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If iPhone X costs $370, then why are you...
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Having worked nearly a decade in the auto industry, at the manufacturer and importer/dealer level I'm going to challenge this statement without some further clarification and information. Most dealerships end of day are not operating at anywhere near a 2% net profit level - if they are they should probably fold. The margin levels vary greatly for vehicles sales, financing, service and maintenance, extended warranties, consumer discretionary, etc. If one were to get to a "net" 2% level across the board, significant losses would have to be occurring in the major three: vehicle sales/margin; financing; service and maintenance.
Can you elaborate with any links that would support this? Truly interested.
bruinsrme
macrumors 604
Funny thread.
There was another thread and a person said most people can’t afford it so they financed their new iPhones.
Yeah because carriers simply used to give phones away.
Many seem to think the price was within their expectations.
If Apple ate millions of phones or devices every year I am sure their profit margins would be lower.
Not the case though
There was another thread and a person said most people can’t afford it so they financed their new iPhones.
Yeah because carriers simply used to give phones away.
Many seem to think the price was within their expectations.
If Apple ate millions of phones or devices every year I am sure their profit margins would be lower.
Not the case though
Chupa Chupa
macrumors G5
I wasn't make a case FOR credit abuse, just stating that people tend to live beyond their income. But 2008 was, in big part, due to mortgage underwriters (including the gov't) giving out more credit than a consumer could absorb, i.e., well above an acceptable debt:income ratio. People were getting approved for mortgages that they could in no way afford PLUS cash on top of that. There were interest-only loans, no downpayment loans. All sorts of insane stuff going on.
Post 2008 credit is a lot tighter though. Big mortgages much harder to get without proof of income. Debt:income is more stringently observed, & downpayment usually required. Credit card limits have also tightened.
None of that changes the face credit is still king. The economy would collapse if we had to pay in full for everything. There is such a thing as using credit responsibly. That is NOT what 2008 was about.
Reports I've read indicate, that on average, housing doesn't really appreciate. In certain markets, over certain time frames, they do. And possibly dramatically. But housing can drop dramatically in price when bubbles burst.
And you can spend quite a lot of money through the years maintaining a house. Replace carpet. Replace roofs. Replace heat pumps.
[doublepost=1510410084][/doublepost]
I've seen reports in the past about just how little a farmer gets out of the money spent on a box of cereal. The farmer sells the base raw product (corn, wheat, I'm going to ignore the sugar component in presweetened cereal). The base food goes through intermediaries. Needs to be shipped. Processed and shaped in factory. Boxed and sealed. Shipped to stores. Sold to consumers. Everyone in the process wants to make a money on their portion of the chain. Even if just their hourly wage for the time spent. Taxes are paid along the way.
Apple does a better job than most in making a desirable product that sells for a larger margin than many of their competitors. Nokia used to make money. Didn't keep up, Microsoft (another company that makes money) messed up their purchase and lost money.
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illitrate23
macrumors 6502a
Aydy
macrumors 6502a
Apple are one of the few corporations of this world where people dont mind being fleeced by. I say the same about dyson yet i own both dyson and apple products. The attraction for many is the high cost. The products themselves could be cheap as chips to manufacture but consumers are hooked are not not interested in the glaring gap in manufacture to RRP. If apple were to start selling their iPhones at $300 they become less desirable and their consumers look elsewhere to be fleeced. Theres no getting around this but apple are a high end brand and their product is reliable & functional but by now most users have bought into the brand and not the functionality.
We are predisposed to owning & spending abover our means if everyone else appears to be doing it with ease. Pop culture or keeping up with the jonses, People like expensive things. Not everyone! But the ones that do..Apple has got them.
We are predisposed to owning & spending abover our means if everyone else appears to be doing it with ease. Pop culture or keeping up with the jonses, People like expensive things. Not everyone! But the ones that do..Apple has got them.
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Arran
macrumors 603
[doublepost=1510421491][/doublepost]
Really? could you send me the references to those "reports" you cited?
Really? could you send me the references to those "reports" you cited?
You’re just quoting the cost of goods sold, which gets you the gross margins. Doesn’t take into operating costs like paying employees, keeping the lights on, paying rent. And that just gets you to the net income. Then you need to consider that Apple must meet a certain operating margin set by its board. This way Apple has cash to invest in future capital projects or hand out dividends to its shareholders.
Businesses are complex to operate. Your simplistic view of things tells me you have no idea how the real world works.
Worthless post. "Businesses are complex." What's your point? Tell me more.
I think $370 is the Cost of Sales. Where do you leave the finance, admin, marketing, R&D, distribution costs and while you are at it - also some profits?
Average dealership has been succeeding with the net profit of 2-2.2% for years. Up until the last few years that the average net profit has finally started to climb. So it is very profitable to run a dealership right now with the way the economy is. I used to manage a dealership and this is usually how the number breaks down as simple as possible.
Monthly avg-
60 cars at $40k each=$2.4 millions
Service=$350k
Parts=$275k
F&I=$300k
Used Cars=$150k
After all expenses are paid and if you can hold 2% of the total monthly revenue of $3,475,000 that will get you a net profit of almost $70,000. Very nice if you are a single owner. I have also seen financial reports for many other dealers with revenues of tens and millions a month average holding a 2% profit.
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illitrate23
macrumors 6502a
where's your data? what products do you know of that are sold at absolute cost only? (food going mouldy in the local deli doesn't count)
I never said that companies must sell products at cost. Read the posts carefully before you post, or don't post at all. 😉
Are you for real? The article you linked explicitly states that the $370 do not include R&D, marketing and similar costs. The article goes on to say that these costs are "considerable".
You don't even read your own linked articles, and you accuse other users of not reading properly. Trolling anybody?
I think a few brain cells of mine just committed suicide on reading this thread.
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thadoggfather
macrumors P6
Lol at thread title
Bc I can’t find it anywhere for $370? Only $999?
If you know of a legit retailer that does, lmk
Bc I can’t find it anywhere for $370? Only $999?
If you know of a legit retailer that does, lmk
danilko1
macrumors 65816
We do not pay enough, nor do companies charge enough to cover the true cost of products we make, and their effect on the environment. Mining materials, drilling for fuel, burning that fuel, waste, recycling, etc.
The true cost is enormous and we pay a pittance for what we get. This is why it's said we need 1.5 to 3 Earths to cover the resources we need to live our lives day to day. We exploit the environment without consideration.
Yes we are trying, with much resistance, to find a balance. But we are so far off.
BOM is just one factor in the cost of a product. There's labor, retirement, health coverage, and as I said above, if a company is truly green, bankrolling environmental recovery from BOM acquisition and disposal.
Lookup the YouTube video of the guy who tries to make a toaster from scratch. I mean really as if he landed on a new planet and had to make a toaster from scratching the ground. What we do today, took thousands of years to build up to.
The true cost is enormous and we pay a pittance for what we get. This is why it's said we need 1.5 to 3 Earths to cover the resources we need to live our lives day to day. We exploit the environment without consideration.
Yes we are trying, with much resistance, to find a balance. But we are so far off.
BOM is just one factor in the cost of a product. There's labor, retirement, health coverage, and as I said above, if a company is truly green, bankrolling environmental recovery from BOM acquisition and disposal.
Lookup the YouTube video of the guy who tries to make a toaster from scratch. I mean really as if he landed on a new planet and had to make a toaster from scratching the ground. What we do today, took thousands of years to build up to.
Overhead. 3x markup is pretty standard to give you a final profit of about 15-20% per unit sold
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