Gross profit is meaningless for anything other than internal audits to keep tabs on costs and efficiency. What counts is the EBIT. Before I was let go from my company in a round of "restructuring" (read: the upper management was afraid they wouldn't get their Christmas bonuses to augment their 1/4 mil salaries) I operated my department consistantly at 17-18% EBIT. In a very competitive industy, that is a very difficult accomplishment while still remaining competitive with the little "mom & pop" companies that have virtually no overhead. If you guys think these companies like FMF are making extreme profits, ask yourself why there aren't lots of companies trying to cash in on that "highly pofitable" market.Originally posted by Bailey
Spanky,
I think that most company's would be happy with an EBIT is about 15-18%. To have 18 cents return to your bottom line for every dollar of sales is pretty good. However, I believe their Gross Profit Margin (defined as sales less cost of goods sold) is likely greater than 200% (ie cost of gasket less than $3.00). Therefore, it all depends on your definition of the "cost" of the product to the company.
Ryley
By "good" company, I was talking about being profitable, not moral or ethical. As for Microsoft, they didn't do anything that every other Conglomerate or Corporation hasn't done, they just stood out because there is no real altenative to their product(say what you want, Linux is not a feasible alternative to Windows for most people or businesses). And gross profits has nothing to do with making a good product, it just means you are good at selling your product.:cool:Originally posted by marcusgunby
So spanky are you saying microsoft is a good company or a bad one?all in fun mind:p gross profits doesnt mean good products or business conduct-clever marketing can be all you need.
Originally posted by roostinbe
they've gotten so big/cheap that won't even give one lowly moto-grom a couple of stickers and a catalogue
That $9 for the gasket was the end-user's cost, not the manufacturer's cost. There are at least a couple of mark-ups between the manufacturer and the consumer. And you selling saddles at 400% markup in a small business with little overhead is not the same as a large, high volume corporation.Originally posted by kingriz1
Meaning they are paying close to 9 dollars for a gasket (minus 18-20% according to you)
Originally posted by spanky250
And what part of my statement do you not agree with?
Originally posted by XRpredator
...and everybody, I mean everybody wore JT!
Originally posted by BCR-Bob
Kinda OT but.. Next time you get PO'd about a gasket cost, go to gasketsondemand.com. Looks pretty interesting if you're in the business.
Originally posted by marcusgunby
Jeff KTM gaskets are only expensive in the US-the price has no relationship to costs or profits-its what they think you will stand paying for the extra quality;)
Originally posted by XRpredator
So if they're giving the parts away at cost, how do you propose they make their money?
No doubt shop owners are probably taking it in the shorts, but the manufacturers aren't working for free, and they don't need the practice . . .Originally posted by Sage
. . . If you thing theres so much money in parts try opening your own shop.
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