[rethcork]

So I just recieved and participated in a RIM market research that I found interesting. It was focused on the Playbook and amongst the questions one caught my eye.

What would you pay for a 16GB Playbook?

I think RIM knows it will be under $500 but have no idea what they will charge yet, so in my humble opinion I told them aim for the low $400's like a price point of $429.

Anyone else get this email and what did you tell them?

[howarmat]

no way its under 400, that is not enough profit margin

[rethcork]

So what do you think it will cost them to make one. It can't cost them more then $250 to make one. So at 30% mark-up that's $325. Add up the other costs like marketing and distribution and make some room for retailers to make a few � and under $400 is somewhat realistic...

Thoughts?

no way its under 400, that is not enough profit margin

[edaniel1717]

Under $400 -- i would be willing to buy this at release date--- and hope that it performs as advertised...

$500 + ---- ill wait to hear reviews, no rush....asking myself-- do i really need this or not....

[_StephenBB81]

So what do you think it will cost them to make one. It can't cost them more then $250 to make one. So at 30% mark-up that's $325. Add up the other costs like marketing and distribution and make some room for retailers to make a few � and under $400 is somewhat realistic...

Thoughts?

you got a good start,

BUT lets take it to the real world

we'll say
it costs RIM $250 FOB cost.
RIM needs to sell it to the Carriers @ 30% Mark up for skid quantities,
that is $325
RIM is selling this to we'll say Best Buy as an example.
Best Buy Corporate Distribution Purchases the Playbook for $325
They Then must fund the Supply chain, so they will tack for EASE of math 10% at Distribution before it goes to retail, so now the Retail outlet is running at $358, the Retail outlet needs to get 30% minimum that Brings us to a Cost retail cost of
$465

and that is with minimal distribution channels, and acceptable margins, but far from good margins. 50% markup is an acceptable Margin in the retail space usually

[howarmat]

damn DeRusett, i was looking for your other post where you broke the cost analysis down.

[rethcork]

deRusett, thank you for the insight your correct that I might have been to optimistic with my cost analysis but I do have a question.

What retailer runs their business with a 50% markup. I work in for a west coast retailer in Canada and let me say 50% is a long shot from what we get but we have been extremely successful. Also I co-own a small business that sells office supplies and 20%-25% is very realistic for us.

So can you provide some evidence showing retailers are going to get 30% markup, as most manufactures now like Apple are lucking to give the retailers 10%.

At least that's what I see

Thanks for the great feedback and information, you are one of the forums most informed posters.

you got a good start,

BUT lets take it to the real world

we'll say
it costs RIM $250 FOB cost.
RIM needs to sell it to the Carriers @ 30% Mark up for skid quantities,
that is $325
RIM is selling this to we'll say Best Buy as an example.
Best Buy Corporate Distribution Purchases the Playbook for $325
They Then must fund the Supply chain, so they will tack for EASE of math 10% at Distribution before it goes to retail, so now the Retail outlet is running at $358, the Retail outlet needs to get 30% minimum that Brings us to a Cost retail cost of
$465

and that is with minimal distribution channels, and acceptable margins, but far from good margins. 50% markup is an acceptable Margin in the retail space usually

[_StephenBB81]

deRusett, thank you for the insight your correct that I might have been to optimistic with my cost analysis but I do have a question.

What retailer runs their business with a 50% markup. I work in for a west coast retailer in Canada and let me say 50% is a long shot from what we get but we have been extremely successful. Also I co-own a small business that sells office supplies and 20%-25% is very realistic for us.

So can you provide some evidence showing retailers are going to get 30% markup, as most manufactures now like Apple are lucking to give the retailers 10%.

At least that's what I see

Thanks for the great feedback and information, you are one of the forums most informed posters.

What Products do you sell?
and what is your Turns per year on those products?

I'm a manufacturer, not in consumer electronics mind you, but I know that the Business to Business sales market sits in the 20-30% Margin ( Margin = Gross Profit / revenue )
you can't maintain a business with much less than that due to overhead costs, costs of borrowing, freight and planned losses.

Your Apple Markup of 10% is very flawed, unless you have a rebate plan for returns? who are you buying from?


a Customer of mine every year puts on a seminar for Snow removal company's and landscaper company's in the Snow removal business, 72% of people who go full time in business for them selves are bankrupt in 5 years due to poor pricing structures.
A MAJOR problem is pricing for today, and not pricing for growth, not pricing so you can afford to hire someone as you grow. and not pricing for contingencies like needing to rent out additional wearhouse/office space due to unforeseen growth or supply problems ( flood/road closer/fire)

[howarmat]

apple sells the ipad for roughly 50% markup also. the ipad costs like $280 to make i think

[_StephenBB81]

apple sells the ipad for roughly 50% markup also. the ipad costs like $280 to make i think

Apple and RIM are 2 companys that are very much Margin focused both run very high Margins for themselves giving them nice cash flow.

And RIM not being the media sweetheart of Apple, must also pass nice margins through the distribution chain to remain as popular and prevalent as they have.

Apple theoretically can give lower Margins to the dealer network because they do cover the bulk of the product advertising and do it very well, you just need to tell people you have apple Products, and people buy them.

[flyersfan76]

apple sells the ipad for roughly 50% markup also. the ipad costs like $280 to make i think

And people complain about gasoline prices when those margins are around 10%

[_StephenBB81]

And people complain about gasoline prices when those margins are around 10%

OH! I love hearing people complain about fuel costs.

I spend more Per L for Coffee, Juice, Ketchup, Beer.

Many people spend more per L for Bottled water than they do for fuel.

[Jean-luc_Picard]

apple sells the ipad for roughly 50% markup also. the ipad costs like $280 to make i think

I really doubt that, it's about $6.50 to make an iPhone 4, so I doubt it's anywhere near that much to make an iPad. Apple has the highest margins in the industry, including all costs for R&D, and even keeping the offices running, they're still getting 70% profit margins...

[anon(728548)]

I really doubt that, it's about $6.50 to make an iPhone 4, so I doubt it's anywhere near that much to make an iPad. Apple has the highest margins in the industry, including all costs for R&D, and even keeping the offices running, they're still getting 70% profit margins...

whaaaaaaaaaaaaaaaaaaaaaaaa????

[bpgui]

I really doubt that, it's about $6.50 to make an iPhone 4.

Where did you see that number? I've never looked into it, but that seems incredibly low to me.

[_StephenBB81]

I really doubt that, it's about $6.50 to make an iPhone 4, so I doubt it's anywhere near that much to make an iPad. Apple has the highest margins in the industry, including all costs for R&D, and even keeping the offices running, they're still getting 70% profit margins...

What??
Apples Q4 Net profit margin was 22.45%

Where did you see that number? I've never looked into it, but that seems incredibly low to me.

same place he came out with 70% profit margin

[BlackStormRising]

I really doubt that, it's about $6.50 to make an iPhone 4, so I doubt it's anywhere near that much to make an iPad.

The $6.50 figure is a relevant number. That would be close to the day's wages (12 hr work day) for the average Foxconn city worker. 450,000 employees in 15 factories on a 3 sq km campus. And I believe that factors in the recent 30% pay increase near the end of last year.

[sandmanfvr]

$499 is fine. Competes with the ipad and not to high.

[anon(728548)]

i'd like them to do $479 for a week at launch

[sandmanfvr]

I bet bestbuy will add in a case or something, then that would sweet.

[anon(728548)]

I bet bestbuy will add in a case or something, then that would sweet.

just a silicone one would make me happy!

[lockedtight]

I'm guessing they were doing the research to see what people were hoping to pay for it. But the price is probably more set in stone because of price margins and goals.

Posted from my CrackBerry at wapforums.crackberry.com

[daedone]

...it's about $6.50 to make an iPhone 4

Yea... um, you're off by a factor of 30. From iSuppli CDMA $173.51 / GSM $187.51.

And the iPad is $219