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Does anyone have experience with Radio Shack and Brightstar?

My product: AmbyGear smartwatch.

What is has (Tech): 3G + GPS + all the smartwatch stuff.

Problem:
Distributor is asking for very high margin:

a.Margin to Radio Shack - they are looking for between 45 - 50 %

b.Margin to Brightstar -Brightstar is looking for 15%


This seems crazy high for margin (for markup would be more reasonable but still on the high side).

Amazon fulfilment and sales and referral and all fees and cost came to less than 21% margin.


Does anyone have some data?

2 Replies

Karl Schulmeisters
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Karl Schulmeisters Entrepreneur
CTO ClearRoadmap

IIRC BrightStar is a distributor. 15% for distribution is pretty reasonable since wholesaler markups avg 20% according to this source http://www.tom-gray.com/2012/04/26/pricing-to-distributors-what-is-reasonable-markup/

Rule of thumb in retail electronics is 1.5-3x markup. So if RS is asking for 50% markup - that's 2x over what you generate. Right in the middle of that range. http://ceklog.kindel.com/2012/08/30/retail-pricing-markup-and-margins/

Amazon isn't going to carry much inventory - you will bear the cost of Amazon's inventory. RS is going to bearnot only the cost of inventory but the risk of displacing other profitableproducts.



Patrick Muggler
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Patrick Muggler Entrepreneur
CEO & co-founder at Ambit Networks Inc
Thanks for the input Karl.
I looked at your recommendations. Those are fairly generic and the problem is that the range today is fairly wide for different types of products. TOm's page is known to be on the higher end of the range...
Have you sold consumer electronics to retailers before? What is your experience
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