[geeks] FYI: CompUSA is offering OS X 10.5 for $99 (after rebate)

[Robert Brooke Gravitt]

On Oct 27, 2007, at 3:27 PM, Joshua Boyd wrote:

> How much profit margin does a local computer store need?  I would  
> expect
> that on average they would shoot for 30% of the sales price to be
> profit.  At least, that is the markup for plumbers, mechanics, and
> general contractors from what I can see.

How much? As much as they can get, for sure-

You might be surprised at how much/little ( depending on your  
perspective ) margin there is on items in a retail context.

As someone who owned a couple of businesses including a retail brick- 
and-mortar storefront (not computer related), I can tell you that  
there's more to it than
a simple percentage.

The holy grail is to get 50% margin ( or 100% markup ) so that best  
case, you can replace the widget you just sold. Let's say that widget  
A has a wholesale cost of $25. You set the price at $50. Once sold,   
you now have paid for the widget ( net 30/60 ) and can buy another to  
put on the shelf. That's without considering your costs of A) getting  
the widget to you B) rent/utils C) payroll D) Profit!

I was shocked at year end that I'd paid $16,000 for shipping from  
wholesalers. That's insane. We got hit every order for $5, 8, 10.  
It's little things like that add up and chip away at profit.

Retail is really tough - if you are a mom and pop shop, you cannot  
compete with big-box stores or the internet. You either rely on  
people wanting the convenience of getting it NOW! or have such good  
customer service that they'll buy here instead of Wal*Mart or Amazon.

Just my $0.02

--Brooke