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Thread: Local Brands Pricing

  1. #21
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    Quote Originally Posted by Andre View Post
    If you were a tackle retailer selling Explorer, what do you think a realistic profit margin per rod should be?
    Very Tough question, but you seem to be cost minded so you would know as well as me that your profit margin would need to cover both variable and fixed cost factors before your margins can even be considered that allows you to make a profit(Hopefully) and stay competitive ito pricing, and as I dont have all the cards in front of me, I would not even know where to start.
    "I wasn't born a fisherman, but I will damn well die a fisherman" - Anon.

  2. #22
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    Ok, assuming you are a web based retailer who draws stock per order from the supplier, as you said..., and don't carry stock, low overheads, no rent, minimal web charges etc..... Your own business model as you described earlier... what percentage profit would you think is reasonable to realise per rod sold. In other words, if Explorer charges you R1000 for a rod, what would you think is a reasonable price to charge your customer?
    Quote Originally Posted by Uli@84 View Post
    Very Tough question, but you seem to be cost minded so you would know as well as me that your profit margin would need to cover both variable and fixed cost factors before your margins can even be considered that allows you to make a profit(Hopefully) and stay competitive ito pricing, and as I dont have all the cards in front of me, I would not even know where to start.
    Disclaimer.... none of my posts are intended to be "expert advice"..just opinions from someone who is willing to help where he can.

  3. #23
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    Sjoe, feel like Im debating with my Audit Managers again

    Your creating a perfect and closed situation, so based on your situation I would be able to charge anything above R1000 to the extent that the market would accept, based on demand. Considering all factors, you could possible easily ask R2000 for a 100% mark-up which would be an acceptable price for most of the public I believe for a very good rod. But thats my problem that I tried to address in the beginning of the thread, when the T50 entered the Market, what was the going price at that time in comparison to what the rod is going for currently?

    Anycase, sorry for diving into cost talks, know this is a Fishing website
    "I wasn't born a fisherman, but I will damn well die a fisherman" - Anon.

  4. #24
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    Thanks for all the feedback guys.

    Cheers
    "I wasn't born a fisherman, but I will damn well die a fisherman" - Anon.

  5. #25
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    You probably wondering why I ask all these questions. I am currently a bout 3 months into a business plan, involving this type of thing, although not purely fly fishing related, abut a web based entity providing outdoor stuff that comes from the East, USA and Australia, so it was of interest to me to try and find out what the market would say are acceptable margins in this regard. The business plan is already showing that even with low overheads, bulk buying discounts and minimal web running costs, a margin of 50% (100% mark up on cost) might be cutting it extremely fine, and might not be enough. It only really starts making sense at volumes that I believe are going to be difficult to achieve without expensive website optimisation, and that also takes into account website hits on the overseas site from SA that will be redirected to me. ONce you do the exercise, its quite astonishing how expensive these types of businesses can be.
    Quote Originally Posted by Uli@84 View Post
    Sjoe, feel like Im debating with my Audit Managers again

    Your creating a perfect and closed situation, so based on your situation I would be able to charge anything above R1000 to the extent that the market would accept, based on demand. Considering all factors, you could possible easily ask R2000 for a 100% mark-up which would be an acceptable price for most of the public I believe for a very good rod. But thats my problem that I tried to address in the beginning of the thread, when the T50 entered the Market, what was the going price at that time in comparison to what the rod is going for currently?

    Anycase, sorry for diving into cost talks, know this is a Fishing website
    Disclaimer.... none of my posts are intended to be "expert advice"..just opinions from someone who is willing to help where he can.

  6. #26
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    Hope everything works out, considering the nature of this industry in South Africa, would not want to have to make those plans

    All the best
    "I wasn't born a fisherman, but I will damn well die a fisherman" - Anon.

  7. #27
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    Ya thanks, but that's why a business plan is a "must do" before any venture can be started. A good business plan will highlight the risks and rewards, and once done, assist in critical decision making. Best to put maximum effort into the plan before investing money. So far the marketing and logistics plan is complete, The financial plan goes hand in hand with the pricing strategy, and are done last, because everything else influences these elements of the plan. No point in having a great financial plan, only to find out that it is unable to support the rest of the business. Anyway, its worth a good hard look, but the amount of cash flow needed to run an effective internet trading business is actually quite horrifying, and its not a whole lot less than carrying a store, in fact there are elements that can cost more.
    Quote Originally Posted by Uli@84 View Post
    Hope everything works out, considering the nature of this industry in South Africa, would not want to have to make those plans

    All the best
    Disclaimer.... none of my posts are intended to be "expert advice"..just opinions from someone who is willing to help where he can.

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