Watchfinder - ridiculously low PX value
Discussion
t the Harvey Nichols "stand" is!Porsche911R said:
yer right
"The Kent store helped the company – which sells brands like Rolex, Omega, Tag, Cartier, Patek Phillippe and Breitling – attract sales of more than £4.3 million in its first month.
The business was able to increase its stockholding from 1,900 to 3,000 watches after it attracted a $10 million (£6.18m) investment from private equity firms Piton Capital and Beringea in September.
With over £140milion worth of pre-owned watches sold to date, Watchfinder continues to plan for aggressive growth with further UK boutiques set to open new territories.
The company, which has a showroom at Invicta House, Maidstone, has sold more than £140 million of pre-owned watches so far and aims for turnover to reach £103 million by 2018.
"
None of that mentions margin, though. Sales figures are meaningless - you could infer higher sales actually correlate to a lower margin, for example."The Kent store helped the company – which sells brands like Rolex, Omega, Tag, Cartier, Patek Phillippe and Breitling – attract sales of more than £4.3 million in its first month.
The business was able to increase its stockholding from 1,900 to 3,000 watches after it attracted a $10 million (£6.18m) investment from private equity firms Piton Capital and Beringea in September.
With over £140milion worth of pre-owned watches sold to date, Watchfinder continues to plan for aggressive growth with further UK boutiques set to open new territories.
The company, which has a showroom at Invicta House, Maidstone, has sold more than £140 million of pre-owned watches so far and aims for turnover to reach £103 million by 2018.
"
MrJuice said:
How does buying more stock reduce tax liability? Genuine question..
because a business only pays 20% corporation tax on 'profit'.yes they pay other taxes (employers national insurance, VAT, rates on propert etc....) but if the re-invest the cash they generate into more stock, then they reduce the profit of the business meaning less to pay to the government.
ever wonder why businesses suddenly buy new company vehicles and plant not long before the end of the financial year..........
malks222 said:
MrJuice said:
How does buying more stock reduce tax liability? Genuine question..
because a business only pays 20% corporation tax on 'profit'.yes they pay other taxes (employers national insurance, VAT, rates on propert etc....) but if the re-invest the cash they generate into more stock, then they reduce the profit of the business meaning less to pay to the government.
ever wonder why businesses suddenly buy new company vehicles and plant not long before the end of the financial year..........
malks222 said:
because a business only pays 20% corporation tax on 'profit'.
yes they pay other taxes (employers national insurance, VAT, rates on propert etc....) but if the re-invest the cash they generate into more stock, then they reduce the profit of the business meaning less to pay to the government.
ever wonder why businesses suddenly buy new company vehicles and plant not long before the end of the financial year..........
Buying more stock doesn't affect profit, until you sell ityes they pay other taxes (employers national insurance, VAT, rates on propert etc....) but if the re-invest the cash they generate into more stock, then they reduce the profit of the business meaning less to pay to the government.
ever wonder why businesses suddenly buy new company vehicles and plant not long before the end of the financial year..........
If you have 10k stock at year end or 10m, the tax paid For that year is the same
Of course stock effects your profit!!
Your stock is valued at cost, many a company that is highly profitable on paper has gone bust because they have no cash flow, it is all tied up in stock.
50% gross margin in retail is where you need to be in retail unless you are flipping product incredibly quickly, and this is pretty much what they seem to offer when buying in new stock.
If you want to get more simply sell it yourself. Plus, if you want to save money, buy the new watch you want from a private seller. The issue here is you have a watch they don't really want, and the bid shows that. Where as Coldsnap had a watch they did want and they offered accordingly.
I can guarantee those that are shouting about them don't run business' themselves, you can just see them opening their wage slip at the end of each month.
Your stock is valued at cost, many a company that is highly profitable on paper has gone bust because they have no cash flow, it is all tied up in stock.
50% gross margin in retail is where you need to be in retail unless you are flipping product incredibly quickly, and this is pretty much what they seem to offer when buying in new stock.
If you want to get more simply sell it yourself. Plus, if you want to save money, buy the new watch you want from a private seller. The issue here is you have a watch they don't really want, and the bid shows that. Where as Coldsnap had a watch they did want and they offered accordingly.
I can guarantee those that are shouting about them don't run business' themselves, you can just see them opening their wage slip at the end of each month.
gizlaroc said:
Of course stock effects your profit!!
Your stock is valued at cost, many a company that is highly profitable on paper has gone bust because they have no cash flow, it is all tied up in stock.
50% gross margin in retail is where you need to be in retail unless you are flipping product incredibly quickly, and this is pretty much what they seem to offer when buying in new stock.
If you want to get more simply sell it yourself. Plus, if you want to save money, buy the new watch you want from a private seller. The issue here is you have a watch they don't really want, and the bid shows that. Where as Coldsnap had a watch they did want and they offered accordingly.
I can guarantee those that are shouting about them don't run business' themselves, you can just see them opening their wage slip at the end of each month.
Might affect your cash, but won't affect your profit (until you sell the stock). Your stock is valued at cost, many a company that is highly profitable on paper has gone bust because they have no cash flow, it is all tied up in stock.
50% gross margin in retail is where you need to be in retail unless you are flipping product incredibly quickly, and this is pretty much what they seem to offer when buying in new stock.
If you want to get more simply sell it yourself. Plus, if you want to save money, buy the new watch you want from a private seller. The issue here is you have a watch they don't really want, and the bid shows that. Where as Coldsnap had a watch they did want and they offered accordingly.
I can guarantee those that are shouting about them don't run business' themselves, you can just see them opening their wage slip at the end of each month.
Agree with the rest though, and as has been demonstrated in earlier posts (even though it was a couple of months back) they clearly aren't making bumper margins.
Stock of course has an impact on profit but you cannot simply invest in a ton of stock to increase your expenses and reduce your tax liability as only the cost of the stock that has actually been sold is deducted from turnover as a 'cost of sale'.
Back to the subject, I have heard about very low PX values but as others have said they are a business and it is basic business to pay as little as possible for stock. Their selling prices are slightly higher too than you may be able to find on chrono24 and other online sellers, but the reasons why are quite clear. It's also worth the little extra to have the piece of mind of walking into the shop and seeing the item in the flesh before you buy, as I have done at the Leeds store.
Back to the subject, I have heard about very low PX values but as others have said they are a business and it is basic business to pay as little as possible for stock. Their selling prices are slightly higher too than you may be able to find on chrono24 and other online sellers, but the reasons why are quite clear. It's also worth the little extra to have the piece of mind of walking into the shop and seeing the item in the flesh before you buy, as I have done at the Leeds store.
don logan said:
I have a watch that they also have in stock
They are identical in year and condition (mine COULD be better as it's been worn carefully about 4 times)
They are advertising theirs at £4,750
They offered £2,600 for mine
I will now undercut them by selling mine via a commission sale!
46% margin, which is about right I would guess. They are identical in year and condition (mine COULD be better as it's been worn carefully about 4 times)
They are advertising theirs at £4,750
They offered £2,600 for mine
I will now undercut them by selling mine via a commission sale!
You have to think what the margin is on a new watch, why would they want to earn less margin on a used watch?
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.
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.
gizlaroc said:
Buy £100k of stock.
Do £150k of turnover.
Deduct £50k of overheads.
What profit have you made?
Obviously you have to stock take when you do your end of year accounts, so if you have £25k of stock at cost, how much profit have you made?
Assuming you're starting from nothing: Do £150k of turnover.
Deduct £50k of overheads.
What profit have you made?
Obviously you have to stock take when you do your end of year accounts, so if you have £25k of stock at cost, how much profit have you made?
£150k sales
£(75k) cost of sales
£(50k) overheads
£25k net profit
Assets:
£25k stock
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