[scooba0010]

I have seen a watch its £18560 uk list including VAT.

The dealer has 38% mark up ,VAT is added to the price when sold ,

so what is the dealer paying the manufacturer ??

I am thinking £15780 plus VAT ?

Basically i think the watch is costing the dealer £9800 plus 38% plus vat .


I like the idea of having a deal but do you think £12500 is taking the piss.

if i ask for 30% off is it £12992 ??

I know 100% the mark up and VAT are correct,Its a Old friend who is the MD and i belive the item has been in stock a while and i also know it is getting to his year end and was thinking he may just want it off his stock book.I also realise that VAT will increase in the new year and that there is every chane of a price increase in the first quarter of the new year.

Thank in advance

[NFS]

Originally Posted by scooba0010

I have seen a watch its £18560 uk list including VAT.

The dealer has 38% mark up ,VAT is added to the price when sold ,

so what is the dealer paying the manufacturer ??

I am thinking £15780 plus VAT ?

Basically i think the watch is costing the dealer £9800 plus 38% plus vat .


I like the idea of having a deal but do you think £12500 is taking the piss.

if i ask for 30% off is it £12992 ??

I know 100% the mark up and VAT are correct,Its a Old friend who is the MD and i belive the item has been in stock a while and i also know it is getting to his year end and was thinking he may just want it off his stock book.I also realise that VAT will increase in the new year and that there is every chane of a price increase in the first quarter of the new year.

Thank in advance

15% VAT rate is only for goods with an invoice date prior to 2nd Jan 10.

At the moment, the rate should still be 15% so the VAT free amount is £18,560/1.15 = £16,139

His mark up would be ex VAT, so the trade cost would be £ 16,139/1.38 = £ 11,695

If you offered £12,500 Inc VAT you would be asking him to sell at a loss.

[Dr Dave]

Thought the VAT went up on 01/01/10????

[NFS]

Originally Posted by Dr Dave

Thought the VAT went up on 01/01/10????

You are right .. it's 'on or after' 1st Jan 09. I thought it was 'after'.

[Turbo Power]

Apologies for being nosey but which watch are you talking about.

[Dr Dave]

Originally Posted by amar7274

Apologies for being nosey but which watch are you talking about.

A bloody expensive one!!!!!

[jwbmw]

Key to the answer is knowing how the dealer marks up the price

Is his mark up 38% as a proportion of the pre-VAT sale price, that is 38% = mark-up and 62% = actual cost in which case the price he pays is 0.62 times the pre-vat price so the sum is sale price divided by 1.15 then times by 0.62 =£10006

or

he may mark up the actual cost by 38% by adding the 38% (or multiplying by 1.38). This would then by comparison to the example above mean that 27.5% of the total cost is mark up and 72.5% is actual cost (38/138 = 0.275). so the sum is sale price divided by 1.15 then times by 0.724 or (100/138) = £11695


I use the first method at work but customers often calculate using the second way so incorrectly assume my mark up is proportionately less

[NFS]

Originally Posted by jwbmw

Key to the answer is knowing how the dealer marks up the price

Is his mark up 38% as a proportion of the pre-VAT sale price, that is 38% = mark-up and 62% = actual cost in which case the price he pays is 0.62 times the pre-vat price so the sum is sale price divided by 1.15 then times by 0.62 =£10006

or

he may mark up the actual cost by 38% by adding the 38% (or multiplying by 1.38). This would then by comparison to the example above mean that 27.5% of the total cost is mark up and 72.5% is actual cost (38/138 = 0.275). so the sum is sale price divided by 1.15 then times by 0.724 or (100/138) = £11700


I use the first method at work but customers often calculate using the second way so incorrectly assume my mark up is proportionately less

The question is, should the 'mark up' be calculated as 38% of the sale price or 38% of the cost price?

I would always argue that it should be 38% of the cost price.

You are marking UP the cost price by the commission.

In your first example the mark up is actually 61%

That's how you would express it in terms of a profit margin and it's also how the VAT works.

[jwbmw]

Originally Posted by NFS

The question is, should the 'mark up' be calculated as 38% of the sale price or 38% of the cost price?

I would always argue that it should be 38% of the cost price.

You are marking UP the cost price by the commission.

In your first example the mark up is actually 61%

That's how you would express it in terms of a profit margin and it's also how the VAT works.

Yep but it is all in the terminology and the point we are both making is that there is more than one way of calculating the sum but it is interesting that the 61% almost equates to a round £10k!

[SoYank]

Originally Posted by scooba0010

I have seen a watch its £18560 uk list including VAT.

Find retail cost before VAT: £18,560*(1.00/1.15)=£16,138

Originally Posted by scooba0010

The dealer has 38% mark up ,VAT is added to the price when sold ,

so what is the dealer paying the manufacturer ??

Find dealer cost before markup: £16,138*(1.00/1.38)=£11,694.

Originally Posted by scooba0010

I am thinking £15780 plus VAT ?

Basically i think the watch is costing the dealer £9800 plus 38% plus vat .


I like the idea of having a deal but do you think £12500 is taking the piss.

if i ask for 30% off is it £12992 ??

[NFS]

Originally Posted by SoYank

Find retail cost before VAT: £18,560*(1.00/1.15)=£16,138

You are £1 out on your VAT calculation. They could jail you for that

[RagingKileak]

You guys sure your not mixing up margin and mark up which are definately different!!

Matt

[SoYank]

Probably would, too.

[Carrera RSR]

Originally Posted by RagingKileak

You guys sure your not mixing up margin and mark up which are definately different!!

Matt

No they're not. Calculations are right for NFS and SoYank. Scooba's calculations are wrong. If Scooba is offering £12500 he is asking the dealer to sell at a loss.

Cost to dealer £11,694 + VAT = £13,448

[RagingKileak]

Originally Posted by carrerarsr

No they're not. Calculations are right for NFS and SoYank. Scooba's calculations are wrong. If Scooba is offering £12500 he is asking the dealer to sell at a loss.

Cost to dealer £11,694 + VAT = £13,448

I didn't mean anyone specific... And markup and margin are still different lol!

As for the deal, is it a watch ANYONE will ever wanna own? If so, the dealer is gonna tell you to jump lol - although I admit, I know fuck all about watches!

Edit - Floyds post says mark up, but the sum used is the sum to achieve margin...

Matt

[NFS]

Originally Posted by RagingKileak

You guys sure your not mixing up margin and mark up which are definately different!!

Matt

http://www.ecademy.com/node.php?id=95267

For Scooba's watch mark up is 38% calculated as follows:

£16,139 - (£16,139/1.38) = £4,444.07

But .. profit margin would be £4,444.07/£16,139 = 27.5%

Profit margin is profit as a percentage of the sale price, mark up is profit as a percentage of the cost price.

[scooba0010]

Originally Posted by amar7274

Apologies for being nosey but which watch are you talking about.

18K WHITE GOLD ROLEX SUBMARINER List price is £18560 .


I use a rolex forum and a member who sells from the USA is able to deliver me one for £12500 ,I just wanted to see how close my local UK dealer could get ,I am aware the guy from USA wont declare it at point of entry so saving VAT ,

My local dealers watch manager offered me it for £14850 ,But when the owner arrived he said if i was serious we could negotiate,TBH i am pretty keen and said id go away and consider where i wanted to be with,

Bought in haste repent at leisure ! ,its sort of decision time I think i will go and make my offer and see where we are at the weekend

[scooba0010]

Please dont get heated its only advice .and all advice is welcome .I know factually there is 38% in the watch for the dealer ,what i dont know is if thats after or before vat is added.



What i do know is whenever i have been given a discount before its on the sale price ie £3000 rrp and with a 15% discount £450 i pay £2550


The watch in question is £18560 minus 20% and he said to you £14850


Now as i mentioned a guy can bring me one from the usa and deliver in person £12500 ,The guy from usa is 100% good to his word ,question is do i try and source from my local dealer and get him to match the price or jus buy from my international source,I actually dont want to pay Gordon any more money he has $ucked the economy my savings are screwed no interest .opinions please

[Irnbrukid]

I'd expect it to be on the cost before VAT is added.

[Steve A]

Im sorry to correct you all because to calculate the VAT form 18500 the sum is

£18500 x 3 / 23 = £2413.04

so the NET cost = £18500 - £2413.04 = £16,086.86

His 38% margin = 16086.86/100 * 38 = £6113 .01

so the dealer is actually paying 16086.86 - 6113.01 = £9.973.85 ecxlusive of vat

therefore if you ad 15% to this price 9.973.85 +15% =11469.92

so if scoobsa offered 12500 the dealer would make 12500-11469.92 -15%

VAT content = 1030.08 x3 /23 =134.36

NET profit = 1030.08 -134.36 =£895.72

[dxb335d]

Dumbo's. Go back to Uni... VAT is for mugs.

[scooba0010]

Originally Posted by Steve A

Im sorry to correct you all because to calculate the VAT form 18500 the sum is

£18500 x 3 / 23 = £2413.04

so the NET cost = £18500 - £2413.04 = £16,086.86

His 38% margin = 16086.86/100 * 38 = £6113 .01

so the dealer is actually paying 16086.86 - 6113.01 = £9.973.85 ecxlusive of vat

therefore if you ad 15% to this price 9.973.85 +15% =11469.92

so if scoobsa offered 12500 the dealer would make 12500-11469.92 -15%

VAT content = 1030.08 x3 /23 =134.36

NET profit = 1030.08 -134.36 =£895.72

Hi i would like to think this is the correct way (wishfull thinking) as i do want the watch but have decided £12500 is my limit