How a computershop works.

tagliatelle

_____________________
fictive simplified example:
3 persons for 750 eur/month
3 persons taxes for 250 eur/month
computersales
1 computer = 1500 eur (source Packard Bell)
for shop 1 computer = 750 eur
conclusion: shop must sell 1 computer/week
 
Are you saying the shop makes 50% on sale price? I find that hard to believe, but I know a lot of computer shops that seem to sell less than a computer a week and are still doing well, so the margin must be sizeable.
Anyone got any REAL figures?
 
herve, you forgot the price of renting the shop, electricity, advertising and so on ...
still, there must be good money to be made running a computer store, otherewise noone would do it, would they? :D
 
Herves margin numbers are about right - I used to be an auditor (not Andersens before you ask, another big 5) and so I used to look at Gross Margins all day long.

Here are some figures that I have briefly put together based upon the UK:

Single Owner shop, wants to gross £40k a year.

Ougoings (all figures per annum)
=======

1. Employee costs: £40k, plus other taxes = £48,000 total cost to business.
2. Rent of Shop - say £12k
3. Rates (local taxes): £500
4. other bills: £500
5. Other costs (stationery, advertising, accountants, etc.): £4k

Total Fixed Outgoings: £65k.

If each computer retails at £1500, then that means the revenue to the business is (£1500 / 1.175) = £1275 because it is necessary to charge VAT on the goods (he is making enough revenue to demand that one). Assuming a gross margin of 50% then the contribution (profit) associated with each computer is (£1275 / 2) = £638.

This means that the shop must sell (£65,000 / £638) = 101 computers a year. That is two a week, which I don't think is unreasonable. A couple of large deals to local offices would set the owner up nicely for the year.

You can plug in your own numbers if you don't agree with them - but these are quite close for the UK, though there will be startup costs involved and maybe some other small costs.

Roger.
 
Back
Top