Apple are excellent at marketing and are a money machine, 6/7 years ago I worked for PC World Business, at that time it was the business to business arm of the Dixons group and I worked there for just over 15 years. It was a strange sort of set up in that while I worked from a PC World store, PC World Business was actually part of another company also owned by Dixons called Equanet. Equanet traded completely separate from PC World as a reseller rather than a retailer so many things were different including that they had their own buying department, warehouse, terms and conditions etc. Because of this and because I was based in-store I could sell equipment both direct from Equanet and from the store. I suspect it was some sort of tax avoidance scheme.
I had visibility of profit margins for goods sold from the Equanet warehouse but not from retail. Apple desktops and laptops averaged just over 20% margin when sold vis the Equanet warehouse. I had no visibility of what the margin was for retail but we were told that the profit margin when sold retail even if sold at the same price as at Equanet was higher. Retail margins were higher because they bought many more units. At that time, they were 10% cheaper if sold from Equanet rather than form retail. But even at the Equanet margin at an average of 20% Apple was a large profit driver. For windows hardware say Dell, Sony etc the average profit margin for windows desktops and laptops was 4%.
So just as an example take the standard Macbook Pro, back then they cost £999 retail and via Equanet £900 inc vat. So, every macbook pro I sold from Equanet made £180 of margin. If I sold an equivalent spec Dell, Toshiba, H.P laptop they cost less usually around £749 inc vat and this would then make £28 of profit. This means that every Macbook Pro sold retail made a minimum of £280 profit, because the retail proce was £100 more. The retail margins were higher so it would have been more than that. Add to that Apple targeted both Equanet and Dixons for units sold, accessories sold, Apple care etc. If they met the target there was large bonuses paid directly to the company. Apple were making so much money from Dixons a few years before I left that they actually employed someone full time in each store to run demonstrations of products. This wasn’t like a normal rep that would cover multiple stores the Apple rep was permanently based in one store. They were well paid too, much better wages than the normal sales person wages paid by Dixons and slightly more than an assistant manager was paid. The Apple rep also received very good bonuses when in store targets were met.
Things are probably much different now 6/7 years is a long time in those sorts of businesses Equanet was sold by Dixons to another company, I assume because whatever tax loophole they were using has now been closed. PC World Business is still running but is now incorporated into the normal PC World.
So, in short for every Macbook Pro Dixons sold retail at that time was making them £280 minimum and giving them a £1000 sale. The equivalent windows-based laptop was giving Dixons a £750 sale and £28 worth of profit. Then think about what Apple are making themselves they are far and away the most profitable hardware manufacturer and I read sometime ago on laptops and desktops they average around 30% margin, before they sell into retail. This means that the actual value of a £1000 Macbook Pro at that time would have been about £428 ex vat. So think about how much money that means Apple are making when they sell direct rather than through a retailer or reseller.
Every time you buy an Apple desktop or laptop you are being totally ripped off at an obscene level.
Bluebells 2020
Bluebells 2020
