Profit margins

[Chess]

Interesting little slipup by Diane Peternel this morning - they're flogging a set of three MCS CD's for £9.99 so Howard was doing his usual wittering and said "Who pays £3.33 for one CD with a graphics program?" To which Ms Peternel said they did - that was the cost price!!!!!!!! Great profit margins, eh?!?!?

 

[Rentochops]

I just saw that Chess, no wonder they are flogging them off so cheaply atm with free P&P, this really is a money spinner for Stephanie!

 

[Chess]

Ms Peternel has just announced that they've sold a million and a half of these CD's. Now there's a profit!! (Never mind the issue of how many of these were the ones that so many people found badly flawed.)

 

[cmazza]

I bought the birthday box for £39.99, but I used my £10 off voucher against it. I can't believe they were selling it for £99 - that is a HUGE profit margin as there is f all on the cd's.

 

[Fluffwump]

Ah but that doesn't mean that there's that much profit on each CD , there are many other costs, if they sell at £12.99 (and many are cheaper than that) £1.93 immediately goes to the government in VAT (even more in January), if you pay by credit card another (up to) 52p goes to the credit card company. So that leaves £7.21, that's before Ideal world have taken their cut, which I guess is pretty big, you've paid your staff , possibly outsourced the programming,rental on your premises, rates on your premises, Accountants fees, Legal fees, bank charges, the list goes on....
I only point this out because I am in business and people forget just how many hidden costs there are in producing a product or service..... probably the same reason why many people start up in business and don't even make it to the end of the first year. So before you think that Stephanie is laughing all the way to the bank, consider whether you would have been happy to risk your hard earned setting up such a business in the first place, after all she couldn't guarantee it would have been a success and could have lost a packet!
By the way I don't know Stephanie or have any affiliation with ideal world, I just felt it needed pointing out.
My business is hairdressing, and someone once said to me that the prices were ridiculous for a cut and blow dry as shampoo didn't cost that much, and she was deadly serious!

 

[henrietta]

Ah but that doesn't mean that there's that much profit on each CD , there are many other costs, if they sell at £12.99 (and many are cheaper than that) £1.93 immediately goes to the government in VAT (even more in January), if you pay by credit card another (up to) 52p goes to the credit card company. So that leaves £7.21, that's before Ideal world have taken their cut, which I guess is pretty big, you've paid your staff , possibly outsourced the programming,rental on your premises, rates on your premises, Accountants fees, Legal fees, bank charges, the list goes on....
I only point this out because I am in business and people forget just how many hidden costs there are in producing a product or service..... probably the same reason why many people start up in business and don't even make it to the end of the first year. So before you think that Stephanie is laughing all the way to the bank, consider whether you would have been happy to risk your hard earned setting up such a business in the first place, after all she couldn't guarantee it would have been a success and could have lost a packet!
By the way I don't know Stephanie or have any affiliation with ideal world, I just felt it needed pointing out.
My business is hairdressing, and someone once said to me that the prices were ridiculous for a cut and blow dry as shampoo didn't cost that much, and she was deadly serious!

Bravo, Fluffy, and here! here!!