[Jackangel]

I'm curious to know how much large retailers like Circuit City or Best Buy pay for some of their best-selling items. Specifically, something like an ipod. If 5gb/10gb/20gb models go for 300/400/500 bucks retail, how much does a large chain store pay for them? Or if there's a larger distributor somewhere up in the chain that deals directly with Apple? How much do they pay? I'm sure there's a significant markup here, but I'd like have some specific numbers. I'm also curious about headphones. I wish it were easy to get this info, but ain't no way in hell anyone will give this info out unless you're a friend of his, or unless you go through some pretense to make them think you're a legit business.

Anyone have any hard facts here?

thanks

rp:AUM

 

[LobsterSan]

I once did a stint at a company that manufactures computer equipment, and wholesale pricing (the pricing that goes to retailers) generally runs at about 70-80 percent of the MSRP. A couple other trends worth noting are that the price cut percentage typically increases with more expensive goods, and that buying in bulk will save a few bucks as well.

Considering how much large retailers are willing to slash prices in order to obtain more business, it often times is not worth the attempts to gun for wholesale prices on less expensive items. This is not true in all cases, but sometimes I feel people are mislead by thinking they can obtain ipods for $100 bucks or something. Most resellers don't make that much profit off of the products they sell individually, and rely on the numbers of sales to make money.

 

[LobsterSan]

Just a little addendum to what I wrote...

MSRP is set by the manufacturer, and it is not always what the market actually is. Like the Senn HD600 are rarely found selling for $400+. I had written above that wholesale price tends to be about 70-80 percent of MSRP... I guess it was for my company, but it is probably about 70-80 percent of the 'going market rate' (which is usually higher than the 'discount' prices that you see. I would say that most 'discount' retailers are only making 5-10 percent of profit on the items that they sell.