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Old October 2nd, 2007, 14:17   #49
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Join Date: Jun 2002
Location: Toronto
Originally Posted by Farmboy View Post
Most business people base their knowledge off of experience in business and training. Not watching. Same goes for anything, your not special forces because you watched "Tears of the Sun".
LOL! Quoted for truth.

onem, Farmboy and Arnisador is spot-on... just because you drop prices by acquiring greater volume, it doesn't mean you'll instantly sell tons more. You'll actually make an exponentially lesser amount. Profit margins on an actual consumer good can't be calculated in a linear fashion.

Case-in-point: This past september, I offered a 20% discount on ALL stuff I had in stock. That left me making either -5% loss or at most a 5% margin on the ORIGINAL cost of the items. That net loss/gain does not take in to account the time I've had to sit on the equity as well as the maintenance fees I've had to pay for the storage space those goods take up. That was fine with me, as all I wanted to do was just liquidate some of my capital - or at least use the month as an experiment to see what the outcome would be.

So what was the outcome? How did the sales volume compare to previous months? It didn't change. I didn't sell more. I sold the same volume. And ultimately, I lost money, rather than made money.

You can't claim to or speak like you know how the business works when you're not in it. You can't just drop prices and expect things to work just fine.

Another big reason why retail products don't have consistently fluctuating prices to follow dollar values is that although it's nice to enjoy the profits now, you must also realize that businesses must pocket that money to hold them through the tougher times.
We're not selling oil here - the price doesn't fluctuate daily as the cost of oil per barrel rises and falls. When the Canadian dollar was at $1.55 per American dollar, do you know how much guns costed back then? Approximately the same as what they cost now, and in many cases, the guns costed WAY more than what they costed now (anybody remember $700 MP5s?) This was also back when airsoft was completely legal to import. Yes, we had a period with much cheaper guns - but this was when there was big supply to fill the demand. Now we're in what could be considered a drought and supply is far from demand, and hence, the supply and demand model dictates that prices must rise.

Anyways, back to my original point in my first post: there are MANY factors involved in running an airsoft retail business that goes beyond what the current dollar value is and "bulk orders".

fyi: retailers typically get no more than an additional 5% on "uber-bulk" orders on top of their wholesale prices. 5% on a $250 (wholesale cost) product is less than $13. For the 3 -12 months that I'd potentially have to sit on that item to sell, I could've made an 18% (or more) profit by investing that capital with a qualified investment broker in some funds or stock market. THAT is what I meant by loss of potential profit. Even worse, is if you don't have the huge amount of capital to invest on a huge order - if you were lucky enough to have access to a BIG line of unsecured credit, you're still paying around 8.25% on rotating daily interest on that loan - JUST so you can make that huge bulk order to save that 5%. Even if you got that line of credit secured, you're paying what... 5.25% or whatever prime is right now? And guess what you're securing it against? YOUR HOUSE.

Something with that math just seems totally flawed to me, but you seem to have it figured out because you've seen how we do it.

Originally Posted by onem View Post
You can get your guns cheap from america, shipping is cheap in bulk. You will have to try and get the putty guns that shouldent be to hard. And the hole tax and duties, well when have you ever had to pay $100 dollers in duties for a few cartines of smokes? Comon my mom goes to florida all the time and duties arent that mutch. Taxes should be the same, I know added together ther allot more then on there own. But like I said when Have you ever had to pay $100 dollers in Duties on a few cartines of smokes?
Apparently, in Ontario, all it takes is less than 3 cartons (on top of your 1 carton exclusion) to pay over $100 in federal and provincial taxes and duties:

That's... assuming you're declaring the cigarettes like you should be.

Last edited by ILLusion; October 2nd, 2007 at 14:42..
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