Quote:
Originally Posted by mgmueller
18%?
That's "nothing".
I've mentioned it before, but to repeat it here:
Most corporates have ASG (Administration, Sales, General) costs in the excess of 20%. 15% are considered benchmark, I know a few companies with >30%.
Meaning:
Their Gross Margin is 18%.
But that's not their EBIT.
With 18% Gross Margin, they can consider themselves happy, if even a few percent should be left.
It's well known, that Amazon still doesn't generate much of a profit.
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Okay, let's break it down:
- $73.94 comes in
- $61.11 goes out
- $12.83 is left and has to cover:
- credit card fee ~2--2.5% --- at most $1.85, so they have
$10.98 (or more) of potential profit which merely has to cover the expense of running a transaction on a server and sending some e-mail and storing some data and serving up some web pages (trivial cost of operation folded into the balance of their budget), maybe a banking fee on the $61.11, &c.
The merchantplace sales should be pretty much pure profit for Amazon for those sellers which don't pose problems (and even those expenses are minimal --- e-mail from a customer sales representative and maybe some chargebacks --- the onus is on the marketplace seller), so thus far, the only people making money on my book are:
- the printer (I don't mind, they worked hard)
- Amazon (annoying, and I wish there was an on-line service w/ better terms)
- the Abebooks reseller who has thus far convinced 3 people to pay his inflated prices when my copy was available for list price