Sports Retail Question

The_Banker

Howdy all…
Not sure if this is the appropriate forum to ask this question but if someone can give me some info I would be grateful….

I am doing a business plan and I am trying to do a break down on the price of a standard sports jersey…

A new jersey would retail at €60 so I am trying to get the breakdown in percentage of where that €60 would go after a sale..

I presume with VAT at 23% €13.80 would go to the government…
What portion goes to the sports manufacturer and what portion goes to the retailer?

Obviously the retailer has his overheads which comes out of his margin but is there anyone other factor I am leaving out when breaking down the cost?

Any info appreciated…
Thanks

Peterdalkey

Typical "take" chain would be

Manufacturer
label Owner margin ( if not manufacturer)
Royalties (eg Man United/ Brand owner etc)
Wholesaler/distribution
Retailer (50% of retail price inc VAT is typical)

46.20 - 50% retailer 23.10 , 30% distributor - 6.93 leaving 16.17.

Royalties 7-10%, leaving manufacturer with a Gigantic margin. Probably able to make them for around $1!

DubTony

Your VAT is wrong. You've calculated 23% of €60. The full retail price is €XXX +23% to bring it to €60.

Divide €60 by 1.23 to find the actual pre-vat selling price. In this case it's €48.78

The_Banker

Thanks for the feedback people....

I guess from what people are saying is that the retailer gets 50% after VAT is taken out and that would amount to €24.39??

DubTony

DubTony wrote: »

Your VAT is wrong. You've calculated 23% of €60. The full retail price is €XXX +23% to bring it to €60.

Divide €60 by 1.23 to find the actual pre-vat selling price. In this case it's €48.78

I defer to the retail king

jimmii

The_Banker wrote: »

Thanks for the feedback people....

I guess from what people are saying is that the retailer gets 50% after VAT is taken out and that would amount to €24.39??

It would vary by manufacturer and probably even club and how long it is since the jersey came out a brand new Man Utd jersey is likely to be a lot lower margin than a year old Everton one. I'm not sports retail but my margins range from 20%-70% I would imagine that is the same for most retailers.

Also as others have pointed out VAT is 18.7% of the selling price

Joe10000

jimmii wrote: »

It would vary by manufacturer and probably even club and how long it is since the jersey came out a brand new Man Utd jersey is likely to be a lot lower margin than a year old Everton one. I'm not sports retail but my margins range from 20%-70% I would imagine that is the same for most retailers.

Also as others have pointed out VAT is 18.7% of the selling price

Do you mind me asking what type of item can return you 70% after vat ?

jimmii

Joe10000 wrote: »

Do you mind me asking what type of item can return you 70% after vat ?

If you are a wholesaler who also sells then you are looking at that sort of margin on your own products and also classes are that sort of margin.