Generally speaking, I would guess at least 1:5 from manufacturer to MSRP. Dealer cost would be about 40% less than MSRP. Keep in mind that there are spiffs and other incentives/accomodations (free shipping, bulk purchase, etc.) that manufacturers offer to their dealers. So even though a dealer may show you their price list it isn't always what they pay for it. Cables are another story.
Ultrakaz (Threads | Answers | This Thread)
I had read before that there is a standard business formula. 20% for manufacturing, 20% for R&D, 20% for sales and marketing, and 40% for the dealer's costs. I think this formula extends beyond audio, pretty much common practice.
Jmcgrogan2 (Reviews | Threads | Answers | This Thread)
Yes depending on the mfg, the dealer mark up is 40-50%.
Bigkidz (Reviews | Threads | Answers | This Thread)
Speakers are 40-50%
Electronics are 28-40%
Televisions can be as low as 5%
I've seen vcr's with 3-5%
I do a little work with a couple of local High End shops. I'm always asking what the dealer cost is on things. Just because they tell me the cost doesn't mean I get to purchase it at cost. I get the standard 5-10% discount like everybody else.
BTW - they sell tv's and vcr's just as a convience and then they can charge you for the install. Sony has some of the thinest margins in the industry.
Prpixel (Threads | Answers | This Thread)
The rough "rule of thumb" for the ratio between manufacturing costs vs. retail price usually falls in the 1:5 or 1:6 range. This, however, is normally based on manufacturing enough of the product to reach so-called "economies of scale". This, however, does not always apply to low volume speciality products, such as high-end audio gear. The manufacturing cost to retail price ratio for these sort of "luxury" goods may be in the 1:10 to 1:15 range. And then there are the markup ratios that make no rational sense at all, such as diamonds and high-end audio cables....
Sdcampbell (System | Reviews | Threads | Answers | This Thread)
Usually the retail price of an item is determined by the ratio of 5 times what it cost for parts. This usually covers the cost of operation including labor and whatever else like advertising. In general manufacturers give the dealer 40% off and some give 50%. Most allow the employee to purchase at cost and some manufacturers give accomodations to employees and other manufacturers that range from 40 to 50% off. Dealers will sometimes get additional costs cuts for demo gear.
Rwwear (Threads | Answers | This Thread)