Wholesale and RRP Retail margin?

S

ST_

Well-known member
Hi,

I’m doing an assignment for college. The scenario is i have to provide a strategy for the release of a new camera. I have a question.

- What is the margin between which a camera is supplied at a wholesale price and its recommended retail price?

So far I have made the assumption that it is $12,000 wholesale, and $15,000RRP (AUS DOLLARS). Although the lecturer thinks its too small of a margin.

does anyone in retail know what an "average" margin is?
 
no idea, but if the lecturer thinks it should be bigger, make it bigger, afterall, he's the one giveing you the grade.
 
With a camera, especially a limited market camera, you really gotta dig deeper.

Are we talking panasonic or something like the RED camera? One has a worldwide
distribition network in place. The other would prefer to be 100% direct, but has
a limited distribution channel of specialised reps. Its doubtful that RED is gonna
be in the COSTCO catalog or have a 'grey market'.

The more mainstream you go, the larger the discount. Panasonic will even supply
distributors that compete with its own distribution network. So if you are
Panasonic, you may sell to retailers at 50% MSRP, but at 53-60% to 'distributors'
that will then supply retailers at 45-50%, net 30 or with other incentives.
 
^

Keep in mind it still varies a lot from Dis. to Dis. I'd be shocked if distributors were picking it up at 50% of MSRP. From what I've heard its more like 60 to 70% of MSRP at best. And as someone who personally deals with a direct distributor its even worse for some products like 75 to 85% for them I'd guess and by the time it gets to the stores perhaps 90% :o
 
The stores generally don't make anything on the cameras because they are so heavily discounted. The margins on consumer electoronics are extremely low. They make money on the accessories. Ever wonder why retail stores push Monster Cable and extended warranties? It is because there is a HUGE margin on cables and warranties!
 
Thanks everyone,

Mythfit, The lecturer is also making an assumption, the mark will be based on real life evidence, e.g. If I just increase it (without providing evidence why) I’m still making an assumption and it wont change anything, still get a lower mark.

Greggl, the scenario is JVC professional (in Australia) supplying it to a retailer in Australia. its the JVC GYHD-250U.

thisiswells, its professional electronics, sorry I should have mentioned that.

Also, in my assumptions, I’m saying it will cost $8,000 to make each camera (for the first hundreds units or so) sold at 12,000 to retailers, then sold at 15,000 to production companies.
 
Oh I just realised, JVC Professional Australia would buy them overseas... then sell them to retailers... for the scenario I am just going to stick with that they are being manufactured in Australia.
 
If pro video is anything like pro audio (which I used to sell professionally), the cost is probably around 20% less than the retail price. In order to remain competitive, professional dealers would also discount a camera about 10-15% from the list price. At that point, the margins are very low... Professional dealers make the bulk of their money on tripods, lights, tapes, batteries, and warranties... not on cameras. Just ask any pro equipment dealer. They will all say the same thing (at least in the US where semi-pro cameras are discounted heavily).
 
You must log in or register to reply here.
Back
Top