Watchfinder - ridiculously low PX value
Discussion
V8OW said:
£10k net profit
I don't see what your point is though. Buying stock doesn't affect profit. The cost of what you sell affects profit.
It was in relation to the following....I don't see what your point is though. Buying stock doesn't affect profit. The cost of what you sell affects profit.
Porsche911R said:
Plus 3000 watches in stock with goodness knows what value.
ATM they are spending all the profit on stock to avoid tax.
A shown low profit means nothing here. !
I said "Of course stock effects your profit"ATM they are spending all the profit on stock to avoid tax.
A shown low profit means nothing here. !
V8OW said:
Might affect your cash, but won't affect your profit (until you sell the stock).
I agree, that the following year it may effect your profit in a much bigger way, you may well be left with £10k worth of the highest mark up stock that you manage to sell, or it may be £10k worth of stock worth £500. But you stock inventory, calculated at cost, is how you work out your company profit, and to say it won't is simply in wrong.
gizlaroc said:
I agree, that the following year it may effect your profit in a much bigger way, you may well be left with £10k worth of the highest mark up stock that you manage to sell, or it may be £10k worth of stock worth £500.
But you stock inventory, calculated at cost, is how you work out your company profit, and to say it won't is simply in wrong.
You can't (or shouldn't) have £10k of stock that's only worth £500 but that's beside the point. But you stock inventory, calculated at cost, is how you work out your company profit, and to say it won't is simply in wrong.
Still not entirely sure what the argument is, but I think we'll agree to disagree.
Selling high margin products obviously affects profit, but buying stock won't affect profit (until you sell it). Your original post was in response to someone questioning the poster you've quoted above, that suggested the company in question were buying stock in order to reduce their profit, which is incorrect.
V8OW said:
Selling high margin products obviously affects profit, but buying stock won't affect profit (until you sell it). Your original post was in response to someone questioning the poster you've quoted above, that suggested the company in question were buying stock in order to reduce their profit, which is incorrect.
Agreed. Stock has no effect on profit until you sell it. But you can't spend all your profits on new stock just before the end of the tax year to try and reduce profits.
What I was trying to get at was this, and probably makes it easier to think about it if you are only running the company for one year, you have to value all your remaining at stock at cost (or an acceptable write down value) at the end of the year when you submit your accounts along with all other costs to determine what your taxable profits are.
" Business Profits Toolkit
2014-15 Self Assessment and Company Tax Returns
Stock and work in progress
All stock must be identified and included in the accounts at the correct value. If stock is overlooked or incorrectly valued this can result in the incorrect level of profits or losses being included on tax returns."
https://www.gov.uk/government/uploads/system/uploa...
I am talking from the point of view of doing company returns, not as a sole trader which may well be different.
What I was trying to get at was this, and probably makes it easier to think about it if you are only running the company for one year, you have to value all your remaining at stock at cost (or an acceptable write down value) at the end of the year when you submit your accounts along with all other costs to determine what your taxable profits are.
" Business Profits Toolkit
2014-15 Self Assessment and Company Tax Returns
Stock and work in progress
All stock must be identified and included in the accounts at the correct value. If stock is overlooked or incorrectly valued this can result in the incorrect level of profits or losses being included on tax returns."
https://www.gov.uk/government/uploads/system/uploa...
I am talking from the point of view of doing company returns, not as a sole trader which may well be different.
Your first line is correct (that's what I was trying to say).
An easy example of my point:
Start of the year you have 10 watches that cost £10 each.
If you sell 10 watches for £20 each at the end of the year you'll have £0 of stock, and profit of £100.
If on the other hand, you sell 10 watches but buy another 10 watches, at the end of the year you'll have £100 of stock, but your profit will still be £100.
An easy example of my point:
Start of the year you have 10 watches that cost £10 each.
If you sell 10 watches for £20 each at the end of the year you'll have £0 of stock, and profit of £100.
If on the other hand, you sell 10 watches but buy another 10 watches, at the end of the year you'll have £100 of stock, but your profit will still be £100.
V8OW said:
Your first line is correct (that's what I was trying to say).
An easy example of my point:
Start of the year you have 10 watches that cost £10 each.
If you sell 10 watches for £20 each at the end of the year you'll have £0 of stock, and profit of £100.
If on the other hand, you sell 10 watches but buy another 10 watches, at the end of the year you'll have £100 of stock, but your profit will still be £100.
I think we are actually saying the same thing. An easy example of my point:
Start of the year you have 10 watches that cost £10 each.
If you sell 10 watches for £20 each at the end of the year you'll have £0 of stock, and profit of £100.
If on the other hand, you sell 10 watches but buy another 10 watches, at the end of the year you'll have £100 of stock, but your profit will still be £100.
It was people saying 'they are buying stock to keep profits down' that made no sense to me, if they buy more stock they have invoices for that same stock which cancels it out, it can't keep profits down (unless they write down old stock of course).
Thankyou4calling said:
I wonder how much an authorised retailer makes in pure "Buy in price v retail price" on a high end watch? In fact I'll start a thread.
gizlaroc said:
Just been told the average mark up on new Rolex is 42%, some of the more expensive ones achieve more than this, but in general, things like Sub Date, GMT Master II will be 42%.
This is selling a watch with warranty from the supplier, so pretty obvious you are not going to get much more than that selling a used one to a dealer with a bricks and motar store.
With used prices being so close to new on many it would make sense to sell new surely? This is selling a watch with warranty from the supplier, so pretty obvious you are not going to get much more than that selling a used one to a dealer with a bricks and motar store.
Unless they simply can't get the allocation of watches to do enough turnover?
When i dealt with them on my Omege Proplof they put it up for about 30% more than we settled on.
They had 2 watches i wanted so i was happy to do the swap. For all i know the watch might still be in stock as they are a little more 'specialist' as a time piece.
Am i bothered about the 30%? Not really. I spoke to plenty of others who would not even offer me on the watch as they said it would be too hard to get rid of.
They had 2 watches i wanted so i was happy to do the swap. For all i know the watch might still be in stock as they are a little more 'specialist' as a time piece.
Am i bothered about the 30%? Not really. I spoke to plenty of others who would not even offer me on the watch as they said it would be too hard to get rid of.
I dont think i would sell to them given the prices offered but i have no problen buying from them.
Have never paid their full asking price, even managed to get £250 off of a watch priced at £1000 once but this was hours to go before christmas break so not sure if this had an effect, and have bought quite few watches from them which they could see. They only had one of the watches and hadnt had it up for sale for long.
Have never paid their full asking price, even managed to get £250 off of a watch priced at £1000 once but this was hours to go before christmas break so not sure if this had an effect, and have bought quite few watches from them which they could see. They only had one of the watches and hadnt had it up for sale for long.
Another point that should be made is the Advertised selling prices INCLUDE VAT @ 20% thus this should be removed to give a fairer indication on their retail prices against the offered trade in prices.
I sold them my PAM168 they gave me £5K had is fully serviced and re finished and advertised it for £7800 including vat so ££6500 less what they paid leaves £1500 less a full Panerai service ...... and it was instock for a long time.
I sold them my PAM168 they gave me £5K had is fully serviced and re finished and advertised it for £7800 including vat so ££6500 less what they paid leaves £1500 less a full Panerai service ...... and it was instock for a long time.
nutter965 said:
Another point that should be made is the Advertised selling prices INCLUDE VAT @ 20% thus this should be removed to give a fairer indication on their retail prices against the offered trade in prices.
I sold them my PAM168 they gave me £5K had is fully serviced and re finished and advertised it for £7800 including vat so ££6500 less what they paid leaves £1500 less a full Panerai service ...... and it was instock for a long time.
That's not right Neale. Pre-owned watches are bought and sold on the Margin scheme, which means that vat is payable on the profit margin on the deal. If you sold the watch at £5000 and it was sold at £7800, the vat is payable on the £2800. The vat element is £466.67, net profit being £2333.33. I sold them my PAM168 they gave me £5K had is fully serviced and re finished and advertised it for £7800 including vat so ££6500 less what they paid leaves £1500 less a full Panerai service ...... and it was instock for a long time.
Dominic H said:
nutter965 said:
Another point that should be made is the Advertised selling prices INCLUDE VAT @ 20% thus this should be removed to give a fairer indication on their retail prices against the offered trade in prices.
I sold them my PAM168 they gave me £5K had is fully serviced and re finished and advertised it for £7800 including vat so ££6500 less what they paid leaves £1500 less a full Panerai service ...... and it was instock for a long time.
That's not right Neale. Pre-owned watches are bought and sold on the Margin scheme, which means that vat is payable on the profit margin on the deal. If you sold the watch at £5000 and it was sold at £7800, the vat is payable on the £2800. The vat element is £466.67, net profit being £2333.33. I sold them my PAM168 they gave me £5K had is fully serviced and re finished and advertised it for £7800 including vat so ££6500 less what they paid leaves £1500 less a full Panerai service ...... and it was instock for a long time.
So, if the watch above is advertised for £7800 I'd be surprised if it went for anything better than £7200. Take off £300 admin for service / refurb (actual job, postage to and from, insurance etc) and you get £6900. Deduct your £5000 and that's £1900 on your £7800 ask. Take vat off the £1900 and all the rest of the outgoings and you can see that the margin is not exactly daylight robbery.
Customers today are far harder work to make a living from than customers of the past. Nobody wants to pay rrp, or anywhere near it. Then, when they want to sell you something they want 100% of the scrap or p/x value. And people ask why small businesses are struggling!
As much as this forum has been great for me I get sick of people emailing me with the question: "can you do better than bluenile / 77 prices?". Dom, Nemesis, myself and others here, we run businesses. The forum is great and we can generally do better than the average Joe on price and quality. Don't be offended if we don't do something for nothing however!
[quote=ecain63]
And, if the watch has cost £300 to service and refurb in the meantime then you've lost another lump of your margin. That's assuming the watch sold at full ask, which going by the crying in here isn't likely in todays internet age.
So, if the watch above is advertised for £7800 I'd be surprised if it went for anything better than £7200. Take off £300 admin for service / refurb (actual job, postage to and from, insurance etc) and you get £6900. Deduct your £5000 and that's £1900 on your £7800 ask. Take vat off the £1900 and all the rest of the outgoings and you can see that the margin is not exactly daylight robbery.
Customers today are far harder work to make a living from than customers of the past. Nobody wants to pay rrp, or anywhere near it. Then, when they want to sell you something they want 100% of the scrap or p/x value. And people ask why small businesses are struggling!
As much as this forum has been great for me I get sick of people emailing me with the question: "can you do better than bluenile / 77 prices?". Dom, Nemesis, myself and others here, we run businesses. The forum is great and we can generally do better than the average Joe on price and quality. Don't be offended if we don't do something for nothing however!
[/quote
I get the impression from some of the posts I've read on PH over the years that if you sold something for £1000 there would be a few on here thinking you've made a £1000 profit added to which the confusion between mark up and profit margin .
I cannot understand why folk get upset about what they consider a low ball offer , learn to negotiate a bit better rather than running to post on the internet about that horrible business man trying to make a living.
And, if the watch has cost £300 to service and refurb in the meantime then you've lost another lump of your margin. That's assuming the watch sold at full ask, which going by the crying in here isn't likely in todays internet age.
So, if the watch above is advertised for £7800 I'd be surprised if it went for anything better than £7200. Take off £300 admin for service / refurb (actual job, postage to and from, insurance etc) and you get £6900. Deduct your £5000 and that's £1900 on your £7800 ask. Take vat off the £1900 and all the rest of the outgoings and you can see that the margin is not exactly daylight robbery.
Customers today are far harder work to make a living from than customers of the past. Nobody wants to pay rrp, or anywhere near it. Then, when they want to sell you something they want 100% of the scrap or p/x value. And people ask why small businesses are struggling!
As much as this forum has been great for me I get sick of people emailing me with the question: "can you do better than bluenile / 77 prices?". Dom, Nemesis, myself and others here, we run businesses. The forum is great and we can generally do better than the average Joe on price and quality. Don't be offended if we don't do something for nothing however!
[/quote
I get the impression from some of the posts I've read on PH over the years that if you sold something for £1000 there would be a few on here thinking you've made a £1000 profit added to which the confusion between mark up and profit margin .
I cannot understand why folk get upset about what they consider a low ball offer , learn to negotiate a bit better rather than running to post on the internet about that horrible business man trying to make a living.
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