> You mentioned in another message that you work for a computer
> distributor. Is the markup really that small? ie, Newegg and a few
> others are selling this for $180 with free shipping. If the
> wholesale cost is $165, that's not much of a profit margin.
Wholesale isn't a fixed pricing system. As a small to medium sized
business (9-10 employees, $6M/year in sales), we apparently fall into a
certain pricing bracket with places like Ingram Micro and Amax (where
the pundit came from), especially when buying one item. Larger
businesses (officemax, amazon, etc) will buy things in lots of hundreds
or thousands and get better pricing (but not all that much,
surprisingly).
Ben's right. Markup is not enough when you're trying to sell computers
in a retail world. A $600 workstation takes just as much time to build
as a $2k dual xeon server, which means that the profit margin on the
workstation isn't enough to keep people employed at $25/hour (which most
of the builders make, including me, who's actually supposed to be
redesigning the web page until we got caught in a massive onslaught of
sales). The owners are pretty smart about stuff, though, and realized
this a long time ago, which is why the business focuses on servers
(which are a LOT harder to build *right* than people might imagine - not
even the enclosure manufacturers understand this, and we have to do a
lot of physical modification to stuff after it comes to us), and seems
to be doing well (profits are growing, we keep having to break leases
and move into larger buildings, etc).
Anyway, this is pretty OT, so I'd suggest that further stuff probably be
addressed under a different subject or off the list.
-Chris
> distributor. Is the markup really that small? ie, Newegg and a few
> others are selling this for $180 with free shipping. If the
> wholesale cost is $165, that's not much of a profit margin.
Wholesale isn't a fixed pricing system. As a small to medium sized
business (9-10 employees, $6M/year in sales), we apparently fall into a
certain pricing bracket with places like Ingram Micro and Amax (where
the pundit came from), especially when buying one item. Larger
businesses (officemax, amazon, etc) will buy things in lots of hundreds
or thousands and get better pricing (but not all that much,
surprisingly).
Ben's right. Markup is not enough when you're trying to sell computers
in a retail world. A $600 workstation takes just as much time to build
as a $2k dual xeon server, which means that the profit margin on the
workstation isn't enough to keep people employed at $25/hour (which most
of the builders make, including me, who's actually supposed to be
redesigning the web page until we got caught in a massive onslaught of
sales). The owners are pretty smart about stuff, though, and realized
this a long time ago, which is why the business focuses on servers
(which are a LOT harder to build *right* than people might imagine - not
even the enclosure manufacturers understand this, and we have to do a
lot of physical modification to stuff after it comes to us), and seems
to be doing well (profits are growing, we keep having to break leases
and move into larger buildings, etc).
Anyway, this is pretty OT, so I'd suggest that further stuff probably be
addressed under a different subject or off the list.
-Chris