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Discussion in 'iPad' started by silroc, Apr 13, 2011.
Just curious what type of margin does a retailer make on an ipad2?
30% or so?
I was curious too but 30% is wayyyyyy to high. My guess was around 5%.
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?
my guess is 5-9%
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%).
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%.
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.
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.
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.
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)
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.