Most products have at least a 50% markup [that means base cost is 50% of
selling price, not including shipping, handling, storage, marketing,
advertising, sales]. With some electronics it has been as low as 10% to
cover costs and have a minimal profit. A net profit of 1.7% is hardly
worth doing business. Supermarkets work at at 2-5% profit.
No. 1.7% is unsustainable. What happens when they have a sale? The only
"profit" some vendors will make is a tax writeoff for selling products
below cost. The rest of the profit will come from the rebates they offer
you so that they can use your money for 8-12 weeks before sending you a
check.
Apple is very good at business. They offer excellent products at a fair
price with enough cash left over for R&D. How much of the competitors'
1.7% profit goes to R&D?
Wrong. You are arguing the pc makers have a profit margin of 0 or less and
then you say 1.7 is unsustainable?
No wonder macs have a reputation for being bad at business.
On Thu, Apr 9, 2009 at 2:28 PM, Tom Piwowar <[email protected]> wrote:
> >As to the profit margin, so what? That's the standard profit margin
> >for the grocery industry and we're still able to go shopping for
> >groceries year after year. Even still, companies come and go all the
> >time; is this news to you?
>
> Are you really that clueless about business economics? I expect better,
> even from a WFB. To stay in business these companies are either going to
> raise prices 50 to 100% or start sourcing their parts at junkyards. A
> profit margin that slim is simply unsustainable.
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