Gross margin on ipad2 for retailer?

Discussion in 'iPad' started by silroc, Apr 13, 2011.

  1. silroc macrumors 6502


    Jun 17, 2010
    Just curious what type of margin does a retailer make on an ipad2?

    30% or so?
  2. ani23 macrumors 6502

    Dec 22, 2008
    I was curious too but 30% is wayyyyyy to high. My guess was around 5%.
  3. robanga macrumors 68000


    Aug 25, 2007
    Likely closely guarded under NDA but i would be that the margins are relatively slim compared to other Apple products and accessories. When the demand on something is self-generating you don't have to offer high margins.

    I wonder if they are 20% even?
  4. fizzwinkus macrumors 6502a

    Jan 27, 2008
  5. blevins321 macrumors 68030

    Dec 24, 2010
    Winnipeg, MB
    Used to work at CompUSA. This was before the iPad days but on say the $1099 Macbook (before 13-in pro) the margin was about $70. (~6%). On Applecare for that Macbook ($250) margin was $40 (16%).
  6. pettit03 macrumors member

    Mar 20, 2009
    I work at a very large retailer that sells the most electronics but no groceries and my original 16gb Wifi was 486 with discount which was 5% over cost. So about 8-9%.
  7. robanga macrumors 68000


    Aug 25, 2007
    There you have it. If its down in the high single digits- thats a Gross margin of $35 to as much as $75 per sale of iPad, depending on model.

    Not a lot of profit. You still have to pay all of your operating expenses out of that. Accessorize every single sale :)

    Its a much better deal for the 3G carriers because they get all of that service revenue.
  8. benhollberg macrumors 68020


    Mar 8, 2010
    I think this is one advantage Apple has the other manufacturers don't. They can sell their products through their own stores and keep all the money. Other manufacturers must go through third parties and not keep it all. Therefore Apple has an advantage on keeping the price of an iPad 2 low.
  9. Garand macrumors member

    Jun 5, 2006
    The key for retail "Get the feet off the street and into the store". The ipad has the draw to get buyers into the store. If a store sells a 9% margin ipad great - but lets make sure you walk out with a 30%+ margin ipad cover, a 30%+ sale DVD, a 50%+ margin service agreement, and so on and so on.

    You think gas stations sell snakes, lotto, drinks, smokes etc because they to offer convenience - the gas gets you in and the rest of the items pays for the lights, heat, etc.
  10. RKpro macrumors 6502

    Oct 27, 2008
    I used to work at a best buy a number of years ago. Hated it but, anyway...
    One of the reasons I applied is because of the cost+10% employee discount. I later learned how useless it was. Most big ticket electronics are sold pretty close to cost because of intense retail competition.
    (Except TVs for some reasons, they provided good margins.)

    The store only made about 5% on macs, and I think the iPad would be in the similar range.

    Some of the $399-$499 crap from acer and gateway was actually sold below cost to get people into the store, and sell them Accessories (70%-90% profit), and extended service plan (nearly all profit, because repair costs are covered by some type of insurance thing, not out of Best Buy's pocket)
  11. fertilized-egg macrumors 68020

    Dec 18, 2009
    Like others said, the big ticket items are usually sold with very little margin and in some cases even at a loss. They are just the bait to get you to buy the accessories and extended warranty.

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