Where is the limit of what is reasonable and understandable regarding material pricing? This actually affects many trades.
Example:
Cosmo heating expansion tank: online price including shipping, warranty, etc., €50, charged with tax €171.
Wilo heating pump: €160 compared to €352.
No, I do not expect the contractor to spend hours researching and comparing prices. They will buy from their wholesaler and, with a high degree of certainty due to discounts, get the components even cheaper. Of course, they may have personnel and travel costs to collect the parts.
Instead of €210, I now pay €523.
Also, odd items like small parts and installation aids are puzzling, since gaskets were of course included with the components and only a few centimeters of sealing tape were actually used.
As a customer, I have no chance in advance to find out the final prices at all.
Recently, there was a TV report about the installation of heat pumps in houses in France, which due to local pricing were barely more than half the cost. This with identical components.
It gives cause for serious reflection.
It probably leads to more and more private procurement and then installation done under the table.
Ultimately, tenants are also affected, because if the owner’s maintenance costs get out of control, the only option left is a rent increase.
Example:
Cosmo heating expansion tank: online price including shipping, warranty, etc., €50, charged with tax €171.
Wilo heating pump: €160 compared to €352.
No, I do not expect the contractor to spend hours researching and comparing prices. They will buy from their wholesaler and, with a high degree of certainty due to discounts, get the components even cheaper. Of course, they may have personnel and travel costs to collect the parts.
Instead of €210, I now pay €523.
Also, odd items like small parts and installation aids are puzzling, since gaskets were of course included with the components and only a few centimeters of sealing tape were actually used.
As a customer, I have no chance in advance to find out the final prices at all.
Recently, there was a TV report about the installation of heat pumps in houses in France, which due to local pricing were barely more than half the cost. This with identical components.
It gives cause for serious reflection.
It probably leads to more and more private procurement and then installation done under the table.
Ultimately, tenants are also affected, because if the owner’s maintenance costs get out of control, the only option left is a rent increase.
N
nordanney23 Oct 2024 10:02Buchsbaum066 schrieb:
Keep dreaming. No one gets up early anymore for a 3 percent margin in wholesale.Not a dream. You need to face reality. You can find the figures everywhere – whether in statistics portals, industry news, or wherever. And if you’re really interested, you can even verify this from the numbers in annual reports.
I just looked at Metro’s numbers for Q3: 0.92% profit margin (3.5% adjusted for special effects). Any more questions?
For this, even 12,500 employees get up every day, and the shareholders are happy.
The problem is that you are talking about different key figures.
@nordanney refers to profit margin, which is at least the contribution margin 1 (CM1), but most likely the EBITDA margin or even EBIT margin of the company. In other words, what appears at the bottom of the income statement.
@Buchsbaum066 talks about margin, possibly meaning gross margin, but actually calculates the markup or price increase of the individual product.
From my experience regarding gross margins, I can only speak about consumer electronics. Big retail chains usually expect a gross margin of 30–35% from the manufacturer or distributor. For example, if a product costs the customer 119 EUR at checkout, that corresponds to 100 EUR net. Then, for instance, MM pays the manufacturer/distributor 65 EUR.
(53% markup according to Buchsbaum’s calculation).
There are also side agreements, such as advertising subsidies, top shelf placement fees, display stands, backend discounts that take effect after a certain minimum sales volume, and so on.
In the end, MM-Saturn’s EBIT is 1.1%.
@nordanney refers to profit margin, which is at least the contribution margin 1 (CM1), but most likely the EBITDA margin or even EBIT margin of the company. In other words, what appears at the bottom of the income statement.
@Buchsbaum066 talks about margin, possibly meaning gross margin, but actually calculates the markup or price increase of the individual product.
From my experience regarding gross margins, I can only speak about consumer electronics. Big retail chains usually expect a gross margin of 30–35% from the manufacturer or distributor. For example, if a product costs the customer 119 EUR at checkout, that corresponds to 100 EUR net. Then, for instance, MM pays the manufacturer/distributor 65 EUR.
(53% markup according to Buchsbaum’s calculation).
There are also side agreements, such as advertising subsidies, top shelf placement fees, display stands, backend discounts that take effect after a certain minimum sales volume, and so on.
In the end, MM-Saturn’s EBIT is 1.1%.
N
nordanney23 Oct 2024 12:07Tolentino schrieb:
@nordanney is talking about profit margin, which is at least the gross margin, but most likely the EBITDA margin or even the EBIT margin of the company. So basically what is shown at the very bottom of the income statement. Yep. The only margin that truly matters for a company in the end.
Tolentino schrieb:
@Buchsbaum066 is talking about ... the markup of an individual product. That is irrelevant in this context, as the markup always has to be set so that the company makes a profit at the end of the day.
Tolentino schrieb:
From my practical experience regarding trade margins, I can only speak about consumer electronics. Major retail chains usually expect a trade margin of 30-35% from the manufacturer or distributor. ... to make any money at all in the end. But private customers or tradespeople cannot buy directly from the manufacturer. They go to wholesalers like Saturn/MM or Metro or wherever. And then they can compare prices between the “wholesaler” and the tradesperson.
B
Buchsbaum06623 Oct 2024 14:33You should definitely specify that you are referring to the profit margin on sales. And that is always relative.
With a revenue of 30.55 billion and a profit margin on sales of 0.92%, or net profit margin as you call it, there is still a solid annual profit of over 300 million left. However, this has nothing to do with the pricing strategy of wholesalers for tradespeople.
With a revenue of 30.55 billion and a profit margin on sales of 0.92%, or net profit margin as you call it, there is still a solid annual profit of over 300 million left. However, this has nothing to do with the pricing strategy of wholesalers for tradespeople.