Markup on Electronic Goods Wholesale to Retail

[wyldman100]

Hi,
Does anyone know what the typical markup is on consumer electronic goods from wholesale to retail?

I am looking to sell mobile phone products, PDAs and Sat Nav devices online but I am finding the wholesale price of these products very expensive with very low margins to work with.

For example I have seen some of the products I have received quotes for at wholesale cost that I can go to Amazon or other larger stores and buy cheaper at retail cost or in other instances where selling something for £400 I would make £1.

I have also looked in to buying in bulk and was told that if I bought +10 units of a £400 device I would get an additional £1.50 off per unit.

If I want to compete on price with the bigger companies the typical markup looks like it is from <0% to 15% with most things between 5% and 10%. I might make about £20 - £30 per £400 PDA for example.

Does this all sound normal?

Will the larger companies be getting big discounts as they buy in bulk?

Should I not worry so much about the markup and concentrate on just making £30 per unit and try and sell in quantity?

Any help much appreciated.

 

[UK2004]

Economies of Scale play a big part in retailing products, amazon can buy several thousand units at once so their price will be alot cheaper, often they will deal with manufacturer direct so as to cut out the distributors margin.

Don't know if you have already but remember credit card costs of each transaction off of your margin.

If you want mroe advice about getting things cheaper please PM me, don't want to discuss margins I get online as I don't want cometitors seeing!

 

[PERCY67]

It's a real cut throat market and as such you may struggle,

To give you some idea.

DSG who own Currys, Dixons and PC World last month it announced it turned over 4 billion to May 1st.

It's pre tax profit was 90.5 million. So as stated it really is economies of scale.

Yes they have lots of staff, big outlets, but they also have buying power. Even a wholesale supplier will not have this amount of buying power.

 

[Sustainable Marine]

In the marine and leisure market (mobile GPS/Satnav) the margins are typically 15-35%, but online it is a constant battle with buyers selling their loyalty for a few pence.

There are ways to make a good margin, but outright price wars are not it.

 

[ADS-MARKETING]

If you need help with electronics suppliers and mobile phone suppliers I have experience in this market and I can help you with suppliers that can provide better margins.

Margins all depend on how much you buy from wholesale, if you import them and where you sell them (for example ebay would have high selling fees to consider). Another factor is how strong the pound is.

Let me know if I can help.

 

[S88MRG]

Afternoon,

Unless you are using this business as a "piggybank" business forget it. What I mean by "piggybank" is that you have extra resources, man power, around so you can easily and cost effectively deal with orders / packaging etc without increasing your overheads.

Margins of around 10% are normal in the electronics industry, and the competition is vast. Unless you have serious capital, and are buying is huge volumes, you simply will not make any money from selling electronics alone.

Combining electronics with out things, and providing services is the key - people do like businesses that can deal with everything in house - so maybe if you provide installation of TVs, digital TV (sky reseller for example) and sell electronics as part of your "package" these smaller margins are extras, and well worth doing, but alone they make you little or no profit.

Mike

 

[Tax-UK]

You should always worry about what you are being charged, because the wholesale companies do not care if you able to re-sell the products. It sounds like you are contacting the wrong people and should do more research until you find what you need. try to bypass the wholesalers and go straight to the manufacturers

 

[mdsltd]

Original post from 2006! Well done to all for bringing it back to life

 

[Blkcloud]

You should always worry about what you are being charged, because the wholesale companies do not care if you able to re-sell the products. It sounds like you are contacting the wrong people and should do more research until you find what you need. try to bypass the wholesalers and go straight to the manufacturers

My interest is in consumer electronics (TV, W-Machines, Laptops etc.). I would love to buy direct from manufacturers. Trouble is they refer you to their distributors.

Does anybody know what would constitute a good qty volume, to initiate dialogue with manufacturers?

Thanks