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Question about best buy..

Originally posted by: GrantMeThePower
IIRC, most of the televisions (i'm assuming u mean home television, not computer monitors) are marked up about 40%.
Click to expand...

That's it? Clothing is usually marked up by 100%
 
Lots of random numbers in this thread lmfao



TVs are loss-leaders, generally marked up only a little. If a TV cost the store $218 to get in, they'll charge $250, a markup of only about 15% or so. They bank on you needing extras with it, cable and tapes and an antenna, things that are marked up from $.50 to $5 (1000%) or $7 to $30 (430%). High-end products like LCDs, computers, printers, anything HD, are generally all very low markups, low profit, and make them little to no money.
 
Originally posted by: Sphexi
Lots of random numbers in this thread lmfao

TVs are loss-leaders, generally marked up only a little. If a TV cost the store $218 to get in, they'll charge $250, a markup of only about 15% or so. They bank on you needing extras with it, cable and tapes and an antenna, things that are marked up from $.50 to $5 (1000%) or $7 to $30 (430%). High-end products like LCDs, computers, printers, anything HD, are generally all very low markups, low profit, and make them little to no money.
Click to expand...
So why is is they push them so hard?
Shouldnt they be pushing movies and music instead?
 
Originally posted by: shortylickens
Originally posted by: Sphexi
Lots of random numbers in this thread lmfao

TVs are loss-leaders, generally marked up only a little. If a TV cost the store $218 to get in, they'll charge $250, a markup of only about 15% or so. They bank on you needing extras with it, cable and tapes and an antenna, things that are marked up from $.50 to $5 (1000%) or $7 to $30 (430%). High-end products like LCDs, computers, printers, anything HD, are generally all very low markups, low profit, and make them little to no money.
Click to expand...
So why is is they push them so hard?
Shouldnt they be pushing movies and music instead?
Click to expand...

Because with big ticket items they can push accessories, service plans and other goodies. That's where their bread and butter is. Movies/music are loss leader items as well.
 
Originally posted by: shortylickens
Originally posted by: Sphexi
Lots of random numbers in this thread lmfao



TVs are loss-leaders, generally marked up only a little. If a TV cost the store $218 to get in, they'll charge $250, a markup of only about 15% or so. They bank on you needing extras with it, cable and tapes and an antenna, things that are marked up from $.50 to $5 (1000%) or $7 to $30 (430%). High-end products like LCDs, computers, printers, anything HD, are generally all very low markups, low profit, and make them little to no money.
Click to expand...

So why is is they push them so hard?
Shouldnt they be pushing movies and music instead?
Click to expand...

Because you need them to use any of the other stuff. Can't go into a store and buy an antenna, take it home, and hook it up to nothing, can you? You gotta have a TV, and if you get the TV from them you're far more likely to come back and get the accessories, or the warranty, or anything else from them.

It does vary from retailer to retailer. Radioshack has a limit of 36% margin that they need to obtain for a store to be profitable. Many items in the store run in the 60-75% margin, while TVs and computers run around 25% margin. Cellphones run under 20% usually, and in some cases they LOSE a few bucks selling you the phone. That's why they push their $50 warranty (almost 100% profit), the $50 accessory bundle (cost them $14), and anything else they can, because that 20% margin on the phone jumps up to 42% with all of that stuff included, or even higher.

Walmart I'm sure has a much lower margin limit, (BE point) probably around 25% or so. They also buy things in a lot higher quantities than smaller chains, so get better deals than anybody out there. So I'm sure their markups are a bit higher than BB's or CC's or RS's. But the math is basically the same.
 
Originally posted by: azazyel
Originally posted by: GrantMeThePower
IIRC, most of the televisions (i'm assuming u mean home television, not computer monitors) are marked up about 40%.
Click to expand...

That's it? Clothing is usually marked up by 100%
Click to expand...

How are you going to compare margins on Electronics and Clothing?
 
Originally posted by: MrChad
Originally posted by: shortylickens
Originally posted by: Sphexi
Lots of random numbers in this thread lmfao

TVs are loss-leaders, generally marked up only a little. If a TV cost the store $218 to get in, they'll charge $250, a markup of only about 15% or so. They bank on you needing extras with it, cable and tapes and an antenna, things that are marked up from $.50 to $5 (1000%) or $7 to $30 (430%). High-end products like LCDs, computers, printers, anything HD, are generally all very low markups, low profit, and make them little to no money.
Click to expand...
So why is is they push them so hard?
Shouldnt they be pushing movies and music instead?
Click to expand...

Because with big ticket items they can push accessories, service plans and other goodies. That's where their bread and butter is. Movies/music are loss leader items as well.
Click to expand...

Don't forget the PPPs....pure profit...

 
OK, so lemme axe ya this:

I understand that the new game consoles sell for less than they cost to make.
E.G. the Xbox 360 is being made for 400 bucks but it will retail for 300.

How does the retailers profit work with this?
Is Microsoft selling the units to Best Buy for 250 each?
 
Originally posted by: shortylickens
OK, so lemme axe ya this:

I understand that the new game consoles sell for less than they cost to make.
E.G. the Xbox 360 is being made for 400 bucks but it will retail for 300.

How does the retailers profit work with this?
Is Microsoft selling the units to Best Buy for 250 each?
Click to expand...

Probably more like $285. Microsoft makes the money back selling games and licencing design rights to third party software publishers. Playstation and Nintendo do the same thing.
 
Originally posted by: Sphexi
Lots of random numbers in this thread lmfao



TVs are loss-leaders, generally marked up only a little. If a TV cost the store $218 to get in, they'll charge $250, a markup of only about 15% or so. They bank on you needing extras with it, cable and tapes and an antenna, things that are marked up from $.50 to $5 (1000%) or $7 to $30 (430%). High-end products like LCDs, computers, printers, anything HD, are generally all very low markups, low profit, and make them little to no money.
Click to expand...


I'm not sure about the 200 dollar TV's, but on the expensive stuff, there is a much larger markup for full retail. They are never loss leaders until they go on big sales. Especially LCD's. You're right that they don't make as much on these things as they do on accessories. Things like cables are marked way up.

I'm also only going off of number i remember from when I worked at good guys, and that was like four and a half years ago, but I really doubt that the margin has decereased by 30 percent in that time. Just ask someone what the employee price is at Good Guys-Its store cost for most of the stuff +5-10 percent. Its a listed price on the part screen at the store. THere is a signifigant mark up, but like i said, its less than 50%, whereas cables can exceed 100% markup easily.
 
Originally posted by: Whoozyerdaddy
Probably more like $285. Microsoft makes the money back selling games and licencing design rights to third party software publishers. Playstation and Nintendo do the same thing.
Click to expand...

I'm sorry. Guess I wasnt clear. I understand Nintendo makes most of their money from game sales.

I'm talking about the retailers. How much money are they making? Is it really worth their time and effort to stock the newest game systems when they only make 10 or 15 bucks each?
 
Speakers (except Bose) always have HUGE mark up. CLose to 100% (at least they did when I used to work there). But things like Cameras and Camcorders were really low. maybe 10%-15%.

Accessories are always high. Ever notice how an audio cable is $30 at Best Buy and $5 online...
 
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