Electronic Goods Mark up

kikel

Hey All,

This is a question i taught i'd find in the search function but unfortuately it returned nothing. What percentage markup would a distributer have on goods and what percentage would a retailer charge on top of that.
I've found a product that i feel would do very well and i just want to see if it is profitable business proposition? Thanks in advance.
Kieran

artvandulet

I think as standard, the markup retailers will put on electrical is 50%
So if an item cost €40 trade, the rrp would be €60.

I would hazzard a guess that the distributors markup is something similar.
Cost to distributor - €26.67 +50% = Cost to trade - €40 +50% = RRP - €60

eamon234

Definitely not max on electricals would be 30% for most retailers

daithi69

In some situations the retailers markup may be even smaller. If you have a product that is in demand and is been sold at a very competitive price by some of the large multiples for around €100 you may only realise between €5 - 10. Depending on your location you will have to compete.

jerryob

the electrical supply chain markups depend very strongly on how many hands the merchandise go thru and the relative buying power of each. There is a trend for large retailers to forego disti's for hi volume own-branded products. Some of these retailers go directly to the factory allowing them as low as 1.5x (33% margin) markup on the LOP price including tariffs. Of course, they will have the luxury of going up to 50% margin since they have put in the effort of going directly to the factory. If an importer is used, this markup can go up to 2.5x (60% margin) of the LOP + tariffs.

For branded products, OEMs expect anywhere between 25-40% margin (the higher margin would be typical of an ODM being used to supply the OEM). Many insist on using a disti network, rather than dealing directly with each retailers, although this is changing. Such disti's claim between 30-40% margin.

One crucial point that is often overlooked when feeding new product into retailers is the cost associated with return-rates. The cost of all returns back to the retailer is passed back thru the chain to the factory. The stronger factories pass the cost back down to the component suppliers. Returns need to be less than ~3%; anything over 7-10% and the product will not be profitable for importers.

eamon234

Great info there jerryob!

kikel

Great information there. Thanks everyone.