Comments: FOTCRâ„¢ minus 9

"Fair" is whatever you can get away with.

Posted by Caroline Greenwell on 16 December, 2023 at 8:00 PM

Caroline is absolutely correct, whatever the market will pay.

Posted by Scoakat on 16 December, 2023 at 11:50 PM

Which would explain why everything is so expensive these days. It's greed running pricing rather than a formula as one would expect..

I asked the internet what a reseller margin should be. It told me: "As a rule of thumb, 5% is a low margin, 10% is a healthy margin, and 20% is a high margin."

340% then is a rip-off. Particularly when it involves receiving one email, putting 3 figures in a web page, sending one email, making one phone call, receiving a wrapped package from a supplier, and handing a package to a customer when they appear at a premises you already have for another purpose. 15 minutes work tops.

Posted by Blue Witch on 17 December, 2023 at 8:00 AM

In broad business terms to make a reasonable profit if you are actually handling the items, in effect financing, stocking, shipping etc etc then you need to double the price you have paid. If you are brokering a deal and not touching goods yourself then 15% is OK. Lots of caveats on price of the item/s of course and if duty needs to be covered etc etc.

Posted by Mr BW on 17 December, 2023 at 8:15 AM

I think that margin does not equal profit. The 340% has to cover premises, staff (including pension, sick & holiday pay, etc.), and a myriad of other overheads. I'm not saying that the items were not overpriced, but just that the figures don't tell the whole story upfront.

Posted by Tim W. on 17 December, 2023 at 9:20 AM

Another cost is advertising and promotion. In your example you seem to have found the shelves from a retailer. But you only found out about the manufacturer by some digging. So is it a case of the manufacturer not advertising directly to end customers and relying on other suppliers. An awful lot of money is spent on advertising - but then how would we even know about a product if they didn't/

Posted by Caroline Greenwell on 17 December, 2023 at 2:10 PM

PS: I still stand by my first comment though

Posted by Caroline Greenwell on 17 December, 2023 at 2:13 PM

VAT is another complication. The retailer could, I assume, claim back the VAT paid to the manufacturer, but still needs to charge it on whatever markup they want to charge (which probably equals Caroline's first comment!).

Posted by Tim W. on 18 December, 2023 at 10:54 AM