I would think that even a 24% markup is going to be cutting things fine. a 24% markup is about 19.35% margin. And that is based purely on a cost price / sell price calculation. It isnt based on a 'cost of sale' calculation, so by the time you have added on your shipping fees and things like operating costs (wages, bills etc) then you are barely breaking even I should think.
The company I work for try, where possible to make 50% margin which is obviously a 100% markup! And we also sell an own brand in many products where they make more like 70% margin!!
It seems to work though, over £1bill turnover last FY and £112mill profit. These numbers, whilst being huge numbers show the extent of the hidden costs as well. On a cost price / sell price calculation we make margins of 50% plus, yet the actual company profit on the bottom line is still 'only' approximately 10%.
Considering all of the above, if like Mattybucks says, the RC trade makes less than 5% on the sale of a new car kit then I am amazed there is still anyone trading at all!
On another point raised above, I am generally happy to pay more to support my local store but when ordering online then I am a lot more price conscious. When I bought both my cars from Moto Arena recently I know that I must have paid at least £100 more (could have been even more) for both cars by the time I had kitted them out. I was happy with this though as to be honest, without Matts help I wouldnt have got the cars running so it was worth paying the extra for the help I got along the way. When I order online then I tend to just take delivery and muddle through myself, in which case the price then becomes the most important factor.
I had often thought that I would like to run my own RC business, I would love to be selling a product that I am passionate about. Having seen some of the eye opening numbers quoted above though then I think I may have to pass up on the idea.....
