Caporegime
By the - staff - cars in the OC/UK car park I've seen over the years, I'd say the margin is a healthy one!
PC Hardware retail margins, what really are they?
- Thread starter PhoenixUK
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Soldato
I would say the turnover is healthy and the margin tiny in comparison.
My example still stands. Would you rather a margin of 1% on 50 million turnover or 10% margin on a few hundred thousand?
They got caught out most likely due to holding stock when there was a price drop or sudden shunt in exchange rate. Some companies hold a lot of dollars too, this reduces risk but can make you less competitive if the pound gains suddenly.
Conversely one etailer could also be sat on hundreds of a product when the dollar shoots up, they then find themselves with a £30 advantage they'd be silly to not take advantage of.
Caporegime
Well, obviously it depends on how risk averse you are. A 10% margin on £500k is obviously a lower monetary sum than 1% on £50m, but a 10% margin gives you more security around fluctuations in costs, and you're not going to find yourself making a loss because of comparatively small increases in your marginal costs.
It depends on what kind of org you are and how the city views your performance.
Ultimately, revenue is vanity and profit is sanity. Revenue means nothing without profit.
Soldato
Alan Sugar quoting.
Most retail models are high turnover with a lean margin, unless of course, you're a small niche or independent. Then it becomes more about product selection and tailored service (excuse the pun).
Soldato
It's your topline or volume of business, before any deductions.
So if my company sold lollipops for 10p and we sold 100,000 of them with no other source of income, we'd have a turnover of of £10,000.
That's not to say our overheads aren't more because of wages and other costs.
So if my company sold lollipops for 10p and we sold 100,000 of them with no other source of income, we'd have a turnover of of £10,000.
That's not to say our overheads aren't more because of wages and other costs.
Alan Sugar quoting.
It was around long before Sugar was popularised. It's true though.
Caporegime
Turnover is the ammount of money they take in, before any costs such as rent of premises, cost of stock, wage bills, maintenance, staff benefits, Fuel Bill for Spie's Ferrari ... etc ...
(i jest about the last part)
Soldato
^^^ I sold him Canary wharf last night.
The deal was of epic proportions.
The deal was of epic proportions.
Turnover is the ammount of money they take in, before any costs such as rent of premises, cost of stock, wage bills, maintenance, staff benefits, Fuel Bill for Spie's Ferrari ... etc ...
So what happens with profits?
Caporegime
Gross profit is turnover less cost of sales (stock and direct sales costs).
Net profit is gross profit less admin costs (staff, rent, bills, etc).
Associate
If you think PC hardware has high margins, take a look at a Mac!
e.g. £250 for a 0.26Ghz processor increase and 70GB more storage space.
e.g. £250 for a 0.26Ghz processor increase and 70GB more storage space.
We make around 10% on TV's, so that an average of around 65 quid profit when selling a 42 inch screen which is not much when you consider we deliver free however we make our money on the install. The wall bracket costs us around a tenner and they are sold for 50 pounds. Then installing it on the wall is another 90 pounds so its not too bad at the end of the day.
Sony and Pioneer where much better, we had 25% margins on them in the past as they work very hard to fix the prices.
You really have to sell huge volume to make money
Sony and Pioneer where much better, we had 25% margins on them in the past as they work very hard to fix the prices.
You really have to sell huge volume to make money
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Soldato
This sounds about right. I work for a service related employer (workwear rental) the marketing department is always banging on about its high customer satisfaction & the fact that is customer service is better that that of its few competitors (there are not that many independent firms in my line of work now, the recession & constant takeover of smaller firms by the big companies in the sector have put paid to lack of competition these days)
I think this is true because I've not lost any customers to poor service or to a competitor in the last couple of years. Having said that it does charge more than its competitors though (it does price match sometimes though) I think I do give them the best service I can (I turn up on time & every week, deliver & collect the items they pay for, which is more than can be said for the competition) when I talk to a new customer, I ask who they used before & most of the time, the reason they have started with my firm is because of the poor service (turn up when they feel like it, items go missing, charge customers for things they've not received, say they've not received payment etc. )
Soldato
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That's price, not margin.
Apple's profit margin on their own products is understandably high - for other companies selling their kit, it is higher than some pre-built PCs you'd buy on the high street, but the Macs themselves are not the money makers by a long chalk.
Soldato
The grubby government taxes you and what is left after that can be invested in the company or be used to buy a red 599