Margins on iPhones for retailers; zero or negative revenue?!


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kiddingguy

Not to have a full breakdown of profits, but I was at a local MediaMarkt and they claim that they make no margins/profits on iPhones at all (even a negative revenue).

Also, they state, that on all mobile devices - such as Samsung, Huawei etc - less to none profit is made.

 

I think this is very strange. Especially, since the store space this take (almost one whole floor) is very large. So why - only besides possible returning customers, or revenue from them on other products - would a store even think of selling this kind of devices.

 

Or.... is this MediaMarkt employee just a good liar, to keep his own business 'safe from harm'?

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forster

I seem to think that if that was so, they wouldnt sell them. I can only presume they make the margin on the accessories, or other pickups that customers buy when they are in the store.

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Steven P.
12 minutes ago, kiddingguy said:

Or.... is this MediaMarkt employee just a good liar, to keep his own business 'safe from harm'?

He is a leugenaar (liar) ;) 

 

It is well known that in many places around the world including Nederland, phone shops would advise against Windows Phone because they made more money off selling iOS and Android phones. A phone shop employee told me this when I was thinking about getting the Nokia Lumia 900 (thankfully I did not buy it in the end because it lost support in the first year!)

 

What is true is that shops like MediaMarkt are losing out to online retailers, it probably costs a lot of money to run a brick and mortar store and the online business probably helps pay for it.

 

So for everything less mark up in a real life store, not just phones 😮 

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+Dick Montage
37 minutes ago, kiddingguy said:

they claim that they make no margins/profits on iPhones at all

And why would they tell you this?  What was their motivation?

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shockz

Back in 2008, when I worked at Best Buy, our employee discount was pretty good, basically cost + 5%. Wish it was still like that, would consider getting a part time gig again with them. We got a few bucks knocked off on iPhones, but it was marginal. A few bucks as in less than $10. There aren't really big profits in selling the phones themselves, which is why retailers love to add-on high margin items like cases, cords, chargers, service plans, etc...  

 

They have no problem making low margin on iPhones, because consumers typically by accessories at the same time of purchase. At least ones that go to a store to buy them.

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kiddingguy
2 hours ago, Code Name: Lockdown said:

And why would they tell you this?  What was their motivation?

At another (online) webstore there is now a "15% off back to work" promotion.

And I bought a little while an iPhone SE 2020 at MediaMarkt. So I thought.... if I can make use of there return period and can claim this 15% difference (instead of buying an iPhone somewhere else and practically return this phone sealed & unused, get the 100% of this iPhone at MediaMarkt back, and pay that other store the '85%').

 

Or, as it turns out, I have to return the already opened package and used iPhone SE - something to do with serial numbers. Plus, they can deduct some of the original price if there are scratches on "their" iPhone, which for like 99% they will find something. In this case MediaMarkt would make more loss that this 15% difference. However, MediaMarkt is taking this loss as it comes from another "department" with some monety left of second hand selling or something alike. They don't match on price anymore....

 

So, this MediaMarkt employee told me with this information in mind, that they don't make any money from iPhone and other cellphones. Sureeeeeee....

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+warwagon

Walmart won't sell you a iPhone SE 2020 outright in store without you also purchasing a service plan.

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Steven P.
1 hour ago, warwagon said:

Walmart won't sell you a iPhone SE 2020 outright in store without you also purchasing a service plan.

tenor.gif

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+Dick Montage
11 hours ago, kiddingguy said:

At another (online) webstore there is now a "15% off back to work" promotion.

And I bought a little while an iPhone SE 2020 at MediaMarkt. So I thought.... if I can make use of there return period and can claim this 15% difference (instead of buying an iPhone somewhere else and practically return this phone sealed & unused, get the 100% of this iPhone at MediaMarkt back, and pay that other store the '85%').

 

Or, as it turns out, I have to return the already opened package and used iPhone SE - something to do with serial numbers. Plus, they can deduct some of the original price if there are scratches on "their" iPhone, which for like 99% they will find something. In this case MediaMarkt would make more loss that this 15% difference. However, MediaMarkt is taking this loss as it comes from another "department" with some monety left of second hand selling or something alike. They don't match on price anymore....

 

So, this MediaMarkt employee told me with this information in mind, that they don't make any money from iPhone and other cellphones. Sureeeeeee....

Think about what he stands to GAIN by telling you.

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-T-

I used to work for a very large telco in Australia and can confirm that iPhones had a few dollars profit in total and we made money on accessories for them. At the time the Galaxy models made a few hundred dollars profit per device so we’d always try sell towards android over iOS

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