Average Profit Margins

[PhotoBitz]

New to the business and had a simple question.

What's the average profit margin that I should be expecting when selling my goods? I realize that this all depends on several variables, but wanted to just get a general sense of whether or not I'm working with a scammer, middleman or wholesaler.

i.e. I purchase a widget from company A for $78 and sell for $86. Roughly a 10% profit margin, but I'm concerned it may not be worth the investment considering shipping charges. Would this company fall into the middleman category?

[frostbitetwice]

Originally Posted by PhotoBitz

New to the business and had a simple question.

What's the average profit margin that I should be expecting when selling my goods?

Rather simple, Photo....If there are many companies selling the same items, you will have smaller margins...The opposite is true...

Some examples, your local filling station which may have 10% margin on petrol, super markets in general 25%, with their specialty departments marking up even higher, meats, bakery and vegetables ets...

On the overhand, company such as Microgates has margins exceeding 75%...

Costco, has a general mark up of 10%...

Margins are one thing, profits are another...You can have the same margins as one of your competitors, but be more profitable because you are more efficient and have lower costs...

Please remember, most business unless it is a home base business, will typically lose more during their initial start up phase...

[PhotoBitz]

Yeah, I'm trying to find a good wholesaler, but it's sometimes hard to even determine if they're a wholesaler considering how much I'm spending relative to making.

Goods will mainly be sold on Amazon.com so after shipping expenses from Hong Kong, shipping expenses to the customer and Amazon commissions, I may barely walk away with the change in my pockets. The company offers drop ship services, but as I'm new to this, I prefer to have a friend purchase/pickup locally and mail to me.

Sounds like I need to find a supplier who's a little more competitive in pricing.

[ams30gts]

My store has been up for maybe 4 months now. We are always between 18-25%. We sometimes have sales and offer free shipping on orders over $149. Since we couldn't get an accurate UPS or USPS real-time rate, we went to a table rate which works pretty good for us.

We use 2-3 different drop shippers which cuts into profits a lot of the time.

[dal5560]

In this economy, it is great getting 10%.

The less competition the more the margins. The biggest problem in the equation is the middleman. Go directly to the manufacturer. Then, the only thing you have to worry about is the charge for shipping.

[PhotoBitz]

Are manufacturers keen on giving out the distributor's info? I've found a lot of deadends when asking because I'm barely starting off, which is understandable.

[dal5560]

Originally Posted by PhotoBitz

Are manufacturers keen on giving out the distributor's info? I've found a lot of deadends when asking because I'm barely starting off, which is understandable.

Depends on the manufacturer. If you are looking in the US, you are most likely to be directed to a distributor. However, in China, most of the time, you will find a different approach.

If your order amount is low, you may have some difficulties. Always depends on a manufacturer so keep on searching. Good luck.