C2 compressor.
Price from Uk distributor direct:
Uk pound
1950 --------------Au $2895
Us Mercenary price:
US $ 2950 --------Au $2817
Australian distributor direct:
Au $3515
Lets pretend it was manufactured in Australia and work backwards just for the exercise.
Mercenary sells the item for AU$2817.
Lets say Mercenary have a modest markup of 10% which would equal AU$256.10
(Lot's of competition means their margins are much lower)
So if we subtract that we get the wholesale price of AU2560.90.
Now we need to allow for US import duty of 4.9% which equates to AU$119.60
Subtract that and you get AU$2441.30
So this is the Mercenary’s landed cost when it arrives in the US. In reality it would be less than that as there would be Customs clearance charges and transport costs to get it to Mercenary from its point of arrival.
AU$2441.30 landed in the US.
Now to get it to the US, the manufacturer has to use a freight forwarding company and pay shipping costs, so let’s just say that works out to be around $41.30 per unit.
That leaves us with AU$2400 when the product leaves the factory.
If the Australian retailer buys the product for that price we can now work out his markup.
First we’ll remove the 10% GST from the $3515 retail which equals = $319.55
That leaves us with $3195.45 Ex GST
From $3195.45 we subtract $2400 and you get a markup of $795.45
$795.45 equates to a markup of 33%.
Somewhere in the back of my head I remember being told that Australian music retailers work on a 30% markup, so that would sort of make sense.
