reseller profits

So, let me play around with some hypothetical numbers.

Sager reseller R sells a 9262 for $3,000, plus $46 shipping (I'll assume shipping costs are passed through without markup).

That means that, after all is said and done, reseller R has $15 additional in his/her bank account.

In coming up with your net, do you include self-employment tax as an expense deducted in arriving at your net profit percentage?

 

From my point of view everyone's gotta live and if they can deliver everything I want at a lower price compared to the opposition then so be it. I don't really care for the extra bucks they make (as it's normal that people get something out of it, since people have to live).
PS: Donald, get a Porsche .

 

maybe he got a Viper or something else already.

 

Nah im pretty sure I saw an Aston Martin parked at his mansion

 

i could've sworn i saw donald in a bugatti veyron.

 

I see Donald as a kind of guy to be driving an old Dodge... like Al Bundy.

 

LOL at these cars! Who do you think Donald is? He gets chauffeured in a personal limousine. Its not a stretch though as he doens't make that much money.

 

in a pinto?

 

I want to say its a '93 Geo but I'll need some confirmation on that.

 

Correct me if I am wrong but on this side of the pond don't the resellers all buy from Sager (Clevo ships to US then distributed through Sager) then re-sellers build and sell. If this is the case then Sager has the best deal of all (sorry if true to all resellers) distributing ODM's (or OEM's sorry forgot which) and building systems. That would mean they should have the best profit margin based on quantity and being the base from which everyone must go to.

 

Ok, you are starting to go the wrong way...I am just a country boy trying to make a living :GEEK:

 

Sorry, way past my normal bed time and read six pages of posts and forgot this was about re-sellers and not Sager. Just random thoughts bleeding through again, damm hate when the meds wear off.

 

No the resellers send the order over to Sager and then the laptop is built at Sager site and shipped from Sager. The resellers don't even touch the system, unless you purchase a custom paint job from Xotic.

 

Actually, you are correct in that Sager, as the OEM importer, makes the most because they sell the combination of what all resellers sell...and at a good margin.

However to make a minor correction...Sager builds, tests, burns in and thereafter warrants anything with the Sager label on it. Resellers sell and place the order with Sager who then drop ships to the reseller's customer.

Some resellers, like PowerNotebooks.com and Xoticpc, provide additional labor warranties and 24/7 DOMESTIC tech support for some Sager models that are nice bonuses that you don't get with Sager itself, or other Sager resellers.

 

Is that a left-hand drive or a right-hand drive?

 

neither, Donald is suggesting this:



Middle seat!

 

Hey that car looks very similar to the one that has been missing from my garage.. Looks at Nirvana funny !!

 

Well, whaddya think, you had that one lousy little lock on the garage door; took all of about 2 sec to pick!

 

Can anyone guess how many units a reseller needs to sell to break even?

With a net margin of 0.5% seems you'd need to sell about 5,000 machines to get a vaguely worthwhile return. Quite a few considering it's a premium product...

Donald - you say 10% gross margin, but Sager delivers direct? If so, do the resellers even take stock risk (if not, then the 10% is just commission, out of which you need to cover mainly selling/distribution expenses)?

 

There is probably something we are missing, i really doubt what we are calculating is average, the poor resellers would need to sell so much then to break even.

 

Perhaps it works like cars sales where there are rebates/money given to the reseller for each unit sold so even if a sale is barely over cost the reseller still receives a check.

 

None of you can drive this though :

 

Please don't confuse margin with net profit. Also please not I said the margins are LESS THAN 10%, generally in the 5-8% range.

Yes, Sager drop ships to our customers, but we have to cover rent, payroll, advertising, 24/7 DOMESTIC Support, 2nd and 3rd year labor warranty, website costs, phone costs, utilities, insurance, taxes and the beat goes on!

 

Boy, wouldn't that be a dream come true. Sorry, no rebates in this business.

 

Car sales...that's a totally different business. There was a document about the price BMW asks for an M5 and the price people actually pay. There was about 10k $ (without the profit they make on every option you pay) profit for the car dealer.

 

That your new avatar, eleron911?

 

Thinking about it. Gotta slap a 911 sticker on it and it`s good to go, I mean fly

 

It's all about the badge.

 

This topic really stretches confidentiality and I regretfully have probably disclosed more than was necessary.

I am through answering any questions related to the industry's profitability, or our own.

 

It seems to me that, if you really want to get a view from the inside of the computer reseller industry, then perhaps you should be subscribing to Computer Reseller News, no? Or joining the Association of Service and Computer Dealers International.

 

What difference does it make? it`s their job, let the people live their lives.
Just because they're the medium to getting your laptop,does not make them Bill Gates.