufactueres themselves. A Tier 1 integrator that buys more such as Dell or HP will definitly get a much better deal than a reseller such as Directron or Newegg.

Price is not really set, it fluctuates all the time, and can be adjusted for the specific contract/deal. I don't even know how much it costs to make beer, but remember, there are a lot of factors to consider. Overhead expenses, capital expenses, raw material, transportation, taxes, etc... etc...
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a b G Storage
December 5, 2006 2:04:44 PM

Without knowing the specifics on the company and their costs, their supply chain, and distribution, it would be difficult to say exactly how much it actually takes to manufacture the hard drive or the % mark up.

As a rule of thumb, as an educated guess, generally speaking, and conservatively estimating, (enough disclaimers for ya?!) I would say you can bet on anywhere from 25% to 45% mark up over what it actually costs to make the hard drive.

Mark up varies depending on the industry, demand, and the length of time the product has been on the market. Something that has been on the market a long time is cheaper to manufacture than something new. Cars have a mark up of anywhere from 15% if it's a GM product up to 30% if it's a Toyota. Music CD's cost less than $2.50 USD put on the shelf and they retail for at least $10, that's a 400% mark up. Electronics are a high demand product with a high rate of diminishing returns, that's why the latest gadgets sell at a high price and then drop after being on the market for a while. Hard drives follow the same pattern, I remember buying a 13GB drive for $120 and I can now buy a 320Gb drive for less than $100!
December 5, 2006 2:06:52 PM

Quote:
Hey guys, I was just interested in how much it really takes to make a hard drive from like western digital or seagate, etc. How much of mark up price do retailers or resellers sell for?

How much for a 250gb sata version?

Thanks!


LOL... it can be calculated... and if you really want to find out you can use some of the equations that Robert Hall derived for technology manufacturing.

on marginal cost and markup for technology manufacturing
December 5, 2006 2:46:23 PM

I was lookin for that article. Couldn't remember the author's name. Thanks! I wanted to use it in a paper :) 
December 5, 2006 5:19:47 PM

Basically, to sum what we all said up...

Take a micro-economics class. Not Macro, you don't care about GDP and the such... Micro!
December 5, 2006 8:27:22 PM

Quote:
I was lookin for that article. Couldn't remember the author's name. Thanks! I wanted to use it in a paper :) 


LOL... sounds like a real interesting paper... :?
Anonymous
December 6, 2006 10:12:38 PM

How much could you get from a distrbutor such as d&h?
December 7, 2006 12:01:51 PM

Distributors usually sell to resellers (or at least thats how it works in our buisness)... don't know what D&H is, but I can see it being quite a bit cheaper. But like I said, it's only cheaper because resellers always buy in bulk and so they get special discounts...
December 7, 2006 12:42:57 PM

well the first one costs probably a few hundred thousand dollars, and then they each get cheaper as you go along. There is overhead, R&D, sales, labor, marketing all of those add to the "cost".

Take all that out, from all stages of development, and it "costs" probably a few cents of raw materials still in the ground.

READ: Don't ask stupid questions.

Cost != Value != Price

Retail side, the min order from the factory is usually roughly half that of full MSRP. is $199 in some rip-off retail store like bestbuy, $97.50 if you buy a 1,000 from the factory direct.
Anonymous
December 7, 2006 8:19:28 PM

I understand that, but what would you think it costs to get from a distributor?
December 7, 2006 11:32:44 PM

I would assume less 15% + or - 3%
Anonymous
December 8, 2006 1:11:19 AM

From retail or OEM prices?
December 8, 2006 1:17:29 PM

Quote:
From retail or OEM prices?


From Retailers purchase price... you asked what price from distributers... which would be step 2 of the process.

Manufacturing... Distributers..... retailers.......... you.
.Cost+OH&P.........+5-10%.......+15-18%.......+10-20%

Ex: ($60 + 10%=$66) + (7%= $71) + (15%=$82) + (15%=$94)

or something like that... why?... do you have a friend who is a distributer?
Anonymous
December 9, 2006 1:44:15 AM

Sorry, I got confused with myself. I am just interested in these kinda things, dont know why.

You know anyone in distributing?
December 9, 2006 3:03:16 PM

Actually I do... but I don't ask... he handles Car and home audio though... it would be a stretch to ask him for favors outside his arena I think.
Anonymous
December 9, 2006 4:10:47 PM

Like home theater systems?
December 9, 2006 5:15:37 PM

WHITE LABEL (WD Recert) 250G 7200RPM SATA 8M FAC. RECERTIFIED $69.99
WD 250Gb 7200rpm 8MB IDE U100 (#2500JB/ PB) $80.99
WD 250Gb 7200rpm 8MB SATA2 U300 (#2500JS) $79.99
WD 250G 7200RPM 16M U150 SATA (WD2500KS) $82.50
WD 250G 7200RPM 16M RAID SATA3 (WD2500YS) -- NEW $89.50
SEAGATE 250Gb 7200rpm 8M U150 SATA2 (# ST3250824AS/820AS) 5-YR MAN Warranty $83.50
SEAGATE 250Gb 7200rpm 16M IDE (# ST3250620A) 5-YR MAN Warranty $84.50

Thats in CAD Dollars. Multiply by 0.85 for the ammount in USD. For example 69.99 x 0.85 = $59.50 USD for a Fac. Recertified WD 250GB sata.

These prices are quoted from last week's pricelist of a major north american distributor. (wholesaler)

If you buy volume 5, 10, 100, 1000 drives the price goes down by maybe a dollar per drive (at 5, 10, 100, 1000 drives purchased).

-Alex

I'm assuming that this is reasonably near to manufacturer's cost, probably only 5-10% markup at this level. Again, it fluctuates a lot. Raw materials probably account for about half the price, R&D and overhead for the rest. On the larger, higher end drives (750GB) the markup is much higher.
Anonymous
December 9, 2006 11:37:22 PM

Where did you get all that info?
December 10, 2006 3:39:29 AM

Quote:
Where did you get all that info?


As my post says, its from last week's Pricelist of a major north american wholesaler.

These pricelists are emailed weekly to me b/c I run a small business selling computer parts and I use this particular wholesaler frequently.

In order to get wholesale prices you need to have a business number, a PST exemption number, and in some cases a business-class bank account/credit card(in order to setup an account with a wholesaler). Then you need to contact the various wholesalers to setup accounts. It can be a lengthy process, but its worth it.

Some examples of wholesalers: EPROM, Powernode, Supercom, ASI, etc. These(among others) are all major Canadian / North American wholesalers who sell to the vast majority of computer stores across the continent.

Often the prices I pay for computer parts is about 1/3rd the "retail" price displayed in FutureShop or BestBuy.
Anonymous
December 10, 2006 7:47:07 PM

What is your business name? I know about the business lisecense, etc. You have a website?
Anonymous
December 12, 2006 12:15:20 AM

You have a business license?
!